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M A R K E T B E AT Retail Q4 2019

Main Streets remain the primary traction nodes With the city’s mall inventory stable at 4.71 msf for over a year now and the superior grade mall inventory operating at near 100% occupancy levels, there has been a sustained retailer drift towards the prominent main streets like Park Street & Gariahat with a similar trend visible in the last quarter 5.94% MALL VACANCY RATE (2019) of the year as well. Retailers have also shown an increased interest for peripheral locations like , Sodepur among others for their footprint expansion. Around 82% of the annual leasing volumes recorded in 2019 was on account of main street activity, compared to around 74% share in 2018. This growing share of main streets in the city’s gross leasing activity over the last couple of years, clearly indicates that main streets LEASING SHARE OF MAIN STREETS have stepped in the gap for fulfilling retailer demand which has been restricted by the low availability of quality and organised retail space in the 82% (2019) city. With superior grade malls operating at full capacity and with no new mall supply getting added, moderate transaction activity has been observed in next-in-line malls during the year, which has resulted in a 64 bps y-o-y drop in overall mall vacancy rates by end 2019. Vacancy levels in average malls are in the 11-12% range, with retailer traction remaining sluggish in these projects as retailers prefer main streets over such SHARE OF HYPERMARKETS IN developments. Superior malls like Acropolis, and with almost nil vacancy levels, continued to see transaction activity in the 36% LEASING (2019) 1,000-1,500 sf store sizes, driven by retailer churn as they remain in demand. With only 0.28 msf of retail space likely to come on-stream by 2020, the healthy demand for quality space shall result in the city remaining underserved in terms of organised and superior category mall space, keeping main streets in the thick of action. Big format retailers in hyper/super market category remain most active Fashion & Apparel, F&B and the hypermarket segments accounted for around 70% of the annual retail leasing in the city, with hypermarkets alone ECONOMIC INDICATORS Q4 2019 contributing a 36% share to the total transaction volumes, improving their y-o-y space take-up share. Large format hypermarket retailers like Reliance Mart, More and Spencer’s were the most active, largely taking up space in main streets of secondary and peripheral locations where such 2020 large areas were available. Other active brands in this category during the year Easyday and Reliance Fresh. Fashion, Apparel and F&B segments 2018 2019 Forecast were active demand drivers of retail space activity during Q4 as well, a trend that continued through the year. Prominent retailers in these segments taking up medium to large space formats during the year included Reliance Trends, Sreeleathers, Zudio, Nykaa, and Barbeque Nation GDP Growth 6.8% 5.0% 5.5% among others. Rentals remain range bound Retail lease rents have remained range-bound across both malls and main streets. However, Park Street, one of the most prominent main streets CPI Growth 3.5% 7.3% 4.5% of the city and the South Kolkata malls, particularly the South City Mall have seen a y-o-y rise of 10% and a q-o-q growth of 2-4% backed by steady Consumer retailer demand. We expect the overall city rents to witness some appreciation in the medium term on the back of increasing retailer interest and 8.1% 5.5% 7.0% Spending retailer churn at incremental rents, especially in the superior category malls. Govt. Final MALL SUPPLY / VACANCY CATEGORY-WISE STOCK / VACANCY Expenditure 9.2% 15.0% 14.0% 350 7% 1,800 14.0% Growth 12.0% 300 6% 1,700 Source: Oxford Economics, Central Statistics Office, 250 5% 10.0% 1,600 IMF, RBI 200 4% 8.0% 150 3% 1,500 6.0% 100 2% 4.0% 1,400 50 1% 2.0% - 0% 1,300 0.0% 2016 2017 2018 2019 2020F 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 KOLKATA 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

Park Street 550 84 93 2% 10% 450 68 76 0% 0% Lindsay Street 450 68 76 0% 0% Elgin Road 325 49 55 0% 0% Theatre Road 230 35 39 0% 0% Gariahat 250 38 42 0% 0% 160 24 27 0% 0% 160 24 27 0% 0% 210 32 35 0% 0% VIP Road 150 23 25 0% 0% Q-O-Q Y-O-Y PRIME RETAIL RENTS – MALLS INR SF/MTH EURO SF/YR US$ SF/YR CHANGE CHANGE South Kolkata 440 67 74 4% 10% East Kolkata 415 63 70 0% 4% 130 20 22 0% 4% Elgin Road 525 80 88 0% -5% 210 32 35 0% -7% 600 91 101 0% 0%

Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted US$ 1 = INR 71.26, € 1 = INR 78.92

SIGNIFICANT LEASING TRANSACTIONS Q4 2019 PROPERTY LOCATION TENANT SF Main Street More 22,000 Rohan Sharma Director, Research Services Main Street Gariahat Sree Leathers 20,000 +91 124 4695555 /[email protected] Main Street Narendrapur Reliance Mart 13,000 Main Street Reliance Trends 14,000 Kapil Kanala Main Street Sodepur Reliance Mart 12,000 Associate Director, Research Services +91 40 40405555 /[email protected] Main Street VIP Road Spencer’s 6,000

Main Street Park Street Cult. Fit 5,367 A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION Cushman & Wakefield (NYSE: CWK) is a leading global real estate services firm that delivers exceptional Mall Acropoils Miniso 1,200 value for real estate occupiers and owners. Cushman & Wakefield is among the largest real estate 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, capital markets, SIGNIFICANT PROJECTS UNDER CONSTRUCTIONS valuation and other services.

PROPERTY LOCATION SF COMPLETION DATE ©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 Genexx Square Joka 275,000 Q1 2020 presented without any warranty or representations as to its accuracy. cushmanwakefield.com