Last Updated:
Bengaluru’s Indiranagar sees the strongest rental growth market in APAC
Khan Market retains its position on the prestigious global list and continues to be India’s most expensive high street. (Representative image)
Delhi’s Khan Market has once again solidified its status as a retail hotspot, ranking as the 22nd most expensive mainstreet globally in Cushman & Wakefield’s Main Streets Across the World report.
With rents at USD 229 per square foot annually (sf/annum) (~ Rs 19,330), Khan Market retains its position on the prestigious global list and continues to be India’s most expensive high street, registering a 7% year-on-year rental growth.
In its 34th edition, the report focuses on headline rents in 138 best-in-class urban retail locations across the globe, many of which are linked to the luxury sector, utilising Cushman & Wakefield’s proprietary data. The global index ranks the most expensive destination in each market.
Global Retail Market Overview
According to the report, Milan’s Via Montenapoleone, where rents have risen by nearly a third in the past two years, has overtaken New York’s Upper 5th Avenue to be crowned the world’s most expensive retail destination. It is the first time a European street has topped the global rankings in the firm’s flagship retail report.
Khan Market: A Retained High-End Status
Saurabh Shatdal, MD, capital markets and head-retail-India, Cushman & Wakefield, said, “Khan Market’s position among the world’s top retail destinations underscores the resilience and strength of India’s retail sector. Known for its curated mix of premium brands and upscale boutiques, Khan Market attracts affluent shoppers, solidifying its reputation as a high-end retail hotspot. The limited availability of retail space in the area creates intense competition, pushing rental values higher. With malls facing supply constraints, main streets across India are thriving, driven by robust demand and strong rental growth. As of YTD 2024, main streets have recorded leasing of 3.8 msf, marking a 11% year-on-year growth.”
Asia Pacific Ranking by Market 2024
In the Asia-Pacific retail landscape, Delhi’s Khan Market climbed from 24th to 23rd position among the region’s most expensive high streets, surpassing notable locations like Bangkok’s Central Retail District, Jakarta’s Prime Main Street, and Bonifacio in Manila.
Interestingly, Delhi-NCR now hosts India’s top three most expensive retail high streets.
Alongside Khan Market, Connaught Place (Delhi) and Galleria Market (Gurgaon) also feature prominently in the APAC rankings, with rentals of USD 158 (INR 13,335) and USD 156 (INR 13,166) per square foot annually, respectively. Limited space addition has made these areas highly competitive and consequently more costly for brands seeking prime retail locations.
Macroeconomic Impact and Growth in India
Rents closely reflected wider macroeconomic performance within the region. India has been the strongest major economy in the world this year, and Indiranagar 100 Feet Road in Bengaluru leads the region’s rental growth at 32% YOY. Rental growth across 16 tracked Indian locations averaged a 9% increase YOY, with notable growth recorded in locations like Pune’s MG Road, Fort/Fountain in Mumbai, and Park Street in Kolkata.
Conversely, Chennai’s Anna Nagar and Pondy Bazaar remain some of the region’s most affordable high streets, with rentals between USD 25-26 per square foot annually.
Main Streets Across the World – Global Ranking by Market 2024
Competitive tension for limited space saw YOY rental growth recorded in 57% (79) of the 138 locations tracked, declines in just 14% (19), with the remainder 29% (40) flat. This resulted in a global average rental increase of 4.4%. The Americas was the strongest performer regionally at 8.5%, driven by rental growth of almost 11% in the U.S. – more than double the 5.2% recorded last year – followed by Europe and Asia Pacific at 3.5% and 3.1% respectively. Rents across the 138 locations are now on average nearly 6% above pre-pandemic levels.
Global Outlook
Prime retail destinations have mostly successfully weathered the storm precipitated by interest rate hikes to curb inflation in 2022 and 2023, which led to a rapid increase in the cost of living, weak consumer sentiment and sluggish economic growth. Retail now stands to benefit from the gathering pace of interest rate cuts, economic recovery, easing cost of living pressures, and real wage increases.
Shatdal added, “Globally, super-prime physical retail spaces remain central to retailers’ strategies, highlighting the enduring importance of vibrant shopping destinations like Khan Market. With India’s robust economic growth and evolving consumer preferences, the country’s retail sector is poised for sustained success.”
Future Projections for Retail Destinations
Report author Dr. Dominic Brown, Cushman & Wakefield’s head of international research, said, “Increased discretionary spending among consumers will further boost the performance of prime retail destinations. How quickly and strongly that feeds through into rental growth at a market level will vary due to local nuances and market dynamics. Growth at a global and regional level was led by the U.S. this year, but every region had really strong double-digit growth in certain markets – truly exceptional in some cases – and others where rents have slipped for one reason or another. However, performance at the very top end underlines that the strength of ‘prime’ continues to rise and we expect that to continue as conditions improve.”
