MARKETBEAT RETAIL SNAPSHOT HYDERABAD, INDIA

MARKETBEAT
RETAIL SNAPSHOT
HYDERABAD, INDIA
Q3 2014
A Cushman & Wakefield Research Publication
ECONOMIC OVERVIEW
Positive macro-economic factors reflect
revival of the economy. India’s Gross
Domestic Product (GDP) grew by 5.7% in first
quarter 2014-15 versus 4.6% registered during the
previous quarter. This was India’s 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%. HSBC’s 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
Influx of new mall supply. In the third quarter of 2014, a new mall
measuring 500,000 square feet (sf) commenced operations in Kukatpally.
The mall became operational with a high occupancy of 97%, which resulted
in lowering the city’s overall mall vacancy by 0.9 percentage point to 7.4%.
Mall rentals remained stable. With moderate demand and limited churn
only in one mall in Madhapur, rentals remained stable across all submarkets
from the quarter. A few international brands in the apparels, food &
beverage (F&B), and footwear categories took up space in Madhapur.
Main streets rentals remained steady. However, Jubilee Hills Road
No. 36 witnessed a drop of 3.9% in rentals due to parking issues and
congestion caused by the ongoing metro construction. Apparels and
sporting goods retailers leased spaces in main streets such as Jubilee Hills
Road No 36 and Banjara Hills. Other main streets such as Madhapur,
Kukatpally and Himayathnagar also witnessed transactions across various
segments.
OUTLOOK
Expected mall supply influx, rentals to remain stable. A mall
measuring 200,000 sf is likely to become operational in Attapur during the
next quarter. Mall rentals are likely to remain stable.
Cushman & Wakefield (India) Pvt. Ltd.
No 111, 1st Floor, Maximus 2B
Mindspace IT Park, Hi Tech City
Madhapur, Hyderabad – 500 081
+91 40 4040 5555
www.cushmanwakefield.co.in
For more information, contact:
Siddhart Goel
Director – Research Services, India
Tel: +91 22 6657 5555
siddhart.goel@ap.cushwake.com
Main street rentals are expected to remain stable. Going forward,
main street rentals are likely to remain stable across the city with the
exception of Jubilee Hills Road No. 36, where it may decline further due to
waning retailers’ interest.
ECONOMIC INDICATORS
NATIONAL
GDP Growth
CPI Growth
2013
4.7%
9.5%
2014F
5.8%
8.2%
2015F
6.0%
7.0%
Private Final Expenditure Growth
Govt. Final Expenditure Growth
2.3%
2.9%
4.9%
-0.5%
5.7%
5.1%
Source: Roubini Global Economics
PRIME RETAIL RENTS – SEPTEMBER 2014
MAIN STREETS
M.G. Road
S.P. Road/
Begumpet
Raj Bhavan
Road/Somajiguda
Banjara Hills
Abids
Himayathnagar
Punjagutta
Ameerpet
Jubilee Hills
Kukatpally NH.9
A.S. Rao Nagar
Madhapur
MALLS
NTR Gardens
Himayathnagar
Banjara Hills
Madhapur
Panjagutta
Somajiguda
Kukatpally
INR
SF/MTH
110
110
EURO
SF/YR
17
17
US$
SF/YR
22
22
Q-O-Q
CHANGE
0.0%
0.0%
Y-O-Y
CHANGE
0.0%
0.0%
90
14
18
0.0%
0.0%
130
110
135
20
17
21
26
22
27
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
155
125
125
140
120
100
INR
SF/MTH
125
150
260
235
140
140
180
24
19
20
22
18
15
EURO
SF/YR
19
23
40
36
22
22
28
31
25
26
28
24
20
US$
SF/YR
25
30
51
46
28
28
35
0.0%
0.0%
-3.9%
0.0%
0.0%
0.0%
Q-O-Q
CHANGE
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-3.9%
0.0%
0.0%
0.0%
Y-O-Y
CHANGE
0.0%
0.0%
0.0%
0.0%
NA
NA
NA
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
Standalone
Standalone
LOCATION
Kothapet
Begumpet
TENANT
Taruni
Mochi
SQUARE FEET
6,000
3,000
SIGNIFICANT PROJECTS UNDER CONSTRUCTION
PROPERTY
M Cube Mall
Maruthi InfinityMall
LOCATION
Attapur
Chandanagar
SQUARE FEET
200,000
195,000
COMPLETION DATE
Q4 2014
Q1 2015
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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,
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