Retail space rentals up 11-17% in Delhi
Normal lease terms are likely to resume as the pandemic abates and business outlook improves
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New Delhi: Rentals of high-street retail are inching back to pre-Covid levels in Delhi-NCR on the back of revival in business, as rents in upscale Khan Market, South Extension and Connaught Place have risen 11-17 percent during July-September compared to the previous quarter, according to Cushman and Wakefield.
"Rentals inching back to pre-Covid levels as market activity strengthens," global property consultant Cushman and Wakefield (C&W) said in its report Marketbeat- Delhi-NCR, Retail Q3 2021 (July-September).
The Delhi-NCR market recorded improved retail activity during the September quarter, the consultant said, adding that early signs of recovery could be seen with a pick-up in retail leasing. "With rentals inching back to pre-Covid levels and accommodation on commercial terms narrowing, the only direction for retail in the coming months is upwards," said Vibhor Jain, Managing Director, North, Cushman and Wakefield. "Increased vaccination and a low caseload have certainly played an important role in the return to normalcy and higher consumer confidence," the report said.
On rent scenario, the consultant found that the rentals of high street location Khan Market increased 12.5 per cent to Rs 1,350 per square feet during the July-September quarter as against the previous quarter. In South Extension I & II, the rent rose by 16.7 per cent quarter on quarter (Q-o-Q) to Rs 700 per square feet during the third quarter of the current calendar year. Connaught Place in central Delhi saw an increase of 11.1 per cent in rentals to Rs 1,000 per square feet.
The annual increase in rentals in these three locations were same in percentage terms. The consultant highlighted that landlords are gradually withdrawing the benefits they gave to retailers on rentals and other commercial terms due to the Covid pandemic. "Landlords are demanding the pre-Covid rents after supporting retailers with rent waivers or staggered rentals to tide over the pandemic period. With the fears of third wave subsiding to a great extent, landlords want to limit any further rent waivers, especially after the income loss borne by them during last five quarters," C&W said.
