Apple to open third India retail store at Bengaluru's Phoenix Mall

Business Standard

4 days ago

Apple India has zeroed in on Bengaluru for opening its third retail outlet after Mumbai and Delhi, which were opened in 2023. For the third outlet, the iPhone maker has leased 8,000 square feet (sq ft) of retail space in Bengaluru's Phoenix Mall of Asia, which will be smaller than its first flagship store spanning more than 20,800 st ft in Jio Mall in Bandra Kurla Complex, Mumbai. However, it will be as large as Apple's second outlet in Select Citywalk Mall in Delhi's Saket.
According to lease-related documents from real estate data analytics firm Propstack, Apple India will be paying an annual rent of ₹2.09 crore for the Bengaluru retail store, which translates to a monthly rent of ₹17.4 lakh. Along with the rent, Apple will also pay 2 per cent of its revenue for the first three years of the lease tenure and 2.5 per cent thereafter to the landlord.
However, the lease deal has a rent cap where the revenue share payment does not exceed a value that is twice the value of the applicable yearly minimum guaranteed rent for the year. The carpet area of the space is 7,997.80 sq ft. The company has also paid a deposit of ₹1.046 crore. The rent and the security deposit both will escalate by 15 per cent after every three years.
Apple's retail expansion is part of its goal of adding four more stores in India that has been outlined by Apple chief executive officer (CEO) Tim Cook.
"In retail, in addition to the two stores we opened during the quarter, we're also looking forward to a new retail store in the UAE, the arrival of the online store in Saudi Arabia, and new retail stores in India starting later this year,' Cook said in the latest quarter earnings call earlier this month.
The move comes at a time when the American multinational technology giant is shifting iPhone manufacturing from China to India to not only tap into India's growing smartphone market but also to export from the country to the US, amid tariff changes by the US government and despite pressures to manufacture in its home country. US President Donald Trump had warned Apple of a 25 per cent tariff on iPhones sold in the US if they're not manufactured domestically.
Apple's own retail stores are part of its broader strategy in India where it began manufacturing iPhones in 2017, and has since begun making the latest models, including the iPhone 16 Pro and iPhone 16 Pro Max, domestically. According to a recent Bloomberg report, Apple is planning to double iPhone production in India to 80 million units to meet the demand of 60 million iPhones to be sold in the US by 2026. The company intends to raise the levels of exports to select countries worldwide.
Cook has noted that most US-bound iPhones during the June quarter will be manufactured in India. 'For the June quarter, we do expect the majority of iPhones sold in the US will have India as their country of origin,' he had said in the earnings call.
For its Mumbai retail space of 20,806 sq ft, Apple had signed an 11-year lease agreement with an annual rent of ₹5.04 crore (₹42 lakh per month) along with a 2 per cent revenue share for the first three years and 2.5 per cent thereafter. The rent would escalate by 15 per cent after every three years.
In Delhi's Saket space of 8,400 sq ft, the company leased the space for 10 years at an annual rent of ₹4.8 crore (₹40 lakh per month) with a rent escalation of 15 per cent after every three years, but no revenue share component.
Apple has leased the Bengaluru space from landlord Sparkle One Mall Developers, a subsidiary of Island Star Mall Developers, which is a 51:49 joint venture of Phoenix Mills – India's largest retail-led mixed-use developer – and Canada Pension Plan Investment Board (CPPIB), a global investment management organisation.
The lease period has commenced from November 8, 2024, while the rent commencement date is August 8, 2025. The leased space is situated on the first floor of the mall, from the unit numbers F-39 to F-43. Phoenix Mall of Asia is spread over 13 acres of land in Hebbal, Bengaluru, with 1.20 million square feet (msf) of retail space.
According to the lease terms, Apple has provided the lessor with a list of companies that compete with its business through a letter. The lessor cannot give on lease any such company that competes with or offers products or services that compete with Apple, to use, possess, or occupy any space, including but not limited to for setting up of retail stores for retailing advertising, selling offering displaying and merchandising their products and services within the exclusivity zone of the mall.
Additionally, Phoenix Mill's retail portfolio consists of 12 malls across eight Indian cities, with 11.5 msf of operational retail development and 5 msf under construction and planning.