India ranked 24th in global retail survey
Cushman & Wakefield’s annual global survey, Main Streets Across the World 2009, has ranked India as the 24th most expensive retail high street. Khan Market (New Delhi), the most expensive retail destination in India slipped from 17th position in 2008 to its old ranking of the year 2006. New York’s Fifth Avenue retained its title as the world’s most expensive shopping destination followed by Hong Kong’s Causeway Bay and Avenue des Champs Elysées in Paris. Munich’s Kaufingerstrasse was the biggest riser into the top ten global ranking moving to ninth from 12th with a 7.1% increase in rents.
Globally, the biggest fall in rents was in Mumbai with Colaba Causeway falling 63.5%, Linking Road Bandra by 63% and Kemps Corner by 60%. In the Americas, Rio de Janeiro’s Sao Conrado Fashion Mall fell 53.4% whilst in Europe, Bucharest’s Calea Victoriei fell 48.1%.
Colaba Causeway in Mumbai had witnessed significant increase during the growth period (over 180% in 2007-2008); however retailers were not able to sustain operations in an environment of high rentals and reduced consumer purchases which led to rental negotiations and downward revision of values in the market.
Elaborating further Jaideep Wahi, director (retail),Cushman & Wakefield India said, “The considerably high rentals witnessed in the last few years had made business unviable for many retailers, escalating their cost of operations.
“In such a scenario many retailers scaled down their operations, re-sized their formats or even modified their business model to work out more feasible propositions,” he added. “Today however, availability is generally up across the market and retailers are looking to take advantage of attractive rentals to enhance their presence in key locations”
While rents in prime Indian high streets corrected in the wide range of 17% to 63% over last year which is much higher than the Asia average of 15%, there were some markets like Park Street (- 8.6%) and Camac Street (0%) in Kolkata as well as Brigade Road in Bangalore (0%) that witnessed only marginal decline.
In comparison, the change in rentals over the last quarter recorded a much slower rate of correction. Main streets in Pune, Mumbai & NCR continued to correct further with Basant Lok (- 29%) and Kemps Corner (- 24%) among the highest drops; Vashi and Thane in Mumbai as well as Koregaon Park in Pune, witnessed stable rents over the previous quarter. Mid-year values in Kolkata, south Hyderabad and Chennai witnessed stabilisation across majority of locations. Brigade Road and Commercial Street in Bangalore that reflected stable rents over last year, witnessed an increase of 17% and 11% respectively.