Statistics show that the retail sector in the city is showing signs of recovery after a long slump in sales due to the COVID pandemic. Leasing activity in Hyderabad is also on the rise. Hyderabad recorded a staggering 72% 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.
A report by real estate consultancy firm Cushman and Wakefield suggests that Hyderabad saw a 2X jump in gross leasing activity in 2021 with nearly 200 deals for 1.4 million sq feet. Malls also witnessed an ample rise in shopping activity in Q4, which accounted for 30% of the overall deals as the activity was subdued in the previous quarter. Costumers’ pent-up demands during the second Covid wave and higher discretionary spending during the festive season have improved the retailers’ business. As a result, high-end malls have witnessed a rise in footfall, and store-level sales are also rising to pre-pandemic levels.
The report further states that the fashion & apparel sector accounted for the highest (62%) proportion of leasing in Q4 compared to 36% 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, Punjagutta, Ameerpet, Begumpet, Himayath Nagar, and Somajiguda.
Hyderabad 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% to 22%. High-end malls continue to attract retail shoppers, particularly for premium footwear, luxury gifts, fashion, and apparel.
Quoted rentals remained unchanged across Hyderabad and are likely to stay the same for the short term. However, high-end malls at select locations such as Madhapur, Banjara Hills, Kukatpally, Kondapur, and Himayat Nagar will likely 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.