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CP edging towards the top of shopping destinations?
Despite a high average rent of ₹950-1,050 per sq feet, retailers are finding Connaught Place, or Rajiv Chowk as it was renamed, an attractive destination
What with India getting labelled the bright sport in the global economy, and commercial real estate showing signs of revival, leading international brands are looking beyond malls and picking up spaces in high street markets.
The latest is Swedish retail giant H&M, which has picked up 28,000 sq feet space in the Capital’s upscale shopping destination, Connaught Place (CP), which makes it the biggest retail outlet in the area by some distance.
According to real estate experts, the biggest store in CP till now has been the 8,000 sq ft. occupied by United Colours of Benetton.
Retail has been driving a pickup in the commercial real estate market, according to industry experts. The first half of 2016 (January-June) saw almost 1.5 million sq. ft. get added to the organised retail space, largely in the national capital region (NCR), Bangalore and Pune, a CBRE research note said.
“Retailer demand also remained upbeat across various cities, with prominent global players such as Massimo Dutti, Longchamp, Cole Haan and Hunkemoller making inroads in the country while others such as GAP, H&M, Marks & Spencer, Ducati and Superdry continued to expand,” the note said.
“CP is on an upswing in the last couple of years, after all construction activities have ended there. With this space we are confident we will further strengthen the position of CP as the No1 High Street shopping district across India,” Janne Einola, country manager, H&M India said.
Amongst high-street markets in Delhi, Connaught Place witnessed a highest rental growth of 6-8% in the first half of calendar year 2016, mainly due to surge in activity by F&B brands. In other areas, the ongoing Delhi Metro construction, which has been playing spoilsport for commercial real estate rentals, is slated to end soon.
Rental values rose by 5-7% in South Extension, indicative of revival of retailer interest in the micro market. The rentals in Khan Market, the costliest in the NCR, continued to remain stable over the review period.
Prime mall developments across Saket District Center and Vasant Kunj had approximately 11-13% growth over H1, largely driven by limited vacancy levels and strong demand. Rental values in Gurgaon also witnessed positive movement (5-7%) in the past six months, largely driven by sustained occupier focus towards select properties.
Average rent in Khan market was stagnant and the highest in Delhi NCR at Rs 1,250-1,500 per sq feet, followed by CP at Rs 950-1,050 per sq feet. On the other hand, malls in Gurgaon and Vasant Kunj were at Rs 375-475 per sq feet and Rs 400-500 per sq feet, during January-June, 2016.