Report – The New Indian Express

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By Express press service

HYDERABAD: Commercial rental in Hyderabad surpassed pre-pandemic levels as demand doubled in 2021. Hyderabad saw a staggering 72% quarter-on-quarter growth in commercial rental with over 240,000 square feet of leased space in the fourth quarter (Q4) of 2021.

The city recorded more than 50 transactions in the fourth quarter of 2021, surpassing the quarterly average of 31 transactions in 2019 (pre-pandemic). For the whole of 2021, Hyderabad saw a double jump in gross rental activity with almost 1.4 million square feet of space across 200 transactions.

According to the Cushman & Wakefield report, the city saw significant traction in the fourth quarter and accounted for 30% of all transactions compared to subdued activity in the previous quarter. spending during the holiday season is among the reasons for retailer confidence.

Fashion and apparel drive demand in the city

Premium malls have seen an increase in footfall and store-level sales are also reaching pre-pandemic levels. The fashion and apparel category was the main driver of demand, while major submarkets saw traction. Fashion and apparel accounted for the highest proportion of rentals in Q4 2021 with 62% share compared to 36% in Q3.

Multi-brand retail stores and affordable lifestyle brands such as Westside, Zudio, Max, Levi’s and Mugdha have leased space in key micro-markets such as AS Rao Nagar, Ameerpet, Punjagutta, Himayatnagar, Begumpet and Somajiguda. High streets in these core submarkets saw traction accounting for 25% of gross rental activity in 2021.

Sustained footfall and affordable rentals are among the main factors that have driven retailers to high streets. Hyderabad recorded a mid-grade mall completion with 2,50,000 sq. ft. in the fourth quarter after a six-quarter gap in the core Kavadiguda (Praga Mall) submarket.

The mall comes with limited occupancy, following which overall vacancy fell from 19% to 22% in the fourth quarter of 2021. However, tight vacancy levels of around 5-6% prevailed in senior malls due to high demand for quality space and lack of new or relevant supply for nearly two years.

Upper malls continue to attract retailers, especially in the luxury gift, high-end footwear, fashion and apparel categories, which should further reduce vacancy rates in the future. Upper malls and main streets in some places such as Madhapur, Kukatpally, Banjara Hills, Kondapur and Himayat Nagar are expected to see a slight increase in short to medium term rentals.

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