Rising shop rents on Mumbai's Colaba Causeway, a vibrant high street and the city's main tourist drag, are proving to be a headache for retailers.
Rents on the high street in south Mumbai rose faster than any of the world's main shopping districts, including New York's Times Square and Garcia D'Avila in Rio de Janeiro, growing by 75 per cent in the year to June, according to a report by Cushman & Wakefield.
"It has gone up a lot," said Vikram Singh, the manager of S Bellissimo, an upmarket shop that sells Indian ornaments on Colaba. "It's very difficult because not as many clients are coming and their buying power has decreased. Indians don't want to spend and the European market is not so good."
The bustling high street features a mix of international names including United Colors of Benetton, Nike and Levi's, alongside local brands and family-run businesses, as well as a multitude of street stalls selling clothes and souvenirs.
Still, rents on Colaba are lower than many other shopping districts globally at US$150 (Dh551) per square foot, compared with $1,100 per sq ft on Madison Avenue in New York and $634 per sq ft in Shibuya, Tokyo.
Prime rents in India rose by 12.5 per cent on the back of strong occupier demand across all sub-sectors. However, retailers were increasingly favouring high street properties at the expense of shopping centres, exemplified by the 75 per cent rise on Colaba, the report stated.
Jaideep Wahi, the director of retail services at Cushman & Wakefield in India, explained that the area's prime location and competition for quality retail space was driving the growth.
"There are limited options for retailers in terms of quality retail real estate in Mumbai," said Mr Wahi. "So what's happening is there would obviously be upward pressure on rentals in these spaces as demand comes in.
"Retailers want to fish where the fish are. It's as simple as that."
For Brian D'Souza, the manager of Raymond Made-To-Measure, a luxury suit shop that opened this month on Colaba, rising rents are a challenge.
"This year I'm paying three lakhs [Dh19,900] a month, but in the same months next year I could be paying five or six lakhs," he said. "That's putting a lot of pressure on retailers."
But the location was important, he added, explaining that Raymond had a shop on Colaba previously, but left that spot, and then it took the company three years to secure another store space on the high street. "All the brands that come to India would like to be here," said Mr D'Souza. "And the local brands are fighting among themselves to get space."
In Mumbai as a whole, retail rental rates have broadly remained flat, say analysts.
"Over the past month, the demand in Mumbai's retail market has remained stable, with tenants cautious about real estate costs," said Anuj Puri, the chairman and country head for Jones Lang LaSalle India.
"Most of the leasing activity is currently on high streets - Linking Road, Colaba and Breach Candy - with leasing in malls remaining moderate."
Lalit Bhataji, who owns a sari shop on the high street on Colaba, says he is fortunate that the shop has been in the family for 40 years because competition for property and high rents would otherwise make it difficult for his small business to have a place in the area.
"If we left this area, I don't think in future we would be able to come back."