India- Bengaluru- Retail Q4 2019

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India- Bengaluru- Retail Q4 2019 M A R K E T B E AT BENGALURU Retail Q4 2019 Healthy retailer traction continues Retail activity in malls has remained healthy, though constrained by declining vacancy levels. With average vacancy levels in superior-grade malls falling to a low of 2.0% by end-2019, the next-in-line malls are now witnessing an active retailer churn and have seen their average vacancy levels th LEASING SHARE OF MAIN STREETS drop by 60 bps y-o-y. This is further proof of the high demand for quality retail space in the city. Mall share in the city’s retail transactions recorded 3/4 IN TOTAL RETAIL TRANSACTION (2019) an improved share of 27% in 2019 compared to 21% in the previous year while the declining availability of space in quality malls has in turn generated high demand for the main streets as is evident from the increasing presence of prominent brands on main streets. Main streets have 9.69% VACANCY RATE (2019) accounted for over three-fourths share of the city’s overall retail transaction activity in 2018 and 2019, indicative of the strong inclination of retailers towards prominent main streets. Bengaluru along with Mumbai and Delhi NCR remain the top three gateway cities for global retailers. Some of the international brands that took up space in the city this quarter are Stanley, Toni & Guy, Calvin Klein among others. In addition to the prominent SHARE OF FASHION & APPAREL 42% SEGMENT (2019) main streets like Indiranagar, Koramangala that enjoy strong preference among retailers, newer locations like BTM Layout, RT Nagar, Uttarahalli Main Road and Sahakar Nagar also contributed to the quarterly leasing activity. Fashion and F&B segments drive demand momentum Fashion, Apparel & Accessories and Food & Beverage segments made significant contributions to the leasing volumes this quarter, on similar lines as seen in previous quarters. The share of Fashion & Apparel in the city’s retail transactions has shown a marked increase from 29% in 2018 to ECONOMIC INDICATORS Q4 2019 42% by end 2019. The F&B sector also remained quite active with its share of leasing activity increasing from 6.7% in 2018 to 15.6% in 2019. Average per store space take-up for Fashion & Apparel was around 4,000-4,500 sf in 2019, quite similar to the previous year, while F&B segment’s 2020 2018 2019 average store sizes were around 2,000-2,500 sf in 2019 compared to 3,000-3,500 sf in 2018. The Wellness, spa & salon brands and home décor & Forecast furnishing retailers too increased their footprint across the city, contributing around 4.5% and 3.8%, respectively to the annual leasing in 2019. GDP Growth 6.8% 5.0% 5.5% Rents remain stable While the demand for quality retail space remains robust and vacancy remains tight in prime malls, rents have largely trended within the prevailing CPI Growth 3.5% 7.3% 4.5% range. A similar situation has been recorded in the main streets with rents remaining within the existing range through the year. However, we may see some rental movement with future mall supply coming on-stream in the medium term, expected to fetch better rents and push average rents Consumer 8.1% 5.5% 7.0% Spending higher consequently. Govt. Final MALL SUPPLY / VACANCY CATEGORY-WISE STOCK / VACANCY Expenditure 9.2% 15.0% 14.0% 2,500 16.0% 6,000 20.0% Growth 14.0% 5,000 2,000 15.0% Source: Oxford Economics, Central Statistics Office, 12.0% 4,000 IMF, RBI 1,500 10.0% 3,000 10.0% 1,000 8.0% 2,000 500 6.0% 5.0% 1,000 0 4.0% 2016 2017 2018 2019 2020F - 0.0% Superior Malls Good Malls Average Malls MALL SUPPLY('000 sf) VACANCY (%) MALL INVENTORY ('000 sf) VACANCY (%) M A R K E T B E AT BENGALURU Retail Q4 2019 MARKET STATISTICS Q-O-Q Y-O-Y INR SF/MTH EURO SF/YR US$ SF/YR PRIME RETAIL RENTS-MAIN STREETS CHANGE CHANGE MG Road 240 36 40 0% 0% Brigade Road 280 43 47 0% 0% Commercial Street 300 46 51 0% 0% Indiranagar 100 Feet Road 200 30 34 0% 5.3% Jayanagar 4th Block, 11th Main 330 50 56 0% 0% Sampige Road, Malleshwaram 120 18 20 0% 0% Koramangala 80 Feet Road 120 18 20 0% 0% Vittal Mallya Road 270 41 45 0% 0% New BEL Road 155 24 26 0% 3.3% Marathahalli Junction 160 24 27 0% 0% Kamanahalli Main Road 155 24 26 0% 3.3% HSR Layout 27th Main 140 21 24 0% 0% PRIME RETAIL RENTS - MALLS Koramangala 420 64 71 0% 0% Magrath Road 375 57 63 0% 0% Cunningham Road 90 14 15 0% 0% Mysore Road 65 10 11 0% 0% Vittal Mallya Road 400 61 67 0% 0% Whitefield 120 18 20 0% 0% Rajarajeshwari Nagar 80 12 13 0% 0% Malleshwaram 280 43 47 0% 0% Bannerghatta Road 195 30 33 0% 0% Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted US$ = INR 71.26 AND € = INR 78.92 Rohan Sharma SIGNIFICANT LEASING TRANSACTIONS Q4 2019 Director, Research Services +91 124 4695555 /[email protected] PROPERTY LOCATION TENANT SF Kapil Kanala Garuda Mall Ashok Nagar Play Factory 20,000 Associate Director, Research Services Main Street Indiranagar Buffalo Wild Wings 15,000 +91 40 40405555 /[email protected] Park Square (Ascendas) Mall Whitefield Hard Rock Cafe 5,500 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate SIGNIFICANT PROJECTS UNDER CONSTRUCTION services firms with approximately 51,000 employees in 400 offices and 70 countries. In 2018, the firm had revenue of $8.2 billion across core services of property, facilities and project management, leasing, PROPERTY LOCATION SF COMPLETION DATE capital markets, valuation and other services. Orion 3 Old Madras Road (Brigade Golden Triangle) 250,000 Q2 2020 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION ©2020 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources believed to be reliable. The information may contain errors or omissions and is Salarpuria Sattva Divinity Mysore Road 250,000 Q4 2020 presented without any warranty or representations as to its accuracy. cushmanwakefield.com.
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