Interestingly, Khan Market, despite registering no change in rental values, moved up by four positions in the global rankings on account of some key global markets facing devaluation in their rentals.
Tasmayee Laha Roy
With some popular eateries partially sealed, is Khan Market losing its sheen? Judging by the drop in footfalls, that does seem to be the case.
Earlier this week, the New Delhi Municipal Corporation (NDMC) partially sealed shops in Khan Market for allegedly flouting municipal rules. "The NDMC orders have adversely effected our reputation,” Sanjeev Mehra, president, Khan Market Association told Moneycontrol.
”From a 30 percent dip in footfall on the first day, the decline has widened to 50 percent now,” he said.
It is not just the footfalls that have decreased. Real estate experts say dwindling reputation may also impact realty prices in Khan Market. A fall in rentals is not being ruled out completely.
Delhi’s Khan Market had emerged as the most expensive retail location in India as per the latest report released by Cushman & Wakefield with a consistent rental rate of Rs 1250 per square feet per month.
Will the scenario change? Maybe.
“There will be no immediate effect in rentals but Khan Market is popular for having premium shopping options alongside being a haven for food lovers. If the option of eateries go down, then the place loses its USP of having the best of both shopping and eating options. If that happens, then there might be alteration in real estate prices. We can expect a drop between 10% and 15% but not immediately,” said Pankaj Renjhen, managing director-retail services, JLL.
Interestingly, Khan Market, despite registering no change in rental values, moved up by four positions in the global rankings as rentals in some key global markets declined.
“Fulfillment of statutory provisions has already been met in most ground floor spaces which are the most expensive units in the market. It is our understanding that government action is mainly on upper floor areas. It will restrict supply for sure but then these were not meeting legal requirements in the first place. Most organized retailers wouldn't have leased spaces without necessary approvals,” said Vivek Dahiya, managing director, North India, Cushman & Wakefield.
Khan Market that stands on 15.5 acres of land presently houses 156 shops and 42 residential flat premises converted into commercial space.While there were issues related to non-payment of conversion charges, the NDMC officials partially sealed lounges and restaurants in the area that were on the first floor and above. According to some NDMC officials, commercial activity isn’t allowed on terrace and action was taken against those violating the norms. The names in the list included the likes of Chatter House, Civil House, Mamagoto and others. These shops are all located on the first floor and above.