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Q2 2013 MUMBAI, INDIA

RETAIL SNAPSHOT

MARKETBEAT

A Cushman & Wakefield Research Publication

ECONOMY India’s GDP growth for the first quarter of 2013 was recorded at 4.8%, slightly better than the 4.5% recorded in the fourth quarter of 2012. HSBC India’s Composite Output Purchasing Managers’ Index was recorded at

52.0 for the second quarter of 2013, slightly lower than the previous quarter’s 53.0-54.0. The Indian Rupee depreciated to a record closing low of INR60.7 against the US Dollar in June 2013. The Consumer Price Index decreased from 10.91% in February 2013 to 9.31% in May 2013. The Reserve Bank of India reduced the repo rate by 25 basis points to 7.25% in the second quarter of 2013. Until April 2013, retail proposals of about INR8.6 billion were cleared for international single-brand retail companies like Decathalon, Pavers, Fossil and Promod. The government is considering a proposal to allow the usage of multiple trademarks by international companies that come through the single-brand window. This move will aid the entry and expansion of brands like H&M, Marks & Spencer, Zara and Massimo Dutti, to name a few.

NEW MALL SUPPLY IN THANE A mall measuring 940,000 square feet (sf) became operational in Thane during this quarter, with almost 98.0% of the space being leased out to brands such as Marks & Spencer, Zara, Lifestyle and Shoppers’ Stop . Additionally, due to a stable demand, the overall mall vacancy in Mumbai declined marginally to 15.1% at the end of the second quarter.

Low availability in the wake of a healthy demand has led to an increase in mall rentals in Lower Parel and Vashi. While the mall rentals at Vashi have appreciated by 17.6% quarter-on-quarter, rents at Lower Parel increased marginally by 4.0%. Limited churn, despite a low availability of quality spaces, have resulted in stable rentals across all other mall locations in the city.

STABLE MAIN STREET RENTALS Enquiries for main street locations like Colaba and Borivali LT Road remained active during the quarter, especially from the food & beverage (F&B) segment. The F&B sector has witnessed phenomenal growth in the city and certain high-end brands are looking to expand their presence in Bandra-Kurla Complex. Limited transaction activities have resulted in stable rentals across all main streets, except Lokhandwala Andheri where rentals appreciated marginally by 3.0% quarter-on-quarter due to high demand.

OUTLOOK Mall rentals at Lower Parel are expected to increase further in the upcoming quarter due to low vacancy levels and a healthy demand. Main street rentals on Linking Road are under pressure due to

higher availabilities, while rents in Borivali and Vashi could appreciate due to the increased demand from retailers for these suburban locations.

ECONOMIC INDICATORS

NATIONAL 2012 2013F 2014F

GDP Growth 5.0% 5.4% 6.4%

CPI Growth 9.3% - - Private Final Expenditure Growth 4.2% 8.3% 7.2%

Govt. Final Expenditure Growth 5.1% 3.8% 4.7%

Source: Roubini Global Economics & MOSPI

PRIME RETAIL RENTS – JUNE 2013 MAIN STREETS INR

SF/MTH EURO SF/YR

US$ SF/YR

Q-O-Q CHANGE

Y-O-Y CHANGE

Linking Road 750 116 152 0.0% -11.8%

Kemps Corner / Breach Candy

440 68 89 0.0% 0.0%

Colaba Causeway 700 108 142 0.0% 0.0%

Lokhandwala Andheri

320 49 65 3.2% 6.7%

Fort Fountain 350 54 71 0.0% 0.0%

Vashi 240 37 49 0.0% 0.0%

Thane 260 40 53 0.0% 0.0%

Borivali LT Road* 370 57 75 0.0% NA

MALLS INR SF/MTH

EURO SF/YR

US$ SF/YR

Q-O-Q CHANGE

Y-O-Y CHANGE

Lower Parel 500 77 101 4.2% 4.2%

Malad 460 71 93 0.0% 0.0%

Link road (Andheri W)

400 62 81 0.0% 0.0%

Mulund 275 42 56 0.0% 0.0%

Goregaon 300 46 61 0.0% 0.0%

Vashi 300 46 61 17.6% 33.3%

Ghatkopar 320 49 65 0.0% 6.7%

Thane 280 43 57 0.0% 0.0%

Note: Asking rents(INR/sf/month) on carpet area of ground floor Vanilla stores is quoted Conversion Rate: US$1= INR 59.27 and Euro 1 = INR 77.7

*Newly Added in 2013

SIGNIFICANT LEASING TRANSACTIONS

PROPERTY LOCATION TENANT SQUARE FEET

Standalone Borivali L.T. Road Tribhovandas Bhimji Zaveri

15,000

Standalone Powai Häagen-Dazs 1,500