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It has been a rewarding holiday season for Indian retailers. With more brands likely to drive offline presence now, the Indian consumer can look forward to more outlets. But interestingly, as these expansion plans take shape, it is not the shopping malls but the main streets that are in high demand.

This is also reflected in rental trends. According to Cushman and Wakefield, Mumbai saw rents correct between 2 and 5 percent as recently as the third quarter, with the scope of an increase expected to be only by the end of 2022.

Meanwhile, Bengaluru and Chennai saw rental rates remain stable. However, Delhi and Hyderabad have managed to counter the trend. While Khan Market and Connaught Place saw rents rise by 11-17 percent, Hyderabad’s Jubilee Hills and Punjagutta saw rents rise 4-6 percent.

By the way, all the localities that have seen an increase in rental value like Connaught Place in Delhi or Indiranagar in Bengaluru and Jubilee Hills in Hyderabad are retail outlets. But that doesn’t stop malls from hiking rentals. For example, InOrbit said it expects its rents to increase by 15 to 18 percent, as rents in shopping centers exceed 2019 levels.

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But for many shopping center owners and developers, raising rental rates at this time can be a bit risky, and not all shopping centers will be able to require an upward revision. Retailers also believe that the long-lasting impact of the closure has sensitized shopping center owners and developers to exercise caution.

The recovery may be slow but steady, but the threat of future waves leading to more lockdowns cannot be completely ruled out, and that will always be a sword of Damocles looming over the mall owner and retailer. Additionally, experts believe that given the nuances involved in how retail brands may choose to do business in the future, malls may choose to put off hiking rentals, even if only for the time being.

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