Abnormal rent leaves commercial spaces vacant on MG Road

Not withstanding the business boom in the major cities of Andhra Pradesh post bifurcation, many shops in commercial complexes on Mahatma Gandhi Road have been left vacant. To-let boards in front of several posh commercial complexes on one of the major arteries of the city have reflected the strange phenomenon.

Generally, commercial space is left unoccupied when the supply exceeds the demand. It is not the case with the present scenario as there is a heavy demand for commercial spaces in the city. Every square foot is worth thousands of Rupees for realtors and property owners.

Realising its business potential, many national and international food chains, top consumer brands and industrialists are evincing interest in setting up their ventures in the metropolis of Andhra Pradesh. Vacant commercial space in Moghalrajpuram, Suryaraopet, Governorpet, Gandhinagar and other popular localities are somehow attracting tenants.

There are also takers for shops on Karl Marx Road, another major artery in the city. The lack of adequate demand for commercial space on the busy MG Road is largely attributed to the abnormal rent. What matters most for any businessman is establishment cost. Huge establishment costs make a dent in profits.

Businesses cannot flourish if the establishment costs are high due to abnormal rent. Hence, most of businessmen are hesitating to set up showrooms on MG Road by taking shops at a high rent. On the other hand, realtors and property owners are reluctant to give their commercial spaces on lease if the rent is less than expected.

They are ready to leave their commercial space unoccupied instead of leasing them out for a lesser price. This may be one of the reasons for large number of vacant shops in commercial complexes on MG Road. Expressing his viewpoint on the strange phenomenon, Greater Vijayawada Builders Association former general secretary Vemuri Subba Rao said, The shop rent on MG Road has gone up abnormally post bifurcation.

Realtors and property owners are demanding a monthly rent of Rs 45,000 per month for a shop of an average size. Earlier, the shop rent ranged from Rs 15,000 to Rs 25,000 only. The rental amount per square foot of commercial space on MG Road ranges from Rs 50 to Rs 90 per month which is more than that of busy areas in posh Banjara Hills of Hyderabad. Even residential spaces are costing a bomb in areas adjacent to MG Road. Shop rents should be more competitive to ensure the business growth of the city.''