20th March 2017 - Retail Real Estate in Gurugram - A Brief Look and Checkpoint
Most of my articles on linked in and our website blog have focussed on the residential and office segments in Gurugram, as we've not really dealt too much in retail real estate in Gurugram since our inception.
As such my understanding on this segment of the market is limited, however from whatever my little experience has been in this segment it's pretty much in a down phase as far as capital values go. Mostly sellers are illiquid and opting for lease renewals as their leases roll over, with a slight decrement in rentals. Demand wise the segment is perhaps the slowest compared to office and residential segments with barely any buyers interested in entering the market in the current economic situation.
This is not to say that there are micro-markets existing where rentals are at an all time high – such as DLF Galleria in DLF phase 4, the costliest rental micro-market in the city at present and at the top end in terms of occupancy.
Typical mall rentals on MG Road have taken a slight dip with malls such as MGF Metropolitan recording a rental of RS. 200 psf per month. Galleria is 4 times that roughly!
In terms of retail space sales there's plenty of supply on the golf course extension road whilst there's new inventory at Bestech's office building in Sushant lok 1 with per sq. foot sale prices of 22,000 psf and sale units in 100 – 27,000 sq. ft. sizes.
Ambience mall continues to show unchanged rentals quarter on quarter with strong tenant base in terms of brands and anchor tenants. Catchment for galleria and ambience respectively is great for different reasons. For Galleria it's a local catchment with all the dlf complexes in the vicinity whilst Ambience gets a mix of Gurgaon and Delhi mall visitors. CyberHub has seen some new rollover tenants with Tacobell being the latest tenant entrant on the ground floor. In other news, PVR's buy-out of DLF's DT cinemas meant a revamp of cinemas in various locations of DLF's malls in Gurugram. The latest being the one in DT Mega Mall undergoing renovation.
It's tough times as far as retail sales go for both the primary and secondary markets in Gurugram retail real estate. I estimate it will be the last to pick up in terms of capital values following after residential and office sales pick-up.
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