No new supplies, rental values remaining stable in most places and small corrections taking place in some places mark the retail market scene in Hyderabad.
The latest report from Cushman & Wakefield (C&W) on the retail market recorded the lowest mall vacancy among all the cities with no new supplies were witnessed in the 3 quarter. And given the moderate demand and lack of lease renewals, the rental values in malls continue to be stable.
According to C&W report, most retailers have put their expansion plans on hold till next year while adopting a wait and watch policy.
With few transactions in the footwear and apparel segment occurring in Banjara Hills and Madhapur micro-markets, the mall vacancy has been lowered by 0.7 per cent in the quarter.
Hyderabad retail market has been marred with inordinate construction delays, says Jaideep Wahi, Director, Retail Agency, Cushman & Wakefield India. “Inspite of enjoying the lowest mall vacancy in all cities, no mall supply has commenced since 2010,” he says.
In the high streets, Raj Bhavan road/Somajiguda main street witnessed a price correction of around 4.5 per cent over the previous quarter.
This when rest of the locations experienced stable rentals specially on account of development of new supply in Kukatpally to Madinaguda stretch, Jubilee Hills and Chaitanyapuri to L.B.Nagar.
According to the report, these locations have started to see the development of high streets due to the growing demand from the surrounding residential locations.
Given the favourable rentals, potential catchment areas and flexible leasing terms on offer, Habsiguda, L.B. Nagar, A.S.Rao Nagar and Dilsukhnagar high streets are coming up and registered quite a few transaction activities.
“Addition of supply in the first quarter of 2013 in Kukatpally area shall bring some mall space into the city but the mall rental values are anticipated to be static. Moderate demand conditions shall prevail in the short term, thus sustaining the rental values in high streets,” adds Mr. Wahi.