By: Anshuman Magazine, CMD, CBRE South Asia
Track2Realty: Over the past year, Mumbai continued to remain a preferred city for both domestic and foreign brands keen to open their first outlets or expand their presence across India. The city’s favorable demographics, along with the availability of investment-grade retail space, led to strong demand from retailers for shopping space.
The prominent high streets of Linking Road, Colaba Causeway and Kemps Corner remained the preferred micro-markets for retailers—primarily from the F&B, fashion and apparel segments. Along with various domestic ventures, foreign brands such as Johnston & Murphy, a specialist clothing brand from the US made its India debut by opening its first outlet at Linking Road in 2013; while UK-based F&B retailer, Pinkberry, also opened its first Mumbai outlet in the year.
German fashion brand, Marc Cain, opened a mono-label-store (third in the city) on Nepeansea Road during 2013 too. Apparel brands such as Puma, Clarks, Gant and Arrow also opened new stores on Linking Road, taking up retail space ranging from 1,000–2,000 sq. ft.
Owing to lack of quality space and limited churn, retailers explored emerging high-streets such as Horiman Circle, Kala Ghoda, Andheri, Borivali and Powai. These locations offered comparatively lower rentals, good quality retail space and an immediate catchment with high purchasing power. Prominent F&B brands, Hard Rock Café and Debonairs Pizza, opened their outlets at Andheri (W); while Harry’s, a premium lifestyle bar from Singapore, opened its first India outlet at Powai.
In the luxury segment, French footwear brand, Christian Louboutin, opened its second store in the country and its first in Mumbai at Horniman Circle. Borivali and Prabhadevi also saw space take-up from brands across segments. Another notable store launch in 2013 was Marks and Spencer’s largest India outlet (approximately 35,000 sq. ft.) at Bandra.
Along with high streets, demand for retail space was upbeat in the city’s mall clusters too. Mall development in the Eastern as well as Western Suburbs saw steady demand for retail space. Popular malls like Phoenix Market City in Kurla, RCity Centre in Ghatkopar, and Neptune Magnet Mall in Bhandup continued to generate significant footfalls and occupier interest from retailers.
RCity Center at Ghatkoparsaw the launch of India’s first outlet from the Mexican chain of family entertainment, KidZania;along with shops from F&B retailers such as Indigo Deli, Mamagoto, Banana Leaf, Quattro, Pico Express and Starbucks. Another Mexican brand—the multiplex operator, Cinepolis—opened its first outlet at Neptune Magnet Mall; and the Singapore-based fashion retailer, BYSI, opened its flagship store at Phoenix Market City.
Malls in Central Mumbai also experienced an increase in occupier demand. UK-based apparel brand, Thomas Pink, Japanese confessionary brand, Royce Chocolate, luxury German ceramic brand, Villeroy & Boch, and the US-based Stuart Weitzman entered the city with outlets at Palladium and High Street Phoenix in Lower Parel. In addition, Armani Jeans, Mufti and Forever 21 took up space at Malad’s Infiniti Mall; while Gant opened its store at The Oberoi Mall in Goregaon.
In terms of new supply, around 1 million sq. ft. was added in Thane in 2013 with the completion of Viviana Mall. The mall included Shoppers Stop, Hypercity, Lifestyle, Globus, Reliance Trends, Max, and Marks & Spencer as anchor tenants. F&B retailers such as Starbucks, Yogurberry, Gelato Italiano and Baskin Robbins also opened their stores in the mall. During the later part of the year, this mall witnessed store openings from brands such as Copper Chimney, Simba Toys, Hidesign and Mother Care.
Rental values across most of the high streets and mall developments witnessed a yearly decline. Rental values on Linking Road declined by 8–9% y-o-y, owing to shift in occupier interest for these malls. This has been largely due to limited availability of quality retail space and high rental values in this micro-market.
Apart from the organised mall cluster of Central Mumbai, rental values remained under pressure in most micro-markets as developers/landlords lowered their rental expectations to reduce existing vacancy levels. Rental values in Central Mumbai appreciated by 4–5% on a y-o-y basis; while on the other hand, they declined by 9–10% in the Western Suburbs and around 24–25% in the Eastern Suburbs over the previous year.
Going forward, prime high streets and Grade A malls will continue to witness steady demand from both domestic and international retailers planning an expansion or entry into the city. Owing to strong interest from retailers in Central Mumbai, rental values might witness marginal appreciation in the coming months. However, rentals on the whole are likely to remain under pressure, as retailers are likely to adopt a cautious approach amid continued sluggishness in economic sentiments and consumer confidence.
