All about Apple stores in India, lease agreements, rentals and more

Also Watch: Apple’s Delhi Store Tour | What’s So Different In It Than The Apple BKC Store?

The rent

Apple will pay a rent of around Rs 40 lakh a month for its retail store in New Delhi, lease agreement documents reviewed by Moneycontrol showed. The location in a bustling mall also makes the Delhi store shorn of exclusivity.

The company is paying roughly Rs 42 lakh for 20,000 sq ft in Mumbai. In other words, the retail space in Delhi is more expensive than in India’s financial capital, according to this deal.

Also Watch: Why did Apple choose Select City Walk and not any other luxury mall to launch it's store?

When was the lease deed signed?

The lease deed for the Delhi store was signed on July 18, 2022, between Select Infra and Apple India for 10 years. Apple has the option to renew the lease for another five years but will have to give a notice of at least six months, documents shared by CRE Matrix showed.

Apple’s rent will be increased by 15 percent every three years.

Apple paid a security deposit of Rs 1.19 crore — equivalent to three months’ rent — showed the documents. Apple also has to pay monthly common area maintenance charges and mall management charges of Rs 85 per sq ft per month, including taxes.

“It has taken almost two years from the start of the discussions to open the store in Delhi. Select Citywalk in Delhi is an established mall that has been operational for more than 15 years. It is also the first port of call for most international brands,” Yogeshwar Sharma, CEO and Executive Director, Select Citywalk, told Moneycontrol in a video interview, adding it also makes business sense for Apple to launch a store in Delhi.

Also Read: Apple’s first India store 'Apple BKC' will be one of its most sustainable in the world

Detailing and design of stores

“The brand is known for its detailing and design, which is reflected both in the product as well as the store,” he said. “This is a great addition to the mall, and it is expected to significantly increase the number of footfalls, especially in the first six months,” he told Moneycontrol.

Many aspects go into deciding the rentals. This is one of the wealthiest, and, perhaps, the most exclusive catchment in the capital, he said. Rents are also a function of sales, he said.

“Apple has signed a lease with Select Citywalk mall for 8,400 sq ft space at a rent of approximately 475 per sq ft plus CAM (Common Area Maintenance) charges. The rental is about Rs 40 lakh per month. This is a 10-year lease with a five-year lock-in, with 15 percent escalation every three years. The average store size in this mall is about 1,500-2,000 sq ft. The rentals have seen a steady increase in the period, post COVID-19. This is not the largest store,” said Gagan Randev, Executive Director – capital markets, India Sotheby’s International Realty.

The Apple stores have created some euphoria in the market. Apple-owned stores of this format stand out in cities they are present in and become addresses by themselves. New launches of Starbucks and H&M, in the past, have also created a lot of buzz and seen serpentine lines in the initial days.

Also Watch: Watch This Sneak-Peek Into Apple's BKC Mumbai Store Before It Opens To The Public

The Mumbai store

Apple has leased over 20,000 sq ft of retail space over three floors in BKC, at a minimum guaranteed rent of around Rs 42 lakh per month, registration documents accessed by Propstack showed.

The minimum yearly rent is Rs 5.04 crore, to be paid quarterly. This works out to Rs 42 lakh per month. There is an in-built escalation clause of 15 percent every three years. The deal also includes a revenue share component, where Apple has to pay 2 percent of revenues for 36 months, and 2.5 percent thereafter.

The agreement was registered on February 26, 2021. The store is located at the Jio World Drive Mall, which houses mostly luxury brands. It will be known as Apple BKC.

The tenant is Apple India Private Ltd and the landlord is The Indian Film Combine Private Ltd. The company has paid six months’ rent -- Rs 2.52 crore-- as security deposit. This will be increased every three years by 15 percent, the 414-page document showed. The tenure is for 133 months and comes with an option to extend it by another 60 months. Across three levels, the total area rented is 20,806 sq ft (7,014+7,014+6,778 sq ft), the document showed.

The common area, facilities management, and shopping centre maintenance charges work out to be around Rs 110 per sq ft per month, according to the document.

BKC is perhaps the most expensive commercial real-estate in the country, with rents going up to Rs 400-500 per sq ft per month. For instance, Bank of China has leased 9,300 sq ft of office space at a rent of Rs 500 per sq ft per month at Maker Maxity in BKC, for five years.

Also Watch: Apple’s Delhi Store Tour | What’s So Different In It Than The Apple BKC Store?

The design

A release from Apple said that the BKC store has a uniquely designed curved storefront with white oak tables displaying Apple’s products and accessories as well as a feature wall manufactured in India. It said Apple’s operations in India is run on 100 percent renewable energy and are carbon-neutral.

Apple BKC in Mumbai has a triangular handcrafted timber ceiling that extends beyond the glass façade. The timber elements have been assembled in Delhi and the stone walls crafted in Rajasthan. The Saket store in New Delhi, on the other hand, has a large store front and full glass doors.

The Delhi store opens through a uniquely designed curved storefront with white oak tables that display Apple’s products and accessories, as well as a feature wall manufactured in the country. The company has said that the store is designed with materials sourced from the region, including tables and the wood feature wall. It also runs on 100 percent renewable energy and is carbon-neutral.

The company has said that its Delhi store’s design is inspired by the capital’s many gates, each signifying a new chapter to the city's storied past. The Mumbai store is inspired by the artwork inside the iconic 'Kaali Peeli' taxis in the city.

The art element adds to the aura and longevity of the brand. Customer profiles have evolved over the years, especially after the pandemic. Customers today are looking at excitement and experiential stores such as these which offer an exclusive experience that they are looking for. Art is also contributing to the retail experience. Overall, the idea is to connect to India in one way or the other, said retail experts.

Also Watch: Apple Comes To India | Preview Of Official Store In Mumbai

Focus on details sets the stores apart

Retail experts said what is important in case of both the stores is the detailing.

The colour as well as the lighting make all the difference. People privy to the design said that even minute details have been looked into with respect to the display. They’ve even looked at the angle at which the phones should be displayed and the design has ensured that direct sunlight does not fall on the phones.

Even details such as the average hand size of the person who picks up the phone to the glass has been looked at. It has been cut overseas and shipped to the stores, said people privy to the detailing that went into designing the two stores.

Asked if it was probably the comfort factor that Apple had with the Blackstone brand, Sharma told Moneycontrol in a video interview that it wasn’t the case. “Not really. The lease was signed much before REIT came into the picture. These are two separate things.”

Moneycontrol has reached out to Apple for a response, but has not heard from the company. This report will be updated as and when the company responds.

“When brands like Apple come to a mall, there are immense learnings. They include the location of a store, in terms of visibility and access for customers, the circulation within the store and adjacencies of other aspirational brands like Nike Flagship / Pauls Cafe etc,” explains Arjun Sharma, Vice-chairman and Board of Director, Nexus Select REIT.

“The detailed planning of the fitout and its management is mind-blowing. The materials used are sustainable, safe and durable. The stores may look simple but the level of attention to detailing is something we had never experienced in 15 years of seeing hundreds of fitouts,” he told Moneycontrol.