Rents rise 14% in Delhi’s Connaught Place on strong retailer demand

Rentals for retail spaces in Delhi’s Connaught Place rose 14% in the January-March quarter on strong demand from retailers, real estate consultant Cushman and Wakefield said in a report.

The monthly rent for retail spaces in Connaught Place (inner circle) stood at Rs1,150-1,250 (about $13.30-14.50) per sq. ft, while that in another upscale high-street Khan Market stood at Rs1,600-1,650 (about $18.50-19.20) per sq. ft.

The asking rent is based on carpet area of ground floor vanilla stores, the consultant said.

While rents in Khan Market rose 7% in the January-March quarter from a year ago, the highest increase in rent of 25% in the Delhi-National Capital Region was seen in Kamla Nagar, followed by a 20% year-on-year jump at Galleria Market in Gurugram.

Retail spaces in Galleria Market commanded a monthly rent of Rs1,150–1,250 per sq. ft, while those in Kamla Nagar demanded Rs480–510 per sq. ft, the Cushman and Wakefield report showed.

Sector 29 in Gurugram, a major food and beverage (F&B) hub, saw rental growth of 12-15%, while South Extension and Rajouri Garden locations remained stable when compared to last year.

Fashion and the F&B segment took up most retail space in the region during the quarter with a 24% share each, followed by entertainment and department store segments with 18% and 11% share, respectively, the report said.

Leasing by F&B brands almost doubled in the quarter when compared to a year ago. The fashion segment grabbed the most space in malls with a 31% share, while the F&B segment took the lead in main street leasing with 32% share.

As no new malls were added in the Delhi-NCR market during the quarter, vacancy levels at the commercial centers declined by 38 basis points, and by whopping 3.5 percentage points on an annual basis to 12.1%. One basis point is one-hundredth of a percentage point.