The global slowdown effect is haunting retail businesses in Mumbai. Rentals at malls have dropped between 5 and 10 per cent, while wayside shopping hubs like Bandra’s Linking Road and Colaba Causeway have seen a dip between 5 and 24 per cent.
A study by real estate consultancy firm, Cushman & Wakefield, has revealed that rentals in the retail sector have dropped in the last three months. For instance, at shopping areas in Kemps Corner and Breach Candy, rents have dropped by 24 per cent.
A 1,000-sq-ft shop in the area now commands a monthly rent of Rs 3.8 lakh as against Rs 5 lakh three months ago. A year ago, it fetched Rs 9.5 lakh.
Ditto with Linking Road, Bandra. A 1000-sq-ft shop fetches Rs 5 lakh compared to Rs 5.50 lakh three months ago (a fall of 9 per cent). The same shop raked in Rs 13.5 lakh a year ago. “Retailers have realised they cannot sustain with such high rents and are renegotiating with landlords,” said Jaideep Wahi director of Retail Services at Cushman & Wakefield.
Wahi predicted the possibility of a further drop of 10 per cent but said they had stabilised, by far. For city malls, the report said in Mulund and Goregaon rents had fallen, while in areas like Lower Parel, Malad and Andheri, they had remained unchanged. “We are renegotiating wherever possible. Profits are under pressure,” said Jay Gupta, managing director of The Loot, a chain shop of readymade garments.