Substantial addition to supply has kept the rentals for the retail mall space in Pune stable in the first quarter of the year 2012, a report from real estate advisory Cushman & Wakefield India has said.
Signs of revival in the retail segment have, however, ensured that rentals for spaces on high streets stay firm with a rising trend, the report said.
Cushman & Wakefield’s study of the national retail space situation has also shown a firm and rising trend in most metro and mini metro markets, with Ahmedabad and Hyderabad recording high appreciation in rentals in high street locations.
In Pune, while retailers showed optimism as a new mall became functional with 80% occupancy in the first quarter of 2012, rentals remained stable due to sizeable vacancy in the mall at around 20%. Cushman & Wakefield actually expects that there will be marginal drop in mall rentals, due to the influx of approximately 700,000 sq ft of additional mall space in the micro market of Hadapsar.
Lack of available space in the high street has led to stable rentals across the city, the report said. The high streets are likely to witness some escalation in rentals due to the lack of quality space and continued enquiries from international brands looking to establish their presence in these micro markets, the report added.
The Cushman & Wakefield report says the high street rentals in Pune are rising at 3% against 9-25% rise witnessed in other major Indian cities.
Jaideep Wahi, Director, Retail Services, Cushman & Wakefield, said, “The first quarter of the year has been positive for the retail market and indeed over the last one year. While, the mall space has been moving cautiously to ensure that demand to supply ratio remains stable to maintain rental values, the high streets continue to see increased demand and interest from a range of retailers.”
Wahi said globally, India is being viewed as on an interesting cusp from where retailing can take a quantum leap. “The approval for 100% FDI in single brand outlet in India is a crucial step towards restructuring the retail scenario in India. We expect more international retailers to show interest in India which would eventually lead to a more structured approach towards Retail Real Estate in India.”
