Mumbai- Retail Q4 2019
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M A R K E T B E AT MUMBAI Retail Q4 2019 Mall leasing remains buoyant during 2019 The overall retail mall leasing activity during 2019 remained healthy, mainly on the back of term renewals across all major malls and fresh leasing in select ones. After the success of Seawoods Grand Central, Phase II of the project, which is expected to get operational in Q1 2020, recorded transactions from family entertainment centres (FEC) and F&B outlets during the quarter, thus aiding the leasing volumes in Q4. The overall mall MALL VACANCY IN Q4 2019 10.8% vacancy has dropped to 10.8%, recording a q-o-q drop of 30 bps at end-2019. However, superior grade malls have mere 0.4% vacancy, while the average malls are struggling slightly with 26% mean vacancy levels, indicating the demand polarisation which explains the city’s overall vacancy numbers. 2.5 msf MALL SUPPLY EXPECTED BY 2021 FECs, department stores, fast fashion and F&B brands were the most active during the quarter. Major retail mall transactions during the quarter included Bounce at Infiniti Mall, Malad, Namco and Snow World at Seawood Grand Central Phase II and Shoppers Stop in Phase I of the same project. 7.1% Y-O-Y GROWTH IN MALL RENTS IN GOREGAON Main street leasing remains robust Like the retail malls, main street leasing also saw improved transaction activity during the quarter. The main streets of Bandra, Powai, Andheri – Vile Parle, Thane and Navi Mumbai were the most active main streets during the quarter. Retailers from F&B, apparel and consumer electronics brands were the prominent retailer categories in main street leasing during Q4 2019. Some key main street transactions included FabIndia leasing ~15,000 sf in Vile Parle East, Lord of the Drinks leasing 5,700 sf, Episode One leasing 5,000 sf & Social leasing 4,000 sf – all in Powai and Cultfit taking up 3,200 sf in Andheri West. ECONOMIC INDICATORS Q4 2019 2020 2018 2019 Rents show marginal growth in key mall submarkets Forecast While leasing activity was healthy in both malls and main streets during the quarter, rents across most malls and main street locations remained stable on a q-o-q basis. However, select locations like Goregaon and Lower Parel witnessed q-o-q rent increases of 2.9% and 1.1%, respectively. GDP Growth 6.8% 5.0% 5.5% On a yearly basis, mall rents in Goregaon, Thane and Vashi have risen by 7.1%, 3.3% and 2.9% respectively during 2019. Limited space availability and steady demand levels have driven the rental growth in these locations. Main street rents on both Linking Road and Fort / Kala CPI Growth 3.5% 7.3% 4.5% Ghoda have risen by 2.6% y-o-y in 2019. Going forward, we expect the rents across prominent malls and main street locations to register marginal growth. However, the upcoming uber- Consumer 8.1% 5.5% 7.0% premium malls in BKC are likely to be the bigger drivers of average mall rents on an overall basis in the coming quarters. Spending Govt. Final MALL SUPPLY / VACANCY CATEGORY-WISE STOCK / VACANCY Expenditure 9.2% 15.0% 14.0% 2,000 20% 7,000 30.0% Growth 1,500 6,000 25.0% 15% 5,000 Source: Oxford Economics, Central Statistics Office, 1,000 20.0% IMF, RBI 500 4,000 10% 15.0% - 3,000 10.0% 2,000 (500) 5% 5.0% (1,000) 1,000 (1,500) 0% - 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 MUMBAI 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 Linking Road 800 122 135 0.0% 2.6% Kemps Corner / Breach Candy 430 65 72 0.0% 0.0% Colaba Causeway 600 91 101 0.0% -4.0% Fort Fountain 400 61 67 0.0% 2.6% Lokhandwala Andheri 400 61 67 0.0% 0.0% Borivali LT Road 400 61 67 0.0% 0.0% Chembur 390 59 66 0.0% 0.0% Vashi 360 55 61 0.0% 0.0% Thane 260 40 44 0.0% 0.0% Q-O-Q Y-O-Y PRIME RETAIL RENTS – MALLS INR SF/MTH EURO SF/YR US$ SF/YR CHANGE CHANGE Lower Parel 890 135 150 1.1% 1.1% Link Road – Andheri West 410 62 69 0.0% 0.0% Malad 470 71 79 0.0% 0.0% Goregaon 525 80 88 2.9% 7.1% Kandivali 200 30 34 0.0% 0.0% Kurla 180 27 30 0.0% 0.0% Ghatkopar 260 40 44 0.0% 0.0% Bhandup – Mulund 125 19 21 0.0% 0.0% Vashi – Seawoods 360 55 61 0.0% 2.9% Thane 310 47 52 0.0% 3.3% 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 PROPERTY SUBMARKET TENANT SF TYPE +91 124 4695555 /[email protected] Infiniti Mall Malad Bounce 32,000 Lease Seawoods Grand Central Phase II Seawoods Namco 28,782 Lease Kapil Kanala Associate Director, Research Services Seawoods Grand Central Phase I Seawoods Shoppers Stop 14,582 Lease +91 40 40405555 /[email protected] SIGNIFICANT PROJECTS UNDER CONSTRUCTIONS A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION PROPERTY LOCATION SF COMPLETION DATE 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 services Jio World Drive BKC 450,000 Q1 2020 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, Jio World Plaza BKC 475,000 Q4 2020 valuation and other services. Oberoi Sky City Mall Borivali East 1,000,000 Q4 2021 ©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 presented without any warranty or representations as to its accuracy. cushmanwakefield.com.