The number of permanent store closures on the stretch is a stark reminder of the pandemic’s impact on the city’s retail sector, from major brands to smaller shops.

A look at the former location of Archie's on Brigade Road in June 2021
news Real estate Wednesday, June 16, 2021 - 18:59

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The signs have been ripped down, the lights turned off, and shirts, shoes and watches packed away. Storefront windows, where mannequins and discount boards were once displayed, now hold stacks of cardboard boxes. Some announced their departure, like the Raymond store that’s “sorry for inconvenience caused,” while others that have inhabited the street for years vacate without a whisper. As we travel down Bengaluru’s Brigade Road, it appears much like the rest of the city under lockdown. But the number of permanent store closures on the stretch is a stark reminder of the pandemic’s impact on the city’s retail sector, from major brands such as Dunkin Donuts and Florsheim, to smaller shops once integral to the Central Business District’s busy shopping area.

Industry experts who have closely monitored the CBD’s real estate and retail industries say the effect of subsequent lockdowns on the area has been significant. Suhail Yusuf, of the Brigades' Shops and Establishments' Association, says that about 30 shops on Brigade Road have closed in the last year due to a lack of business and the inability to maintain high rents in the commercial district. What’s more, there is little to no interest in entering these spaces at the moment either.

“Nobody will want to stab themselves knowing very well that business is not to those levels. No one will want to invest in that. It’s only a losing prospect,” he says. “It is going to take quite some time for businesses to pick up. So far, the second wave is looking like it is worse.” 

On Church Street, where the Smart City construction was completed last year, about 15 businesses closed down during the first wave, out of an estimated 70 to 80 businesses, says Irfan Noor, secretary of the Church Street Occupants Association. Between December and March, Church Street saw nearly pre-pandemic crowds gathering for its weekend street fairs that allowed artists, performers and vendors to set up shop along the stretch. But one of the biggest reasons for closures is the lack of rent relaxation, Irfan explains. Noting there is no particular rule for rent relaxation, Irfan says it depends on how understanding the landlord is. While some were willing to compromise and offer concessions, others would not budge. 


A former retail location for Arrow on Brigade Road


The former location of Pantaloons on MG Road

“When we don’t have customers coming in, how do we pay money? Almost 90% of stores are on rent. If the landlord doesn’t agree, they leave. Especially larger companies don’t bother — they leave if they don’t get rent relaxations. That’s how stores close down,” Irfan says.

Looking at MG Road, the biggest casualty from a retail perspective is the Pantaloons location, a once-sprawling multi-story shop that teemed with shoppers on better days. Bhoopalam Srinath, president of Bangalore Traders' Association, notes that though there was some recovery after the first wave, the last few months have obliterated those gains. 

“After things started being relaxed around May last year, it took some time for things to return to normal. Things were picking up by October, until January, and then the same thing happened,” says Irfan.

Experts note that the effects have been seen across the city and at various levels of retail business, particularly on newcomers who are unable to financially sustain themselves. Perikal M Sundar, president of the Federation of Karnataka Chambers of Commerce and Industry, says that in retail, nearly Rs 75,000 crore in Karnataka is the estimated loss for the business community. In Bengaluru, he says the maximum impact is being felt by the textile, garments, automobile and hospitality industries.

“Maybe 20-30% of trade will close this time and 15-20% of industry will close down because their financial support is not very good, and since more waves are expected,” he says. Along with the CBD, older parts of the city are seeing the maximum impact, including Mamulpet, Chickpet, SP Road, NR Road and JC road, he adds. 

In terms of business recovery, he estimates that 50% recovery may come this year, but to return to a pre-pandemic level, it will take at least two years.


Boxes piled in the storefront at Mota Royal Arcade 


The former location of Dunkin Donuts


A shuttered Raymond location on Brigade Road

According to property consultant Greg Pacheco, commercial office rentals have dropped by about 30% since more and more people are working from home. Retail, too, has seen few interested parties in recent months. 

“If you look at the availability on Brigade Road and Commercial Street, even though the rentals have dropped drastically, there haven’t been any takers. Nobody really sees any sense in opening up a new store. No one is sure of what is going to happen with the lockdowns,” he says. 

But Pacheco notes that CBD still has an appeal that areas like Koramangala, Indiranagar and HSR, which have also been hit badly, may lack. “I think a lot of F&B players are looking at coming back into the CBD because it’s been better than being in Indiranagar or Koramangala.”

Rents on Brigade Road are around Rs 200 to 350 per square feet, though some landlords are urging tenants to stay through short-term rent reductions, Pacheco says. Some landlords are also agreeing to lockdown clauses — for example, during lockdowns, there won’t be rent owed or there will be a drop of 30% to 40% till the market picks up again. And though a number of major brands have shut shop on Brigade Road, Pacheco believes those that can sustain will definitely be able to capitalise on the market today. And while landlords may not agree to long term leases, there is scope for nine-year leases to be broken into 3+3+3, where there is scope for renegotiation following the fourth year. 


A to-let sign over the Zimson shop on Brigade Road


An empty Indian Terrain location on Brigade Road


A garment shop that's been cleared out

“The second wave has really been a big blow and with people expecting a third wave to come in, I think landlords have definitely realised that they need to give out their spaces to at least get some minimal rental at least to pay building maintenance charges etc,” Pacheco says.

People are also trading in bigger spaces of 4000 sq ft for smaller ones, and many are also looking at getting short term leases. The lack of large spaces in the CBD will also be a deterrent for some bigger shops. Shops looking for 15,000 to 20,000 sq ft are not going to pay more than Rs 100 per sq ft but it’s still around Rs 200 to 250 in areas like Lavelle Road, Kasturba Road, Museum Road, where they don’t mind holding on.



A former location of the Florsheim shoe shop

But there is still optimism that the areas will see improvement in the coming months. Suhail notes that a big advantage for Brigade Road is the completion of its revamp, with newly-laid roads and footpaths. Last year, the post-first wave recovery had been heavily impacted by road works and Metro construction, he says. 

“There is some optimism. Everyone knows that this year is literally wiped out and everyone understands that. Going forward things are going to come back and India is very resilient that way,” Pacheco says.

This story is a part of the TNM COVID-19 reporting project. To support this project, make a payment here.

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