M A R K E T B E AT

CHENNAI
Retail Q4 2019

Tight Vacancy in prime malls

Demand polarisation is clearly visible, with prime, superior-grade mall operating at near 100% occupancy levels, even as the average malls
0.1% VACANCY IN SUPERIOR MALLS struggle to retain retailers as they continue to cede ground to prime malls and even prominent main streets. In fact, the vacancy rate in average
malls has risen by 130 bps q-o-q to 15.7% in Q4. On the other hand, there is a constant jostling among prominent retail brands for limited
vacancy and any upcoming availability in prime malls. In Q4, key retail transactions in prime malls such as Palladium and Phoenix Market City
9.5% Y-O-Y GROWTH IN MAIN
STREET RENTS
included Malabar Gold, Celio among others.

Strong Rental Growth in High Streets

0.68 msf MALL COMPLETIONS (2019) Main streets in Chennai continue to remain major centres for retail leasing activity in the city. Average rental growth on main streets stood at a
very healthy 10.6% on a y-o-y basis, with Anna Nagar witnessing the highest growth at 19%, followed by Adyar and Pondy Bazaar at 12% and 11
% respectively, on an annual basis. This robust growth in rents is backed by a steady demand across a diverse retailer base. Brands like Carat
lane, W, Palm Shores among others have opened their stores this quarter in the above-mentioned high streets.
With the right mix of mid and premium shopping outlets along with a varied F&B retailer base, Anna Nagar remains the leader among main
ECONOMIC INDICATORS Q4 2019 streets in Chennai. The strong growth in main street rents compares favourably with the low growth of malls rents, which increased by just 1.7%
2020
by Q4 2019 on a y-o-y basis.
2018 2019
Forecast
Fashion and Apparel continues to dominate leasing activity
GDP Growth 6.8% 5.0% 5.5%
Fashion and Apparel held a significant 43% share of the total leasing activity recorded this quarter across both malls and main streets. F&B
segment remains a key contributor with a 16% share of the quarterly leasing volumes. Well-known apparel brands such as Van Heusen, Zudio
CPI Growth 3.5% 7.3% 4.5%
and Reliance Trends continue to expand their base in Chennai. The city has also seen the emergence of short-sized QSR formats popping up
Consumer around the city as everyday dining options are facing competition from home delivery services.
8.1% 5.5% 7.0%
Spending
Govt. Final MALL SUPPLY /VACANCY RATE AVAILABILITY BY PRODUCT TYPE
Expenditure 9.2% 15.0% 14.0% 3,500 20.00%
Growth 1,400 10.00%
1,200 3,000
8.00% 15.00%
Source: Oxford Economics, Central Statistics Office, 1,000 2,500
IMF, RBI 800 6.00% 2,000
10.00%
600 1,500
4.00%
400 1,000 5.00%
2.00% 500
200
- 0.00% - 0.00%
2016 2017 2018 2019 2020F Superior Malls Good Malls Average Malls
MALL SUPPLY ('000 sf) VACANCY (%) MALL INVENTORY ('000 sf) VACANCY (%)
M A R K E T B E AT

CHENNAI
Retail Q4 2019

MARKET STATISTICS
Q-O-Q Y-O-Y
PRIME RETAIL RENTS – MAIN STREETS INR SF/MTH EURO SF/YR US$ SF/YR
CHANGE CHANGE

Nungambakkam High Road 135 21 23 3.7% 8.0%

Khadar Nawaz Khan Road 145 22 24 0.0% 3.6%

Cathedral Road – R.K. Salai 118 18 20 2.6% 7.3%

Usman Road - South 98 15 17 3.2% 8.9%

Usman Road - North 108 16 18 2.9% 8.0%

Adyar Main Road 140 21 24 2.1% 12.0%

Anna Nagar 2nd Avenue 155 24 26 0.0% 19.2%

Purasawalkam High Road 115 17 19 4.5% 4.5%

Pondy Bazaar 150 23 25 0.0% 11.1%

Velachery 110 17 19 0.0% 10.0%

Ambattur (MTH Road) 100 15 17 0.0% 11.1%

Q-O-Q Y-O-Y
PRIME RETAIL RENTS – MALLS INR SF/MTH EURO SF/YR US$ SF/YR
CHANGE CHANGE
Chennai - CBD 225 34 38 8.9% 0.0%

Chennai - Western 185 28 31 10.3% 2.8%

Chennai - South 190 29 32 13.0% 2.7%

Note: Asking rent (INR/sf/month) on carpet area of ground floor Vanilla stores is quoted
US$ = INR 71.26 AND € = INR 78.92

Rohan Sharma
SIGNIFICANT LEASING TRANSACTIONS Q4 2019
Director, Research Services
PROPERTY LOCATION TENANT SF +91 124 4695555 / rohan.sharma1@cushwake.com
Marina Mall Egattur Marks & Spencer 13,000
Kapil Kanala
Independent Building R.K. Salai Tanishq 12,000 Associate Director, Research Services
Independent Building Madhavaram Reliance Trends 8,000
+91 40 40405555 / kapil.kanala@ap.cushwake.com

SIGNIFICANT PROJECTS UNDER CONSTRUCTIONS A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION

PROPERTY LOCATION SF COMPLETION DATE ©2019 Cushman & Wakefield. All rights reserved. The information
contained within this report is gathered from multiple sources believed
Esthell Mall Velachery 200,000 Q1 2020 to be reliable. The information may contain errors or omissions and is
presented without any warranty or representations as to its accuracy.

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