Rentals at some of the top high street retail shopping areas across the country such as Khan Market in Delhi, and Kala Ghoda, Bandra Linking Road, and Fort in Mumbai have taken a hit due to the COVID-19 pandemic, showed recent data by ANAROCK Research.
According to the data, monthly rentals in Khan Market, a prime real estate location in the national capital, have dropped 8-17 percent in the first quarter (Q1) of 2021 as compared to the same period last year.
“The average monthly rentals in the country’s most expensive retail hub Khan Market hovered between Rs 1,000-1,100 per square feet in Q1, 2021,” according to the report.
Similarly, rentals in Mumbai's high-street markets of Kala Ghoda, Bandra Linking Road, and Fort in Mumbai dipped between 5 and 10 percent during the same period, per the report.
Currently, the monthly rentals at Kala Ghoda and Fort area are around Rs 450-500 per sq. ft. each, while at Bandra Linking Road (approximately) Rs 750-900 per sq. ft.
According to Pankaj Renjhen, COO and Joint MD, ANAROCK Retail, the retail sector has been among the worst-hit sectors due to the pandemic.
“With almost zero sales amidst lockdown last year and the pursuing months, we saw retailers closing their stores or even curtailing their future expansion plans. As a result, the average monthly rentals across the major high street retail markets mostly saw corrections across cities,” he said.
However, some market such as Gachibowli, Banjara Hills, Jubilee Hills in Hyderabad witnessed an increase in monthly rentals during the period, he noted.
Among other prime locations in the country, rentals in Brigade Road in Bengaluru dipped 8-17 percent in Q1 2020 versus Q1 2021. The current average monthly rentals at the location range between Rs 250 and 275 per sq. ft. The monthly rentals in Indiranagar, another prime location in Bengaluru, is in the range of Rs 225-250 per sq. ft.
In Kolkata, Gariyhaat Rash Bihari Avenue is the worst affected location with rental rates dropping to Rs 160- 220 per sq. ft. in Q1 2021 from Rs 250-260 per sq. during the same period in 2020.
Last year, after grappling with low sales due to the pandemic, several retailers had sought relief in rentals from their landlords, while others had to vacate space as they were unable to pay high rentals. The second wave has hit right when the segment had started inching towards recovery with footfalls in retail stores recovering to 80-90 percent of the pre-COVID levels in January and February this year.