APPD Market Report Article

Bengaluru

May 31, 2022

1.4%

INR 190

Rents
Rising

Overall retail demand shows positive momentum

  • In 1Q22, with COVID-19-related restrictions largely relaxed, overall leasing activity showed signs of healthy retailer traction. Recently completed malls continued to witness healthy leasing activity in the quarter. The increase in footfall and the resumption of business in both the shopping malls and the high streets of the city are positive signs for the retail sector.
  • Quarterly leasing activity in the city was led by the F&A, electronic and F&B retailer segments. Miniso, One Plus and Marks & Spencer among others, were mini anchors. New retail brands took up space in the recently completed Lulu Global Mall, Forum Rex Walk Mall and Bhartiya City Mall.

One new mall completion enters in 1Q22

  • Forum Rex Walk at Brigade Road in the Prime city submarket became operational in 1Q22, adding 0.2 million sq ft to the retail stock in the city. The total retail stock of the city stands at 13.59 million sq ft.
  • There is a healthy pipeline of new supply coming up, with Salarpuria Sattva Divinity Mall at Mysore Road and Mantri Arena Mall (now VR Arena) at Kanakapura Road likely to be operational in 2022 and 2023, respectively.

Capital values and rents show an upward trend

  • Overall city level rents have risen by 1.6% q-o-q and now stand at INR 96 per sq ft per month. The overall rents have shown a rising trend largely due to the recent new supply coming online at higher rental levels.
  • Overall capital values were also up by 2.1% q-o-q, gaining from the supply of quality assets. Overall market yield was largely unchanged at 11.3%.

Outlook: Retail market to show signs of recovery

  • We expect that retailers will remain cautious but also quietly confident about the future of physical retail, as they focus mainly on good-quality developments.
  • The overall capital values and rents are expected to hold steady and show some growth shoots, largely backed by the performance of new and upcoming malls.

Note: Bengaluru Retail refers to Bengaluru's overall prime retail market.

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