Covid-19 second wave: Key luxury markets see drop in rentals

Similarly, high-street markets of Kala Ghoda, Bandra Linking Road and Fort in Mumbai also saw retail rentals decline anywhere between 5% and 10% during the same period. (Representative image)

The second, and a more virulent surge in Covid-19 infections, has adversely impacted rentals across India’s toniest shopping destinations, with retail hubs like Khan Market in Delhi and Kala Ghoda in Mumbai among the worst impacted.

The retail sector has already been badly hurt by the lockdowns and restrictions on mobility across states.

“With Covid wreaking havoc in the country, average monthly rentals across key high-street markets in top cities witnessed some corrections,” Anarock ,which tracks the real estate space, said. It observed India’s most expensive shopping hub – Khan Market — witnessed average monthly rentals decline by as much as 8-17% in Q1 2021 against Q1 2020.

Similarly, high-street markets of Kala Ghoda, Bandra Linking Road and Fort in Mumbai also saw retail rentals decline anywhere between 5% and 10% during the same period.

The average monthly rentals in Khan Market hovered around Rs 1,000-1,100 per sq ft as on Q1 2021 end. The rentals at Kala Ghoda and Fort area in Mumbai are around Rs 450-500 per sq ft each, whereas at Bandra Linking Road they stand at around Rs 750-900 per sq ft.

Anarock Retail joint MD Pankaj Renjhen said retail has been one of the worst affected since early 2020. With almost zero sales amid the lockdown and thereafter as well for a few months when retailers had to keep their stores closed or even curtail future expansion plans. As a result, the average monthly rentals across major high-street retail markets mostly saw corrections across cities.

However, there were also a few markets that saw an upward trend. For instance, Hyderabad localities such as Gachibowli, Banjara Hills and Jubilee Hills saw average retail rentals increase in Q1 2021 against Q1 2020.

The average monthly retail rentals in Gachibowli are now at Rs 115-125 per sq ft. Last year, they were in the range of Rs 100-120 per sq ft. In Banjara Hills 12, the average monthly rentals increased from Rs 120-130 per sq ft in Q1 2020 to anywhere between Rs 135-140 per sq ft.

“If we consider trends of the previous two quarters, retail segment seemed to be on the verge of recovery and was gradually inching towards pre-pandemic-level business. However, the second wave has once again crimped this growth. In an overall trend, many of the prominent high streets in the country saw reduced monthly rentals over the last one year,” Renjhen said.

“Given this sombre scenario, the average monthly rentals across major high-street retail markets began correcting by anywhere between 2% and 30%. However, some markets saw an upward trend in the same period,” he added.