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— PHOTO: K. MURALI KUMAR

Top draw: Koramangala has seen a record 92 per cent increase in rentals. Picture shows a view of the National Games Village in the area.

Khader Nawaz Khan Road in Nugambakkam, Chennai, also witnessed high rental growth of 106 per cent making it the second highest riser while S.P. Road in Begumpet, Hyderabad. and Koramangala 80 Feet Road in Bangalore were among the highest risers with increase of 100 per cent and 92 per cent respectively.

Rajneesh Mahajan, National Head, Retail, Cushman & Wakefield India, says “The economic growth in southern India has provided a large consumer base with increased spending power. The retailers are enjoying better revenues in these markets not only from the existing retail destinations but also in the suburban locations.

As the store revenues become comparable to Delhi and Mumbai the demand for retail real estate would push the prices closer to these two markets.”

International real estate consultants opine that rental market largely defines the affordability characteristics and this is in tune with Hyderabad and Bangalore with the IT salaries dictating the real estate trends with respect to housing.

In Chennai, the factors that have helped Khader Nawaz Khan Road gain so much on rentals are rise in branded wear showrooms, a mushroom growth in lifestyle malls and a steep difference in people’s approach to home-décor shopping.

Different responses from people across the three cities explain the situation. Says Pyari Lal Dhaken who has settled in a luxurious flat in Koramangala with Rs. 34,000 as monthly rent, “My son’s entry into HP more than helped us take this decision. Earlier we were paying half the rent on K.R. Road. Now with rising salaries my son says this is quite inexpensive!” chuckles the septuagenarian talking of altered salary purses that bring in new lifestyles.

“We have every branded showroom here with foreign market presence and a gastronomic fare offering the best for a foodie,” explains son Nitish Lal, justifying this locality choice.

In Hyderabad, four bachelors who entered Infosys from different parts of India can’t hold their excitement. Be it Banjara Hills for living or Begumpet for getting into the right showroom for shopping, both the places more than explain the mindset of earning pockets, feel the young entrants who have M.S. degrees from India and abroad.

In Chennai, Kalyani Gopal describes her joy as she walked into a construction materials boutique on Khader Nawaz Khan Road. “I just saw the mural on the wall of this showroom and as I walked in to see a sea of flooring and bathroom choices, I knew it was a boutique, not a shop. If this is the kind of variety from across the world that we will be pampered with, heavy rentals are something that the owners will recover with the well-heeled walking in much-so-often,” she says.

Now, if one corroborates with such responses, what one deducts are factors and trends that are seeping in to characterise the said conditions. It’s simple: the economy opens up, people see more money and open up to a new world.

In the Cushman and Wakefield annual global report, ‘Main Streets Across the World 2007 (MSATW),’ Khan Market in Delhi emerged as the 16th most expensive retail high street in the world, higher than Moscow, Beijing, Kuala Lumpur, Amsterdam, Toronto and the like.

Khan Market, apart from being the most expensive retail destination in India, is also the biggest riser in the ranking of the world’s most expensive shopping locations in terms of retail rents, moving up eight places from last year’s 24th position. New York’s Fifth Avenue retained its title as the world’s most expensive shopping destination followed by Hong Kong’s Causeway Bay and Avenue des Champs Elysées in Paris.

Rajneesh Mahajan adds: “Retail is going through a revolution in India, although part of the increase in rents is due to the lack of high quality space in the right location. This is in strong contrast to other emerging markets such as China, where less restrictive legislation has meant more construction of retail outlets and retail chains accounting for a much larger share of total sales.”

Banjara Hills and Jubilee Hills, though traditional markets, are preferred by the new-age retailers with the highest annual rent rise in the country.

These are prime residential locations, with demand for space far exceeding the supply. Begumpet witnessed cent percent increase in rentals over the last year, indicating strong demand dynamics. The exponential growth in residential development in hi-tech Kukatpally would bring these pockets up on the retailer radar in times to come.

With new high streets emerging in future the prices would surely have a downward curve in the next 18-24 months.

In Bangalore, though Commercial Street and Brigade Road continue to be prime retail locations, improved infrastructure including parking facilities has resulted in stronger growth in Indiranagar and Koramangala. Koramangala 80 Feet Road emerged as the only high street in Koramangala where smaller brands have commenced operations. With rents up by 92 per cent year-on-year, the region currently has a host of big brand outlets. The growth of the city has developed new residential pockets and provided retailers opportunities to explore business in new retail precincts. In future this would lead to strengthening of these emerging markets.

Khader Nawaz Khan (KNK) Road in Chennai, located just off Nungambakkam High Road, is a preferred shopping destination in the CBD, with presence of brands such as Benetton, B&O, Atmosphere, Wills Life Style, Stanley Boutique, Evoluzione, Subway, Movenpick, and Mocha.

The rental details worldwide is a report brought together by Cushman & Wakefield, one of the largest commercial real estate services firms with 215 offices in 56 countries.

It provides integrated solutions by advising, implementing and managing on behalf of landlords, tenants, lenders and investors through every stage of the real estate process.

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