‘Main streets dominate retail space leasing in Q1 2023; accounts for 94% transactions’
Kolkata: With no new supply of malls, main streets in Kolkata drove retail space leasing volumes in the first quarter of 2023 accounting for 94
per cent of transactions while some prominent retailers are hunting for suitable locations in peripheral areas of the city.
According to a report by the global real estate services firm Cushman & Wakefield, Kolkata witnessed healthy retail space leasing volumes in Q1 across categories such as fashion and apparel, jewellery, consumer durables and F&B with the city recording space take-up by some new brands which opened their outlets across prominent main streets.
Total retail leasing volume stood at 54000 sqft in the quarter. As per the report, although this is lower than the figure recorded in Q4 2022, it is consistent with the 50000-55000 sqft quarterly average leasing volumes seen over the last 4-5 quarters.
The report observed that with no new supply of malls, main streets drove leasing volumes in the first quarter accounting for around 94 per cent of transactions, in continuation of a trend that has been witnessed over the past several quarters.
It mentions that some of the notable retail space transactions were recorded across Park Street (CBD micro
market), Rashbehari Avenue (South Suburban), BT Road (North Peripheral) and Southern Bypass (South Peripheral). It is learnt that expansion plans are reportedly in the works for a few retailers, and they are on the lookout for suitable locations not just in the core micro-markets of Kolkata but also in certain surrounding peripheral locations.
Malls recorded limited transactions, accounting for merely 6 per cent of quarterly leasing volumes.
“With space across superior malls in the city quite limited and no new supply expected in the immediate short term, retailer expansion plans are likely to benefit prime main streets, particularly in emerging locations which are witnessing healthy consumption growth”, the report observed.
City malls recorded a vacancy of 6.3 per cent in Q1, 2023.
In the context of rent, in Q1, grade A malls across the city reported a rental growth of 3-4 per cent QoQ. Rental growth is expected to continue with mall footfalls and retailer sales gradually returning to pre-Covid levels.
Most of the malls have reverted to the pre-Covid arrangement of minimum guaranteed rents with the option of revenue-share only on a case-to-case basis for certain brands which have not recovered completely.
On the contrary, prominent main streets reported 5-6 per cent QoQ rental appreciation with more growth expected over the upcoming quarters given the strong demand for space among retailers, the report said.
