Zara Shuts Down South Mumbai Store Due to Exorbitant ₹3 Crore Monthly Rent
Spanish fashion giant Zara has closed its iconic SoBo store in South Mumbai after eight years, citing the exorbitant ₹3 crore monthly rent as a significant factor. The decision has sparked debate on the high real estate prices in Mumbai.
ZaraMumbaiReal EstateRetailSoboReal Estate MumbaiFeb 25, 2025
A notice posted in front of the store went viral on social media, highlighting the brand's struggle with the high rental costs in the city.
The clothing company was reportedly paying ₹3 crore in monthly rent.
According to Business Standard, Zara leased the property for 21 years in 2016 for a monthly payment of ₹2.25 crore.
The rent for the initial five months was free, but upon completing the first three years of the 21-year tenure, the rent increased by 5% per annum.
Calculations put the ongoing rent at ₹3,01,52,152 per month or ₹36,18,25,823 per annum.
The notice outside the Zara store read, “Please be informed that this Zara store will cease operations after the end of business on February 23.
We will continue to assist you at all our Zara stores in Mumbai.” This announcement left social media users in disbelief and sparked a range of reactions.
One individual posted, “Are you kidding me?” Another user commented, “This will be the fate of many quick commerce dark stores after a while.
Even though located in a corner, Mumbai rentals are crazy.” A third commenter added, “As per my understanding, locations like these aren't for making store-level profits; it's more about brand placement.” A fourth user expressed, “Don’t blame the Mumbai real estate.
Blame the companies who agree to pay such ridiculous amounts.” Another wrote, “The place was iconic.
Totally worth it.
Whenever I went, it was full.
Rent wasn't a problem in that location.”
The iconic space will soon house Pernia’s Pop-Up Shop.
The new occupant reportedly wanted a 15-year lease tenure, but the agreement is likely to be in multiples of five years.
This transition reflects the dynamic nature of retail in Mumbai and the challenges faced by brands in maintaining high-street presence amidst soaring real estate costs.
The closure of Zara’s SoBo store is a significant event in Mumbai’s retail landscape, highlighting the ongoing struggle between high rental costs and the profitability of physical stores in prime locations.
As the retail industry continues to evolve, it remains to be seen how other brands will navigate these challenges in the future.
Frequently Asked Questions
Why did Zara close its SoBo store in South Mumbai?
Zara closed its SoBo store in South Mumbai due to the exorbitant ₹3 crore monthly rent, which the store's sales could not sustain.
How long was Zara paying this high rent?
Zara was paying the high rent for about eight years, with the lease agreement starting in 2016.
What was the reaction on social media to the store's closure?
Social media reactions were mixed, with some users expressing disbelief at the high rent, while others commented on the brand's iconic status and the challenges of high real estate prices in Mumbai.
What will happen to the space now?
The space will soon be occupied by Pernia’s Pop-Up Shop, a new retail venture in the area.
How does this closure affect the retail industry in Mumbai?
The closure of Zara's SoBo store highlights the challenges of high real estate costs in Mumbai and the need for brands to find sustainable business models in prime locations.
Related News Articles
Noida Authority Announces Additional Waivers for Real Estate Developers
Noida Authority takes steps to offer interest waivers to realtors affected by NGT orders, providing additional relief to builders affected by the pandemic
Why This Rs 120 Crore Triplex Penthouse in Mumbai is Beyond the Reach of Even the Super-Rich
Mumbai's real estate market is known for its sky-high prices, but this triplex penthouse takes the cake. Despite the city's allure, this luxurious property is a testament to the exclusivity and staggering costs that define the elite housing segment. Mumba
Odisha to Simplify Real Estate Laws for Streamlined Sale Deed Registration
Real estate expert Bimalendu Pradhan highlights that many apartments in the city lack the necessary occupancy certificate, which can complicate the sale deed registration process. Odisha is taking steps to amend these laws to make the process smoother for
Arnya, Led by Ex-Motilal Executive, Hits Midpoint for First Fund
Arnya, a real estate-focused investment firm headed by a former Motilal Oswal executive, has successfully crossed the halfway mark for its maiden fund within a few months of its launch. The Mumbai-based firm is set to roll out a debt investment vehicle in
The Indian Diaspora: Remittances, Costs, and Future Trends
Indian emigrants come from various regions and mainly follow Hinduism, although regional migration patterns vary, leading to a significant presence of Tamils in certain areas. This article explores the impact of remittances, associated costs, and future t
ED Nabs WTC Group Promoter Ashish Bhalla in Rs. 3000 Crore Real Estate Fraud
The Enforcement Directorate (ED) has arrested Ashish Bhalla, the promoter of WTC Group, in connection with a real estate fraud case amounting to Rs. 3,500 crore. The arrest comes as a significant step in the ongoing investigation into the misuse of funds