Cushman & Wakefield Research

MARKETBEAT
RETAIL SNAPSHOT
KOLKATA, INDIA
A Cushman & Wakefield Research Publication

Q2 2012

ECONOMY
India's GDP growth slumped to a nineyear low, growing at just 5.3% during the first quarter as against the government forecast of 7.6%. Inflation peaked in May, rising to 7.55% (WPI). Also, the fall in rupee to a record low of INR57.15 against the US dollar has raised import price pressures. A slowdown in the Indian economy, especially against the backdrop of crisis in the European Union led to the Central Bank's decision to cut the repo rate by 50 bps to 8% in April 2012. Meanwhile, Standard & Poor downgraded India's rating from stable to negative in April, followed by Fitch doing the same in June. Considering the current state of the economy, it is expected that the Central Government will bring in some reforms so that the economy regains its stability soon. Stalled and much awaited reforms like FDI in multi-brand retail may come back to the forefront.

ECONOMIC INDICATORS
NATIONAL GDP Growth CPI Growth Private Final Expenditure Growth
Sources: IMF & Government of India

2011 6.5% 8.6% 6.5%

2012F 7.5% 8.2% NA

2013F 8.6% 7.0% NA

PRIME RETAIL RENTS ­ JUNE 2012
MAIN STREETS Park Street Camac Street Elgin Road Theatre Road Gariahat Shyambazar Hatibagan Kankurgachi VIP Road MALLS South Kolkata Salt Lake Rajarhat Elgin Road INR PER SF/MTH 400 400 320 185 160 115 110 140 55 INR PER SF/MTH 315 430 150 600 EURO PER SF/YR 66.8 66.8 53.4 30.9 26.7 19.2 18.4 23.4 9.2 EURO PER SF/YR 52.6 71.8 25.0 100.2 US$ PER SF/YR 84.0 84.0 67.2 38.8 33.6 24.1 23.1 29.4 11.5 US$ PER SF/YR 66.1 90.3 31.5 126.0 Q-O-Q CHANGE 0.0% 25.0% 0.0% 0.0% 6.7% 0.0% 0.0% 0.0% 0.0% Q-O-Q CHANGE 0.0% 2.4% 0.0% 12.6% Y-O-Y CHANGE 63.3% 63.3% 68.4% 5.7% 28.0% 4.5% 22.2% 21.7% 0.0% Y-O-Y CHANGE 0.0% 7.5% 11.1% 12.6%

LACK OF SUPPLY PERSISTS
Kolkata's retail market reflected a sluggish trend with comparatively less leasing transactions than the previous quarter. There was no fresh mall supply and most of the operational malls across the city continued to witness high occupancy without any churn of tenants. However, a major mall in the CBD started renewing its lease arrangements at much higher asking rentals. As the lack of supply persisted, international retailers were seen precommitting in the under construction malls.

PRIME MAIN STREETS CONTINUE TO WITNESS INCREASED ENQUIRIES
Due to lack of mall supply, main streets witnessed increased enquires from major retailers. Particularly, main streets in the Central Business District (CBD) witnessed maximum enquiries from lifestyle and designer wear brands, thus increasing the asking rentals in these locations. However, the continuous upward trend of rental values in these locations have also caused increased churn of retailers in the last two quarters.

Note: Values are quoted on carpet area for ground floor properties of vanilla retailers

SIGNIFICANT LEASING TRANSACTIONS
PROPERTY Standalone Standalone LOCATION Southern Avenue Rashbehari Avenue TENANT Bandhej Turtle SQUARE FEET 2,000 1,100

OUTLOOK
The city is likely to see approximately 350,000 square feet (sf) of fresh mall supply during the second half of the year. As this new supply may not be enough to meet demand, existing malls and main streets will continue to witness appreciating rentals.
PROPERTY Spencer's Galleria Merlin Acropolis LOCATION

SIGNIFICANT PROJECTS UNDER CONSTRUCTION
SQUARE FEET 700,000 300,000 COMPLETION DATE 3Q13 1Q13 Syed Amir Ali Avenue Rajdanga Main Road

Apeejay Business Centre Apeejay House, 8th Floor 15, Park Street,Kolkata-700016 Tel: +91 33 3025 2661 / 3984 5239 www.cushmanwakefield.com

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete. Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals. ©2012 Cushman & Wakefield, Inc. All rights reserved..