Around 5 BKC restaurants shut before lockdown, 5 more plan to vacate premises
MUMBAI: Over the past five years, the Bandra-Kurla Complex (BKC) with its glass-and-steel towers has emerged as a premium food and beverages (F&B) destination with some of the highest lease rentals in the city. Over 50 upscale, fine dining restaurants, bars and cafes proliferated and thrived as corporate houses, multinationals and foreign banks moved their offices to this commercial business district.
The lockdown, though, has affected business plans and upset the applecart of several restaurateurs, now unable to sustain the rentals of Rs 450 to Rs 550 a square foot (carpet) a month.
Property market sources said a few restaurants in BKC had put up the shutters even before the lockdown began in March. The Derby Restobar in The Capital tower, Cardboard Cafe and Illuminati in Adani Inspire, and Hello Guppy in Godrej building were among those that closed in the past few months.
“About four to five restaurants had already closed before the lockdown and another five are planning to vacate the premises in BKC,” said Shubranshu Pani, MD, retail, JLL India. “The pandemic has made business more difficult. Footfalls will not increase in the next two to three quarters. There could be 50% occupancy by the end of the year.”
What makes BKC the most expensive real estate in the city for the F&B industry are the large spaces available for restaurants and bars to occupy. The average size of a restaurant in BKC is between 2,500 sq ft and 3,000 sq ft. The larger ones such as Yauatcha, Cin Cin and Nara, run by Kishor Bajaj of K A Hospitality in Raheja Tower, together occupy 30,000 sq ft space. The average monthly rent of a restaurant in BKC is in the range of Rs 12 lakh to Rs 17 lakh, depending on the space occupied.
Restaurateur A D Singh, who has a presence in BKC with his largest brand, SodaBottleOpenerWala in The Capital building, said that rents are now expected to drop by at least 30%. “It is difficult to sustain at the current level as restaurants are bleeding. Fortunately, landlords are sympathetic and understand the situation. They are working out better rates and deals will be renegotiated,” Singh told TOI.
A month before the lockdown, Singh permanently shut his Japanese diner, Hello Guppy, in Godrej building. “BKC was flooded with new restaurants in the past two to three years. Supply has outstripped demand and rental rates are high,” he said.
Bharat Maheshwari, local director, retail services, JLL India, said the F&B market in BKC was doing “pretty well” till the pandemic struck. “With four lakh people coming to BKC every day, an average restaurant occupying 2,500 sq ft space did monthly sale of Rs 65 lakh to Rs 75 lakh,” he said.
Jay Yousuf, co-founder of The Table, a fine dining restaurant in Colaba, said restaurateurs have been struggling not just in BKC, but everywhere. “Business had already dropped by 50% in early March before the lockdown was announced,” he said. “Landlords are not being flexible. Many tenants will cut their losses and move on. The big ones will sweat it out and face the challenge,” he said.
Market watchers said renegotiated deals may now include a revenue-sharing model instead of a fixed rent. Some such as Capital Social in The Capital building have successfully negotiated for a 100% rent waiver during the lockdown, revenue sharing and part-rental till March 2021 and normal rent if sales reach 90%.
SodaBottleOpenerWala has asked its landlord (The Capital) for a revenue-share model till March 2021. Theobrama has successfully renegotiated a 50% waiver from March to August or till the end of lockdown. O Pedro in One Godrej has asked the landlord to waive off rent during the lockdown and post that, a revenue sharing of 13% to 15% till March 2021. Industry sources said several restaurants are now focusing with great zeal on takeout and home delivery.