HYDERABAD: The retail sector in Hyderabad is showing signs of recovery after a prolonged slump in sales due to the pandemic, statistics show. Leasing activity in the city is also on the rise.
Hyderabad recorded a staggering 72 per cent quarter-on-quarter growth in retail leasing. More than 2,40,000 sq feet have been leased out in the last quarter of FY2021. The city registered more than 50 deals during the last quarter, exceeding the pre-pandemic quarterly average of 31 deals.
According to a report by Cushman and Wakefield, a consultant real estate firm, the city saw a 2X jump in gross leasing activity in 2021 with nearly 200 deals for 1.4 million sq feet. Malls also witnessed a significant rise in shopping activity in Q4, which accounted for 30 per cent of the overall deals as the activity was subdued in the previous quarter.
Costumers’ pent-up demands during the second Covid wave, along with higher discretionary spending during the festive season, have improved the retailers’ business. High-end malls have witnessed a rise in footfall and store-level sales are also going up to the pre-pandemic levels.
The report further states that fashion & apparel sector accounted for the highest (62 per cent) proportion of leasing in Q4 as compared to 36 per cent in Q3. Multi-brand retail stores and affordable lifestyle brands such as WestSide, Zudio, Max, Levi’s, and Mugdha leased spaces in core micro markets such as AS Rao Nagar, Ameerpet, Punjaguta, Himayath Nagar, Begumpet, and Somajiguda.
City has also recorded one new mall making 2,50,000 sq feet available in Q4 after a gap of six quarters in the core sub-market of Kavadiguda (Praga mall). It has resulted in the rise of overall vacancy from 19 per cent to 22 per cent. High-end malls continue to attract retailers shoppers, particularly for luxury gift, premium footwear, fashion and apparel.
Quoted rentals remained unchanged across the city, and is likely to stay the same for a short term. However, high-end malls at select locations such as Madhapur, Kukatpally, Banjara Hills, Kondapur, and Himayat Nagar are likely to see a slight increase in rentals. Among all areas, rentals in malls were highest in Banjara Hills and Madhapur at Rs 260 per sq feet and Rs 235 per sq feet respectively.