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Highstreets strategically locat- around the city centre for mmercial establishments ming the nerve centre for the urban growth. Realty sector players concur that by bringing in a sizable quantity of walk-in business, they help the local economy by enabling local businesses and surveys state that consumers may spend nearly three times as much at highstreets as they do at malls.
No wonder, real estate developers have started incorporating high street retail in their portfolios and as part of the mixed-use developments to increases the value of both residential and commercial buildings.
As per Rahul Arora, Head of Office Leasing Advisory and Retail Services, India, JLL, “India’s retail sector is on an elevated growth curve where the focus is on creating an innovative built environment, greater connections with the consumers, and curating physical storefronts in untapped regions of the country including tier II and III cities.”
According to CBRE South Asia Pvt. Ltd, high streets constituted a 45% share in the overall luxury retail leasing in 2023, and remained the top choice for luxury brands in India’s top eight cities - Delhi-NCR, Mumbai, Bangalore, Kolkata, Pune, Ahmedabad, Chennai, and Hyder- abad. Luxury brands leased 0.3 mn. sq. ft. of space in the high street store formats, registering over 100% Y-o-Y increase.
The rental growth across prominent main streets in Q2 2024 further underscores their growing appeal. Kolkata, Bangalore, Hyderabad and Mumbai, have all experienced sig- nificant year-on-year rental increases, demonstrating strong demand and potential for high street retail in the country. Saurabh Shatdal, Head Retail and Managing Director, Capital Markets, Cushman & Wake- field stated, "The second quarter of 2024 was marked by a strong demand for high street retail. The high street rental growth has seen a notable increase and we anticipate the main street activity to remain healthy. Additionally, the dominance of domestic brands, accounting for 53% of leasing volume, along with the strong performance of fashion and F&B highlight the evolving retail preferences in India.”
TOP CITIES HIGH STREET LEASING
Delhi-NCR - With 0.36 million square feet of main street leasing, primarily from Gurgaon, main streets were the main drivers of activity this quarter.
Mumbai - Prominent Mumbai main streets saw consistent lease activity during the quarter, totaling about 71,200 square feet.
Bengaluru – The city saw 0.16 mil- lion square feet of main street leasing in the second quarter of 2024.
Hyderabad - The lease activity in Hyderabad's retail sector in- creased significantly in Q2 2024, totaling 0.63 msf, a 29% QOQ rise and a 43% YOY gain. Important locations on important roadways have seen a notable boost in recent quarters. The average rentals in the city's main streets have increased by up to 14% year over year but has stayed relatively stable quarter over quarter.
Kolkata - In Q2 2024, Kolkata saw retail lease volumes of around 63,000 square feet, representing a 61% rise on QoQ basis and a 46% increase on YoY bases.
Pune - The number of well- planned main streets in the city is growing as more and more residen- tial units and commercial construc- tions are added. Strong leasing in Koregaon Park's high street resulted in a massive 127% gain in rentals. It is projected that the city's main streets will continue to have range- bound average rental prices.
Chennai - The lease volume on Chennai's main streets increased significantly in the second quarter, hitting 0.10 million square feet. 77% of the lease volume was made up of domestic brands, demonstrating the dominance of local companies in Chennai's retail market. Suburban South, Northwest, and Southwest were the main suburban routes in the city where the majority of leasing activity was centered.
Ahmedabad - In the second quarter of 2024, Ahmedabad had a decent main street lease volume of approxi- mately 61000 square feet, indicating a slight decline of 9% from the previous quarter's robust results. On a quarterly basis, main street rentals have mostly stayed steady, while year-over-year growth has been between 7-12%.
Khan Market in Delhi has been ranked as the 22nd most expensive retail high street location globally, with monthly rents up to INR 1,500 per square foot. Brigade Road in Bengaluru has become famous worldwide for attracting a myriad of tourists with its inimitable blend of high-end retail and innovative commercial spaces.
EXPANSION DYNAMICS
According to a JLL India, high street retail spaces in prominent locations demonstrate greater rental growth and lower vacancy rates compared to traditional malls. This robust rental growth is bolstered by the desirability of these locations,
attracting consistent foot traffic and ensuring higher occupancy. A prime example of this trend is Golf Course Extension in Gurgaon, which stands out as one of the best high street retail spaces in India and has seen significant development by leading real estate developers.
As per Knight Frank survey, 87% of stores on high streets are occupied by Indian businesses as these are focused on meeting local preferences therefore choosing to be in locations which are either in proximity to their catchment or are placed to benefit from the historical or cultural importance of these high streets.
The report further reveals that the potential consumption in high streets on a per sq m basis surpasses that of the operational shopping centres by 238% across the 29 cit- ies, mainly due to higher trading densities across some categories that fare well only on high streets.
The total number of operational stores on high streets across 29 cities are mostly located in the tier 1 markets. Last year, the National Capital Region (23%), Bengaluru (18%), and Hyderabad (15%) emerged as the top three cities 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. Notably, Khan Market in NCR commanded the highest rent, ranging from INR 1000-1500 /sq ft/ month, followed by DLF Galleria in Gurugram with rents ranging from INR 800-1200 /sq ft/month.
EVOLVING TRENDS
As reports suggest, despite grappling with inadequate infrastructure, many retail high street locales are now witnessing con- certed endeavors towards urban renewal particularly in tier 1 cities. Going forward, the establishment of new mobility infrastructure will fur- ther catalyst the prime high streets across the country. As per Vinay Wadhwa, Group Head Sales, Vatika Group, the Indian high-street experience has been enhanced by better amenities, infrastructure but most important feature is convenience. These areas are easily accessible as the residents stay nearby, adequate parking facilities for easy entry and exit and better public transit. With features like landscaped piazza, pedestrian-friendly pathways, and shaded places, the new urban design encourages customers to spend more time.”
While, evolving consumer demographics and preferences have intensified the demand for high- street retail spaces, driven by enhanced shopping experiences, there has been a massive uptick in new formats like Shop-Cum-Office (SCO) spaces, catering to the rise of hybrid work models. These smaller spaces offer greater flexibility, cater to niche markets, and often require lower operational costs, making them attractive options in the current climate. Developers, quick to notice the rapid rise in demand for small and medium format commercial and office spaces, have increasingly come to offer hybrid spaces that offer the best of both worlds to the customers.
With the integration of dining, shopping, and leisure activities, highstreets have developed into emblems of the modern community, offering a whole retail experience. Highstreets are therefore more symbolically expressive to millennials and Gen Z since they value experiences above simple commerce.
Pop-ups, food festivals, live music, and art exhibits are being presented to create sensory environments. Among the ways that technology is used in these attempts to improve the shopping experience include interactive displays, aug- mented reality installations, and customized mobile applications. They therefore provide a lively and captivating setting for activities beyond than basic retail.
The future of high street retail in India looks bright because of rising consumer purchasing power and an increasing need for experiential shopping. Government attempts to construct smart cities and modernize infrastructure make high street shopping viable.
Upscale retail experiences are becoming more and more in de- mand as a result of the growing middle class and rising urbanization. But it is the capacity of high street retailers to offer unique, immersive experiences and maintain contin- uous innovation cycles, that will determine their ability to draw and retain customers in their locations.
In India, the top five most expensive main streets are Khan Market and Connaught Place in Delhi, Galleria Market in Gurugram, Linking Road in Mumbai, and Park Street in Kolkata.
There has been a recent surge in the development of high street retail spaces in cities like Delhi, Mumbai, Bengaluru, and Pune. Quintessential example of modern high street spaces includes, Delhi's Connaught Place and Bombay's Kala Ghoda, which blend antiquity with contemporary lifestyle.
