MARKETBEAT

RETAIL SNAPSHOT

CHENNAI, INDIA

Q2 2014

A Cushman & Wakefield Research Publication

ECONOMIC OVERVIEW

OUTLOOK

Indias manufacturing output recovering

Decline in mall rentals. Due to low demand for existing shopping malls,

from this quarter. Indias Gross Domestic

city mall vacancy levels will remain stagnant over the next quarter.

Product (GDP) registered a growth rate of 4.7%

Downward bias in mall rentals may be seen in most mall locations in the

during 2013-2014 due to a contraction in

coming quarter.

manufacturing and mining output. However in

Stable rentals for main streets. Most main streets are expected to

May, HSBCs Composite Output Index for India was noted at 50.7,

maintain a stable rental trend. However, Anna Nagar 2 nd Avenue may

registering an expansion from 49.5 in April and 48.9 in March due to new

witness a downward pressure in rentals due to the ongoing infrastructure

orders and increased demand. A strong new government at the center led

work affecting demand.

to a surge in foreign inflows, causing a rally in the Indian Rupee which

ECONOMIC INDICATORS

reached an 11-month high of INR58.37 versus the US Dollar in May, though

it is currently trading at around 60.
Greater availability of credit to public sector. Since the Consumer
Price Index (CPI) in May was recorded at 8.28%, 18 basis points higher from
8.10% in March, the Reserve Bank of India (RBI) maintained status quo on
the Repo Rate this quarter. However, the RBI reduced the Statutory

NATIONAL
GDP Growth

2013
4.7%

2014F
5.7%

2015F
6.3%

CPI Growth

10.1%

8.0%

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

Liquidity Ratio (SLR) by 50 basis points to 22.5% to ensure enhanced

availability of credit to the businesses to boost economic revival and meet

PRIME RETAIL RENTS JUNE 2014

higher investment demand, whilst still maintaining a watch on inflation.

MAIN STREETS

Inflation is expected to remain high until the end of the year due to

Nungambakkam High Road

Khadar Nawaz Khan Road
Cathedral Road RK Salai
Usman Road South
Usman Road North
Adyar Main Road
Anna Nagar 2nd Avenue
Purusavakam High Road
Pondy Bazar
Velachery

predictions of 7% deficiency in monsoons caused by the El Nino.

RETAIL MARKET OVERVIEW

Marginal drop in mall vacancy. Overall mall vacancy recorded at 5.9%
in the second quarter of 2014 dipped by 0.4 percentage point from the
previous quarter. Lack of mall supply and limited demand from apparels,
accessories and food and beverage (F&B) retailers led to this marginal
change in vacancy.
Dip in mall rentals. Low demand from retailers due to a lack of quality
mall spaces resulted in a dip in rentals across most mall micro-markets.

MALLS

Chennai-South witnessed a 4.3% rental dip as retailers showed interest only

Chennai CBD I*

in established malls. Chennai-Western saw rentals fall sharply by 9%

Chennai CBD II *
Chennai Western*
Chennai South*

quarter-on-quarter, as this location became unattractive to retailers due to

ongoing infrastructure work that have been impacting footfalls negatively.

INR
SF/MTH
150
210
140
130
140
150
130
110
150
130
INR
SF/MTH
225
300
200
220

EURO
SF/YR
22
31
21
19
21
22
19
16
22
19
EURO
SF/YR
33
44
29
32

US$
SF/YR
30
42
28
26
28
30
26
22
30
26
US$
SF/YR
45
60
40
44

coupled with high demand from jewelry retailers, led to a 4% quarter-onquarter rental appreciation in both Usman Road-South and Usman Road-

SIGNIFICANT LEASING TRANSACTIONS

North. In the Cathedral Road-RK Salai main street, lack of optimum-sized

PROPERTY
Phoenix Market City

LOCATION
Velachery

TENANT
Satyam Cinemas

Stand Alone

Royapettah

Reliance Digital

CBD have witnessed high enquiries from jewelry retailers, rentals have
maintained status quo on other main streets.

Cushman & Wakefield (India) Pvt Ltd

Paramount Plaza, 5th Floor
#7A/22 Nungambakkam High Road
Chennai - 600034
Tel: +91 44 4299 5555
www.cushmanwakefield.co.in

Y-O-Y
CHANGE
7.1%
5.0%
-6.7%
4.0%
7.7%
0.0%
-7.1%
0.0%
0.0%
-7.1%
Y-O-Y
CHANGE
-6.3%

0.0%
-9.1%
-4.3%

NA
-13.0%
-2.2%

Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted
Conversion Rate US$1= INR 60.12 and Euro 1 = INR 81.79
*Select shopping malls have been considered for calculation of mall rents

High demand for established main streets. Lack of retail spaces,

floor plates led to a 7% rental decline. Whilst select main streets near the

Q-O-Q
CHANGE
0.0%
0.0%
-6.7%
4.0%
3.7%
0.0%
-7.1%
0.0%
0.0%
0.0%
Q-O-Q
CHANGE
-2.2%

SQUARE FEET
50,000
10,000

SIGNIFICANT PROJECTS UNDER CONSTRUCTION

For more information, contact:

Siddhart Goel
Director - Research
Tel: +9122 6657 5555
siddhart.goel@ap.cushwake.com

PROPERTY
Junction Mall

LOCATION
Rajiv Gandhi Salai

Gold Souk

Vandalur

SQUARE FEET
600,000

COMPLETION DATE
Q4 2015

500,000

Q4 2015

The 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
subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice,
and to any special listing conditions imposed by our principals.
2014 Cushman & Wakefield, Inc.
All rights reserved