A turnaround of realty trends may have been seen from last quarter onwards. But, it was only a revival of real estate prices not their rental values. Real estate consultants and analysts believe that if retail spaces show sustained growth for a considerable span, it may soon witness upward movement.
Leading retail stores have confirmed that they have not received any request to re-negotiate rentals at their existing properties though new properties will command higher rentals. The hike in rent would depend on various factors including the capital value of the property as realtors now-a-days are using serious scientific methods to get the right mix of retailers in their malls.
From property developers to mall owners to retailers, everyone is adopting a cautious approach to avoid hassles in future. They prefer the revenue-sharing model so that both developers and tenants remain committed to the property and its upkeep. Cushman and Wakefield (C & W), a leading real estate broker and consultant said that retail segment has just started picking up. So, retail segment needs to witness a sustained growth consistently for months before mall developers decide to re-negotiate the rentals. Mall developing biggies like DLF have now decided to bring the upcoming and existing retailers to the same level by gradually withdrawing the discounts extended to old occupants during recession.
Retail market has revived and even retailers seem ready to pay higher rents and are open to negotiations. Rajeev Talwar, DLF Executive Director explained that they are now looking forward to negotiate rents as they had earlier taken a soft stand during economic meltdown. Some experts feel that rentals may remain flat in the short term but will recover in the long run. With the growing supply of rentals, it is difficult to achieve the rental levels of peak times.
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