Hyderabad sees robust retail growth, demand surpasses pre-pandemic levels
Hyderabad: Hyderabad is witnessing robust retail growth led by high streets, aggressive expansions, and continued momentum in 2022. There hasn’t been any noticeable impact due to Omicron / third wave and the momentum has continued unabated and retailers are expanding aggressively across all locations. Overall retail demand this year could go up to 1.7-2 million […]
Hyderabad: Hyderabad is witnessing robust retail growth led by high streets, aggressive expansions, and continued momentum in 2022. There hasn’t been any noticeable impact due to Omicron / third wave and the momentum has continued unabated and retailers are expanding aggressively across all locations. Overall retail demand this year could go up to 1.7-2 million sq ft.
The city recorded a staggering 72 per cent quarter-on-quarter growth in retail leasing with more than 2.4 lakh sq ft of space leased in Q4 (October-December) 2021. Hyderabad saw over 50 deals in Q4 2021 alone, exceeding the quarterly average of 31 deals during 2019 (pre-pandemic).
Veera Babu, MD, Hyderabad & East India, Cushman & Wakefield, told Telangana Today in an exclusive interview, “After hitting a reset button in 2020, the retail market in Hyderabad has bounced back strongly in 2021 with demand surpassing the pre-pandemic levels.”
“For the full year 2021, the city saw a 2X jump in gross leasing activity with nearly 1.4 million sq ft of space across 200 deals. High streets have accounted for more than 90 per cent of this leasing activity. Continuing this growth momentum, retail demand could touch 2 million sq ft in 2022,” he added.
Space requirement
Expansions across all retail categories, brands, and space requirements that were put on hold or deferred during Covid-19 have come back to the market over the last 6-9 months. He added, several major brands across categories such as fast fashion, premium ethnic wear, high-end fashion, luxury brands, F&B, consumer electronics etc. are looking for space options in major retail catchments.
Leasing enquiries have more than doubled over the last 3-6 months. Retail conglomerates such as Reliance, Tata Group, ABFRL (Aditya Birla Fashion and Retail Limited), Landmark group and K Raheja retail have aggressive expansion plans for several brands. Collectively, these retail giants have active space requirements for more than 20 brands across various locations in the city.
Occupancy levels have reached 95 per cent across all major retail corridors, amidst higher demand and tight vacancies over the last 3-6 months, he noted.
Major deal makers
In the last 3-6 months, brands such as Westside, Lalitha Jewellery, Mugdha, Zudio, Max, Croma and GRT struck deals ranging 10,000-20,000 sq ft in the city across locations such as Malkajgiri, Gachibowli, Dilsukhnagar, Begumpet, Madinaguda, Himayat Nagar, Pragathi Nagar, AS Rao Nagar, Ranigunj and Kompally.
Smaller, quick service format, easy pick-up, neighbourhood stores and smaller format in-city warehouses are expanding in Hyderabad at a rapid pace. Modernised, quick service meat providers such as Fipola, Tender Cuts and Licious have expanded. DMart Ready opened several pickup points over the last 6-12 months.
Hyperlocal delivery platforms such as Zepto, Blinkit, Instamart, Ola Dash, Dunzo etc. are opening neighbourhood, inner-city, smaller format warehouses / pick-up points for quicker deliveries.
Veera Babu added, “Upcoming mall supply (about 3 million sq ft over the next two years) will have limited / no impact on high-street retail demand. Given the positioning of upcoming malls, higher penetration of main street retail in underserved, emerging localities, cost arbitrage, brand’s visibility, positioning and customer awareness etc., high street retail will continue to perform well over the next 12-24 months.”
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