MARKETBEAT

Retail Snapshot Q4 2016

PUNE, INDIA

ECONOMIC INDICATORS Economy

The GDP growth of India for the July-September quarter was
National 2014 2015 2016F recorded at 7.3%, up from 7.1% in the preceding quarter.
GDP Growth 7.0% 7.2% 7.5% Despite a short-term blip caused by the recent currency
demonetization, a normal monsoon season and impending pay
CPI Growth 6.6% 4.9% 5.4%
hikes for government employees are likely to spur a recovery in
Private Final Expenditure Growth 6.8% 6.2% 7.6%
consumer sentiments. In October, the Consumer Price Index
Govt. Final Expenditure Growth 3.1% 5.5% 11.7% (CPI), a key price indicator of the Reserve Bank of India (RBI) for
Source: CSO, RBI, Oxford Economics
policy purposes, was seen at 4.2% - the lowest in 14 months
on the back of lower food inflation. Consequently, there were
PRIME RETAIL RENTS DECEMBER 2016 expectations of a cut in the Repo Rate by the RBI in its policy
revision in December, which however, did not take place given
MAIN STREETS
the slowdown in economic activity. According to the 2016 Global
INR EURO US$ Q-O-Q Y-O-Y
SF/MTH SF/YR SF/YR Change Change Retail Development Index, which ranks top 30 developing
countries for retail investment worldwide, India has jumped 13
M.G. Road 320 54 57 0.0% 0.0%
positions from last year to rank 2nd. The organised retail space
J.M. Road 370 63 65 0.0% 0.0% (malls) in India has seen high investment activity this year as
F.C. Road 250 42 44 0.0% 0.0% investors are bullish about the prospects of this asset class,
coupled with the opportunity to list retail assets under REITs.
Koregaon Park 120 20 21 0.0% 0.0%

Aundh 165 28 29 -2.9% -8.3% Market Overview

Bund Garden Rd 140 24 25 0.0% 0.0% Limited leasing activity in malls; marginal decline in
Mumbai-Pune vacancy levels. The quarter was marked by limited leasing
Highway 120 20 21 0.0% 4.3% activity, with leasing concentrated in malls in Koregaon Park and
PCMC Hadapsar. The leasing activity was dominated by food &
MALLS beverage (F&B) retailers with brands such as Subway and
INR EURO US$ Q-O-Q Y-O-Y Burger King expanding their footprint in the city. Amidst no fresh
SF/MTH SF/YR SF/YR Change Change
supply and subdued leasing, vacancy rate declined marginally to
Camp 215 36 38 0.0% 0.0% 19.5% at the end of December 2016.

Koregaon Park 135 23 24 0.0% 0.0%

Mall rentals remained consistent. Mall rental values remained
Nagar Road 250 42 44 0.0% 0.0% stable during the quarter due to sluggish leasing activity and
Hadapsar 180 30 32 0.0% 0.0% sufficient availability in existing stock.
PCMC 190 32 34 0.0% 0.0%
39 41
Moderate leasing activity in main streets; rental values
Aundh* 230 0.0% NA
remained stable. Moderate leasing activity was witnessed in
prime main streets at F.C. Road and M.G. Road, driven by F&B
Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted
Conversion Rate: US$1= INR 67.85 and Euro 1 = INR 70.91 and lifestyle retailers. Rental values across all main street
PCMC denotes Pimpri Chinchwad Municipal Corporation
*Newly added in Q2 2016
locations maintained their status quo except in Aundh, where
they corrected by 3% quarter-on-quarter (q-o-q) due to
competitive pressure from a recently launched mall in the vicinity.

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 MARKETBEAT

Retail Snapshot Q4 2016

PUNE, INDIA

Outlook
SIGNIFICANT LEASING TRANSACTIONS
Leasing activity in malls expected to strengthen; rentals
Property Location Tenant Square Feet anticipated to appreciate in select submarkets. Owing to
Standalone Building F.C. Road Pizza Hut 3,000 increased enquiries from lifestyle retailers for space in malls in
Amanora Town
Aundh, leasing activity is expected to strengthen during the
Hadapsar Burger King 2,500 upcoming quarter. Hence, Aundh may witness slight appreciation
Centre Mall
in mall rental values. However, rental values in all other
SIGNIFICANT PROJECT UNDER CONSTRUCTION submarkets are expected to remain stable.
Property Location Square Feet Completion Date
Senapati
Main street rentals likely to soften at select submarkets. Main
My Mall 350,000 Q3 2017 street rentals at Aundh are likely to soften in the upcoming quarter
Bapat Rd
Elpro Mall PCMC 400,000 Q1 2018 owing to competitive pressure from malls in the submarket.
Rentals in all other main street locations are expected to remain
consistent.

About Cushman & Wakefield Siddhart Goel

Cushman & Wakefield is a global leader in commercial real estate services, helping clients transform the way
Senior Director
people work, shop, and live. The firms 43,000 employees in more than 60 countries provide deep local and Research Services, India
global insights that create significant value for occupiers and investors around the world. Cushman & Wakefield Tel: +91 80 40465555
is among the largest commercial real estate services firms in the world with revenues of $5 billion across core siddhart.goel@ap.cushwake.com
services of agency leasing, asset services, capital markets, facilities services (branded C&W Services), global
occupier services, investment management (branded DTZ Investors), tenant representation and valuations &
advisory. To learn more, visit www.cushmanwakefield.com or follow @Cushwake on Twitter.

Copyright 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple sources considered
to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. www.cushmanwakefield.com