MARKETBEAT

RETAIL SNAPSHOT
BENGALURU, INDIA

Q3 2014

A Cushman & Wakefield Research Publication

ECONOMIC OVERVIEW

Positive macro-economic factors reflect

revival of the economy. Indias Gross
Domestic Product (GDP) grew by 5.7% in first
quarter 2014-15 versus 4.6% registered during the
previous quarter. This was Indias fastest quarterly
growth in two years. The manufacturing sector
bounced back from a contraction of 1.4% in fourth quarter 2013-14 to an
expansion of 3.5% in the current quarter. However, quarterly agricultural
growth slowed down from 6.3% to 3.8%. HSBCs Composite Output Index
for India was recorded at 50.6 in August, almost on par with the 50.7
recorded in May.
The Consumer Price Index (CPI) in August was noted at 7.8%,
dropping from 8.3% in May 2014. The Reserve Bank of India (RBI) had
guided for an 8% CPI by January 2015. However, considering that threats to
high inflation still loom large, the RBI continues to be watchful and did not
lower interest rates at the end of September.
Mixed impacts of 2014 budget announcements on the retail
sector. The government earmarked INR5,000 crores for developing
warehouses, which will undoubtedly bring in greater efficiencies to the retail
sector. Introduction of the Goods and Services Tax (GST) in 2015 will lead
to a more mature taxation regime, with positive linkages to the retail
industry. Though the government has stated that it will not allow Foreign
Direct Investment (FDI) in multi-brand retail, it has not actually taken any
steps to repeal the policy; hence, some ambiguity continues.

RETAIL MARKET OVERVIEW

Infusion of mall supply; increase in overall vacancy levels. Bengaluru

witnessed a supply influx after two years with a new mall measuring 310,000
square feet (sf) becoming operational in the northern part. Due to the
supply addition, overall city mall vacancy increased 0.7 percentage point
from the previous quarter and was noted at 7.8%.
Rentals across all mall locations remained steady. In the third
quarter of 2014, electronics, food & beverage (F&B), and apparels brands
leased spaces across malls in the eastern and northern parts of the city. Due
to a low churn, rentals across mall submarkets remained similar to the
previous quarter.
Emerging main streets witnessed traction; most main street
rentals remained steady. Whilst rentals at most main streets remained
stable, New BEL Road witnessed a 3.6% appreciation during the quarter.
Scarcity of quality retail spaces coupled with high demand from apparels and
F&B retailers led to the appreciation. Retailers were also scouting spaces at
Kamanahalli Main Road and the emerging main streets such as HSR Layout
and Sahakar Nagar.

the wake of limited quality supply and high demand from apparels, jewelery
and F&B retailers, Jayanagar 4th Block, 11th Main, Kamanahalli Main Road and
Koramangala 80 Feet Road may witness a slight rental uptrend.

ECONOMIC INDICATORS
NATIONAL
GDP Growth

2013
4.7%

2014F
5.8%

2015F
6.0%

CPI Growth

9.5%

8.2%

7.0%

Private Final Expenditure Growth

2.3%

4.9%

5.7%

Govt. Final Expenditure Growth

2.9%

-0.5%

5.1%

Source: Roubini Global Economics

PRIME RETAIL RENTS SEPTEMBER 2014

MAIN STREETS

INR
SF/MTH
240
320

MG Road
Brigade Road

EURO
SF/YR
37
49

US$
SF/YR
47
63

Q-O-Q
CHANGE
0.0%
0.0%

Y-O-Y
CHANGE
0.0%
-3.0%

Commercial Street

300

46

59

0.0%

-3.2%

Indiranagar 100 Feet

Road
Jayanagar 4th Block,
11th Main
Sampige Road,
Malleswaram
Koramangala 80 Feet
Road
Vittal Mallya Road
New BEL Road
Marathahalli Junction
Kamanahalli Main
Road
MALLS

200

31

39

0.0%

0.0%

330

51

65

0.0%

0.0%

120

18

24

0.0%

0.0%

125

19

25

0.0%

0.0%

270
145
125
125

41
22
19
19

53
29
25
25

0.0%
3.6%
0.0%
0.0%

-10.0%
3.6%
0.0%
0.0%

INR
SF/MTH
420
375
90
70
400
120

EURO
SF/YR
65
58
14
11
61
18

US$
SF/YR
83
74
18
14
79
24

Q-O-Q
CHANGE
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%

Y-O-Y
CHANGE
0.0%
0.0%
-10.0%
-12.5%
0.0%
0.0%

Koramangala
Magrath Road
Cunningham Road
Mysore Road
Vittal Mallya Road
Whitefield
Rajarajeshwarinagar

85

13

17

0.0%

0.0%

Malleswaram

280

43

55

0.0%

12.0%

Bannerghatta Road

195

30

38

0.0%

-2.5%

Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted
Conversion Rate: US$1= INR 60.85 and Euro 1 = INR 78.11

SIGNIFICANT LEASING TRANSACTIONS

PROPERTY

LOCATION

TENANT

SQUARE FEET

Mantri Square

Malleshwaram

Amoeba

4,000

Mall rentals anticipated to appreciate at select locations. Due to an

expected churn in a few established malls in the next quarter, rentals may
appreciate at select locations.

Standalone

JP Nagar

Dunkin Donuts

1,600

Main street rentals expected to maintain status quo. Rentals across

most main streets may remain stable in the upcoming quarter. However, in

PROPERTY

LOCATION

ETA Namma Mall

Vaishnavi Mall

Binnypet
Tumkur Road

OUTLOOK

Cushman & Wakefield (India) Pvt. Ltd.

4th Floor, Pine Valley
Embassy Golf Link Business Park
Intermediate Ring Road, Bengaluru 560 071
www.cushmanwakefield.co.in

For more information, contact:

Siddhart Goel
Director Research Services, India
Tel: +91 22 6657 5555
siddhart.goel@ap.cushwake.com

SIGNIFICANT PROJECTS UNDER CONSTRUCTION

SQUARE FEET

COMPLETION DATE

320,000
200,000

Q2 2015
Q2 2015

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis
that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case.
No warranty or representation, express or implied, is made to the accuracy or completeness of the information
contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions,
withdrawal without notice, and to any special listing conditions imposed by our principals.
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All rights reserved.