India Brands In Top Gear: High Streets Projected To Generate $3 Billion Revenue
Total number of operational stores on high streets across 29 cities are estimated to be 7,246, according to Knight Frank India.
High streets generated an average revenue of $370 per square foot and a potential consumption across 58 high streets in 29 cities will amount to nearly $3 billion for the current financial year. Potential consumption in high streets per square metre exceeds that of operational shopping centres by a significant margin of 238% across the 29 cities, according to Knight Frank India Pvt.
This disparity is primarily attributed to higher trading densities observed across certain categories that thrive predominantly on high streets, the realty consultant firm said in a report.
Total number of operational stores on high streets across 29 cities are estimated to be 7,246, majority of which are located in the tier-1 markets, the report said. In 2023, the National Capital Region (23%), Bengaluru (18%), and Hyderabad (15%) were the top three with the highest number of stores among the top eight cities. Among tier-2 cities, Vadodara (2%), Surat (2%), and Chandigarh (2%) led with the most stores.
Khan Market in New Delhi commanded the highest rent, ranging from Rs 1,000–1,500 per square foot for a month, followed by DLF Galleria in Gurugram, with rents ranging from Rs 800–1,200 per sq ft per month.
The report said 87% of the stores on high streets are occupied by Indian businesses as these are focussed on meeting local preferences, choosing to be in locations that are either in proximity to their catchment or are placed to benefit from the historical or cultural importance of these high streets.
Rentals On High Streets
Among tier-1 cities, New Delhi's Connaught Place saw the highest rental growth at 33% year-on-year, followed by Bengaluru's Hennur Main Road and Commercial Street with 20% and 17% year-on-year growth respectively, the report said.
Guwahati-Shillong Road recorded the highest rent appreciation of 38% among tier-2 cities. This is also highest for all 58 high streets across the country.
Surge In Ghost Shopping Centres
Ghost shopping centres have witnessed a substantial surge, with a remarkable 238% year-on-year increase in gross leasable area in prime markets since 2022. This growth has been accompanied by a notable rise in the number of such centres, reaching 64 by the end of 2023, compared to 57 in the preceding year. The consequential impact of this trend is estimated to be a loss of value amounting to Rs 67 billion in 2023 alone, according to the report.
The NCR accounted for the highest ghost-shopping-centre stock, measuring 5.3 million sq ft (58% year-on-year rise), followed by Mumbai with 2.1 million sq ft (86% YoY increase) and Bengaluru with 2 million sq ft (46% YoY growth).
Hyderabad is the only city to record a decline in ghost shopping centres by 19% year-on-year to 0.9 million sq ft in 2023. The sharpest rise in ghost shopping centres were recorded in Kolkata, albeit at a lower base.
E-commerce poses a significant challenge for brick-and-mortar retailers. When discussing malls, they represent more than just shopping destinations; they embody a lifestyle, according to Gulam Zia, senior executive director at Knight Frank India.
Malls that thrive typically maintain vacancy rates of less than 5%, indicating near-full occupancy. However, some malls struggle due to management deficiencies or inadequate physical infrastructure connecting them with urban centers, Zia said told NDTV Profit in an interview.
