Bangalore Retail Market Beat 4Q10

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  • 8/6/2019 Bangalore Retail Market Beat 4Q10

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    BANGALORE RETAIL REPORT

    4Q10

    P

    This report contains information available to the public and has been relied upon byCushman & Wakefield on the basis that it is accurate and complete. Cushman &Wakefield accepts no responsibility if this should prove not to be the case. Nowarranty or representation, express or implied, is made to the accuracy orcompleteness of the information contained herein, and same is submitted subject toerrors, omissions, change of price, rental or other conditions, withdrawal withoutnotice, and to any special listing conditions imposed by our principals.

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    CONOMYhe Indian economy maintained its high growth momentum, with a realD of 8.9% during the second quarter (July to September) of financial year10-11. The robust growth rate is expected to persist through the balance of fiscal year ending March 2011, with the Ministry of Finance expecting an

    nual real GDP growth rate of 8.75%, the highest in three years. On thepply side, growth in agriculture (4.4% YoY), manufacturing (9.8% YoY)d construction (8.8% YoY) remained firm. Demand was led by fixedestment (11.1% YoY) but growth in all sectors (except imports) remained

    ove 9.0% YoY.

    VERVIEWngalore witnessed fresh mall supply of approximately 180,000 square feetring the fourth quarter of 2010 taking the years total to approximately 1.1llion square feet (across two malls). The citys mall vacancy level continuedbe on the lower side at around 1.0% as most of the operational/new mallserated in almost full occupancy or was launched at lower vacancy levels.tailers continued with their pre-commitments for spaces in under-nstruction malls.ain street rentals showed a northward trend in the range of 3-13% whichs accentuated by meager supply of mall space and lack of space availabilityoss the operational malls as well as the main streets. Leasing activity across main streets continued to show a buoyant trend as KFC, Taco Bell,

    ossword, etc., opened newer outlets. Mall rentals remained stable, however;ysore Road was the only exception registering a decline of about 3.7% over previous quarter on account of receding retailer interest in the micro

    rket.

    UTLOOKhe city is likely to see fresh mall supply in moderately untapped microrkets with high occupancy level which will help in maintaining the vacancyels on the lower side. Rentals across the prominent main streets arepected to continue with the upward trend on account of limited infusion ofw spaces. Newer locations in untapped markets with good catchments andordable rentals are likely to emerge as favorable destinations for organizedail.

    SIGNIFICANT PROJECTS UNDER CONSTRUCTION

    PROPERTY LOCATION SQUARE FEETCOMPLETIO

    DAT

    RoyalMeenakshiMall

    BannerghattaRoad

    450,000 1Q1

    BrigadeOrion

    Rajajinagar 750,000 4Q1

    PRIME RETAIL RENTS MALLS

    INR PER SF/MO 12-

    LOCATION 4Q09 3Q10 4Q10EUROSF/YR

    US$S F/YR

    MONTHOUTLOOK

    Koramangala 400 400 400 80.1 107.4 Magrath Road 315 315 315 63.1 84.6 Cunningham Road 200 200 200 40.1 53.7 Mysore Road 150 140 135 27.0 36.2 Vittal Mallya Road 350 350 350 70.1 94.0 Whitefield 150 150 150 30.0 40.3 Rajarajeshwarinagar 115 115 115 23.0 30.9 Malleshwaram NA 220 220 44.1 59.1

    PRIME RETAIL RENTS MAIN STREET

    INR PER SF/MO 12

    LOCATION 4Q09 3Q10 4Q10EUROSF/YR

    US$S F/YR

    MONOUTL

    MG Road 180 180 185 37.1 49.7 Brigade Road 375 420 440 88.1 118.1 CommercialStreet

    250 300 315 63.1 84.6 100 Feet Road,Indiranagar

    125 135 145 29.0 38.9 Jayanagar, 4thBlock, 11th Main

    200 230 245 49.1 65.8 Sampige Road,Malleshwaram

    85 90 90 18.0 24.2 80 Feet Road,Koramangala

    100 90 100 20.0 26.8 Vit ta l Mallya Road 180 180 185 37.1 49.7 New BEL Road 100 120 135 27.0 36.2 MarathalliJunction

    85 105 110 22.0 29.5 Kamanahalli MainRoad

    90 115 130 26.0 34.9 Note: Values are quoted on carpet area for ground floor properties of vanilla retailers

    SIGNIFICANT LEASING TRANSACTIONS

    PROPERTY LOCATION TENANT SQUARE FEE

    Standalone Hosur Road ManchesterUnited

    7,00

    StandaloneCommercialStreet

    WOW 6,00

    Standalone Lavelle Road Harley Davidson 3,00

    ECONOMIC INDICATORS

    NATIONAL 2009 2010F 201

    GDP Growth 5.7% 8.8% 8.4

    CPI Growth 10.9% 13.2% 6.7

    Private Final Expenditure Growth 4.3% 6.6% 8.0

    Govt. Final Expenditure Growth 10.5% 3.0% 4.0

    Population (In Millions) 1199.1 1215.9 1232Source: IMF & Government of India