Malls might be pulling in the masses but the charm of high streets endures. From Linking Road and Colaba causeway in Mumbai to Khan Market in Delhi and Brigade Road in Bengaluru, every city boasts a high street.
While they’ve settled nicely into malls, international brands haven’t been lucky with good spots on a high street: Zara and H&M are in Connaught Place and Mumbai’s iconic business district, Fort. Vero Moda has a large two-storied outlet on Linking Road, a famous high street in Mumbai. Now American fashion brand, Forever 21 is believed to be scouting for its maiden high street store though this was not confirmed by Aditya Birla Fashion which owns and operates the chain.
In general, high streets are more expensive than malls and it’s hard to find spaces bigger than 20,000 sq ft and sometimes even 15,000 sq ft. But since there’s value in being there, companies continue to look for space. The bigger the space the better the lease rentals, as Pankaj Renjhen, managing director of JLL, India points out. Renjhen adds that given they’re expanding operations; brands are keen to be present on high streets.
Zara is set to pay R2.5 crore per month for its store in the Fort area, which translates into R450 per sq. ft for the 50,000 sq. ft it will occupy. H&M is believed to have paid a similar rate for its Connaught Place outlet. These rates are comparable with ground level rents at Palladium, which are on an average R700–R800 per. sq. ft, according to data sourced from Cushman and Wakefield.
Connaught Place commands average rentals of approximately R950 per sq. ft while stores shell out R1,250 per. sq. ft in Khan Market; that’s almost 50% more expensive than Palladium in Mumbai and Select City in Delhi, the two top malls in the country, according to Cushman and Wakefield. To be sure high streets in India may not quite offer the kind of shopping experience that international high streets offer, as Arvind Singhal, chairman of Technopak points out. That’s partly because often they’re not dedicated shopping zones but located in the midst of homes and a warren of small shops. Narrow streets with no wide pavements and parking zones make it difficult for shoppers to walk around. That’s one reason — some global players have stayed away. According to Cushman and Wakefield, global brands barely occupy a fifth of the space on high streets.
Govind Shrikhande, managing director at Shoppers Stop, which runs a four- storied store on Linking Road for over a decade believes the store experience and brand experience can be better tapped on a high street rather than in a mall.
Much like malls high streets also ask brands for minimum guarantees and revenue share. Rental tenures range between 12 and15 years, at least for the mega brands that are able to negotiate flexible structures for big box formats.