An estimated 230 malls to come up by 2006
THE emerging concept of malls in India has revolutionised the designs of the Indian shopping mart and transformed the people’s lifestyle. The establishment of a mall with its large-format stores, has an immediate impact on the neighbourhood, the community and on the whole town.
Mall development has attracted many real estate developers. From just three malls in 2000, India is all set to have over 230 malls, and quality retail real estate space of over 400 lakh sq.ft. by 2006. The area of a single Indian mall, ranges anywhere between 80,000 sq.ft. and five lakh sq.ft. Although the primary purpose of a mall is to cater to the retail requirements of its clientele, entertainment-related components are also being added to provide a complete shopping-and-entertainment experience.
The Indian market is still in the process of establishing parameters, classifications, and evolving a home-grown model of a mall. Besides the two major shopping centre formats i.e, Malls and Family Entertainment Centres based on tenant mix, Hybrid is another emerging form.
While Family Entertainment Centres usually have large entertainment component (multiplex, bowling alleys and other games, etc.), a number of food courts, and a percentage of space devoted to retail, a Hybrid Centre is a combination of large anchor tenants and retail space sprinkled around a large open plaza.
In the last of the series on the property article, we are presenting the market place opportunities in A, B and C categories, where category A covers Metros, B the mini Metros and C the Cities.
‘A’ category cities: The Metros
The cities included in A category are the metro cities of Chennai, New Delhi, Kolkata and Mumbai.
Chennai Chennai, the capital of Tamil Nadu, has some of the most successful and trend-setting retailers in different sectors. The city is fast shedding its image of a conservative market, and adapting departmental stores formats like Lifestyle, Globus, Westside and Shoppers’ Stop, thus, popularising the idea of destination shopping. Chennai houses India’s first retail mall, Spencer Plaza, that ushered in the first organised mega-format for retailing. Abirami Mall, a four-screen multiplex and a 50,000 sq. ft. retail complex, is a recent addition. The total real-estate by 2005 is estimated at 12 lakh sq.ft., with an average rentals in the range of Rs 65 to 100 per sq.ft.
Prime retail areas: Shopping space in the city falls into two categories, City and Suburbs. The City include T. Nagar, Anna Salai, Nungambakkam High Road, Egmore, Cathedral Road, Radhakrishnan Salai and Parrys Corner, whereas the Suburbs include Adyar, Anna Nagar and Purasawakkam. Retail hubs towards the west and south of the city are also fast developing.
Commercial properties: Capital values for commercial properties are between Rs.2,200 to Rs.3,300 per sq. ft. in areas such as Mount Road, Nungambakkarn and Cathedral Road. Chennai has seen an increase in retailing activity with many retail chains including Shopper’s Stop establishing a presence in the city. Retailing and software companies provided the required impetus to the leasing market as many companies preferred Chennai over other southern cities.
Existing malls: RPG has come up with a mega mall called Spencer Plaza, developed in 1999, an office-cum-retail complex with over five lakh sq.ft. of qualitative retail space and demonstrated success in its three models of retailing in Foodworld, Health and Glow, and Music World. The mall, which is very different from the traditional street-facing, ground floor shopping complexes, has made multi-level shopping possible.
After Spencer Plaza, there is Ishpani Centre operational since 2001. Besides this there are many stand-alone malls, such as Lifestyle, Globus, and Shoppers Stop. A leading multiplex operator from Mumbai has also signed up for space in the mall. The concept of stand-alone mall is not new to Chennaite. Higginbothams, which is one of the oldest retail book outlets in Chennai, stands tall despite competition from new and modern outlets.
Mayajaal a subsidiary company of PentaMedia Graphics Ltd., a pioneer in the animation/multimedia and film effects industry, brings to Chennai the 70-acre mega entertainment venture focusing on complete family entertainment, located at Kanthur.
Upcoming malls: Spencer Plaza, (50,000 sq. ft.); ETA Mall; RK Salai, (four lakh sq. ft.); Abhirami Mall, (1.5 lakh sq.ft.).
Key brands: Large multinational brands, such as Reebok, Pizza Hut, Domino's Pizza and Natalia, are actively looking at Chennai as a prospective market and are either establishing base here or are consolidating their position in the market by opening more outlets.
One of the fastest growing cities and an important business hub, New Delhi is ranked as the second-largest market in terms of size (873.95 billion) and economic profile. Dominated by the business community, bureaucrats and politicians with huge disposable incomes, Delhi is witnessing an exponential growth of malls, shopping complexes, multiplexes and family entertainment centres. The key locations in the National Capital Region (NCR) comprise Delhi state and suburban satellite towns Noida, Greater Noida, Faridabad, and Ghaziabad. Gurgaon, has been the forerunner in the development, attracting a number of multinational companies in the service sector followed by Noida and Faridabad.
NCR’s first mall, Ansal Plaza, was fully operational in the year 2000, with Shopper’s Stop as anchor tenant. The past couple of years have seen a splurge in the number of retail malls in the suburban location of Gurgaon, closely followed by Noida. The market acceptability and success of these developments have spurred a number of mall-related developments in Delhi as well.
Out of the total of over 104.6 lakh sq.ft. of space to be available by 2005 in the NCR, Gurgaon has the lion’s share of almost 40 per cent. The location offers a good demographic mix, with large segment of middle and upper-middle class, together with an ever-increasing influx of population owing to a number of multinational companies preferring to locate in Gurgaon.
Overall, the NCR retail market is growing at a rapid pace, with the suburban locations taking the lead. However, oversupply in the market and under-provided infrastructure remain key concerns.
The total real-estate estimated till 2005 for the NCR is 104.6 lakh sq.ft., with an average rentals of Rs. 12 to 140 per sq.ft. in Delhi and Rs 40 to 120 per sq.ft. in Gurgaon and Noida.
Prime retail areas: Markets can be classified into traditional, contemporary and emerging markets.
Traditional markets include old markets of Delhi, like Chandini Chowk, Sadar Bazaar and Daryaganj. Contemporary markets are Connaught Place, South Extension I & II, Defence Colony, Greater Kailash I & II, Basant Lok, Noida (Sector 18), Khan Market, Saket and Karol Bagh. Emerging markets are planned for the future requirements with large formats, areas, etc. These markets are Gurgaon, Greater Noida, Faridabad and Ghaziabad.
The prime-selling commercial real estate areas, are: North - Pitampura, Kamla Nagar; South - Greater Kailash I & II, Ansal Plaza, South Extension I & II, Defence Colony, Basant Lok, Saket and Lajpat Nagar; East - Noida (Sector 18), Laxmi Nagar, Preet Vihar; West - Rajouri Garden, Janakpuri, Karol Bagh; and Central - Connaught Place.
While south Delhi is a saturated market, the north-east, and especially the west, are the upcoming markets offering immense potential.
Existing malls: Gurgaon - DLF City Centre, MGF Metropolitan, MGF Plaza, Sahara Mall. Noida - Sab Mall, Centrestage Mall. Delhi - Alankar, and Ansal Plaza. Ghaziabad - East End Mall. Faridabad - Ansal Plaza.
Upcoming malls: Gurgaon - DLF Mega Mall, Regent Plaza, Paras DT, Gold Souk, The Galaxy, Central Plaza, Senior Mall, The Mega City etc. Delhi - M2K, DLF Mall, Ansal Plaza, Aggarwal AE Mall, Rectangle 1, Square 1, The Metropolitan etc. Greater Noida - Omaxe Plaza, Ansal Plaza, Expo Mart etc. Ghaziabad - Shipra Mall, AEZ Vaishali, East Delhi Mall, Orbit Plaza etc. Noida - Supertech Shopprix, Parsvnath Plaza, Senior Mall etc.
Key brands: Nearly, all key brands, national retail chains and departmental stores are present in the city. Premium brands like Marks & Spencer and Lacoste, also have outlets in the city.
An important cultural and commercial centre of West Bengal, and also of eastern and north-eastern states, Kolkata continues to be a key hub for commerce. The total retail real-estate supply in malls is expected to cross 11 lakh sq.ft. by 2005, with an average rentals in the range of Rs 55 to 80 per sq.ft. per month.
Prime retail areas: Retail activity, which was primarily focused in Hogg market area, also known as New Market, expanded to Esplanade, Bowbazaar Market, Bagri Market, China Bazaar, Burrabazaar Market, Chandani Market etc. The trend, now, is towards V.I.P, EM Byepass connector, Salt Lake, Elgin Road, Ultadanga and Howrah. There are many stand alone market complexes such as A/C Market, Vardan Market, Shreeram Arcade, Metro Shopping Complex, Howrah A/C Market etc.
Geographically, the Kolkata retail real-estate market can be broadly segmented into three areas: Park Street Zone - comprises high streets as well as organized retail developments; Gariahat market - caters to the middle-class segment and has small-format stores in high streets; Salt Lake Zone - emerging retail destination, favourably placed due to its proximity to the concentrated areas of Dumdum and Shyam Bazaar.
Existing malls: The city is developing organised shopping malls. Forum - situated in the heart of Kolkata and spread over two lakh sq. ft. on Elgin Road, it took time to establish itself, but has a first mover advantage. City Centre - promoted by industrialist Harshvardhan Neotia, is equipped with a multiplex, and houses big brands like Adidas, Wrangler, Hidesign, etc. South City - spread over seven lakh sq.ft, is perceived to be the biggest mall in Kolkata, with a good catchment area.
Metropolis - one of the new retail-cum-entertainment address, in an area of 1.41 lakh sq. ft is adjacent to CMG residential complex. City Shoppers - towering over Howrah’s most important business locale, the G.T. Road, is spread over 60,000 sq. ft. area and is Howrah’s exclusive mega market. Silver Springs - spread over an area of 70,000 sq. ft is coming up adjacent to ITC hotel on the bypass. Mani Square - proposed on a four-acre plot, next to Apollo Gleaneagles Hospital on the E.M.Bypass,will cover five lakh sq. ft. of area. Kolkata Times Square - being developed adjacent to Ultadanga railway station, will cover three lakh sq. ft. of area.
Upcoming malls: Lake Mall at Rashbehari avenue; TAI Industries mall near Manobikash Kendra, E.M.Byepass; P.C.Chandra Mall, diagonally opposite to ITC Sonar Bangla hotel; Enclave in Alipore; Gariahat Mall between Gariahat crossing and Rashbehari connector; Homeland at Chowringhee and Elgin Road crossing.
Key brands: Some of the prominent retailers include, Pantaloon, West Side, Pizza Hut, Music World, Planet M, Shivsagar, Grain of Salt, Mainland China, Big Bazar, Giant, Arcus, KFC, Domino's, Café Coffee Day, Barista, Amorettos, Shopper’ Stop, Swarovski, Satya Paul, Ritu Beri, Wills Life Style, Adidas, Nike, Cotton World, Levis, Docker, Woodland, Black Berry, Crosswords, Landmark.
The largest city-market and the most cosmopolitan city, Mumbai’s real-estate market is an intriguing mix of organised, semi-organised and unorganised formats. The city’s market size of over Rs 31,000 crore stands unrivaled, making it the prime catchment for every retailer in the country. The total real estate estimated till 2005, is 48 lakh sq. ft, with an average rental of Rs 50 to 150 per sq.ft.
Prime retail areas : Retail market in Mumbai can be classified as: Traditional retail area - Fort and Crawford Markets; Top-end retail activity centres in south Mumbai - Breach Candy, Peder Road, Warden Road, Kemps Corner; Suburban high-end retail activity centres - Bandra, Juhu, Andheri.
There is heightened activity in the development of new malls. Over 90 per cent of the new mall development is concentrated in the suburbs, two-thirds of which is located in new retail destinations, in close vicinity to densely populated residential pockets like Andheri, Malad and Kandivali, in the western suburbs. The far-flung eastern suburb of Mulund has recently become the focus of retail development activity with two new malls, spread over a total of 13 lakh sq.ft.
Andheri Link Road itself will soon house two more malls adjacent to each other. With new mall development on the rise, an aggregate of 47 lakh sq.ft. of retail space is expected to be added to the already existing 5.5 lakh sq.ft., by the end of 2005. Retail activity is primarily driven by apparel, department and discount stores. Two shopping malls, one on Mira Road and another in Thane, which will house shops as well as multiplexes, are being constructed by the Kanakia Group. Landmark Builders Ltd, which has built the Suburbia Shopping Mall at Bandra, is planning one more mall at Goregaon.
After the success of Crossroads, a number of new shopping centres and departmental stores, which include popular names like Globus or new entrants like Saga, are expected to open soon. Saga Departmental Store, the Delhi-based cottage industry store chain, has already opened up the first phase of the total area of 27,000 sq.ft store on S. V Road, Bandra. Satgurus, the lifestyles store, has relocated and taken up approximately 8,000 sq.ft of space on Linking Road, Bandra. Naganis, a department store, has also opened up on Linking Road, a few yards away from McDonald’s.
Rentals for A grade space on Linking Road range between Rs 150 to Rs 200 per sq.ft per month.
Existing malls: Fun Republic, City Mall, The Mall, R-Mall, Centre One, Cross Roads, and High Street Phoenix-Phase 1,2,3. Nirmal Life Style Mall is one of India’s largest retail projects with department stores, hypermarket, multiplex theatres, amusement park located at Muland (W). Developed by Nirmal Group, in an area of 3.3 lakh sq. ft, the mall is operational since 2003, with key occupants like Shoppers Stop and McDonald’s.
Upcoming malls: RNA Classique, RNA Millennium, Grand Hyatt, Heritage, Cross Road, Juhu Tulip, In-orbit Mall, The Hub, Milan Theatre, Suburbia, Kanakia Mall, The Eastern Mall, Dynamix Mall and Raghu Leela Mall etc.
Key brands: All leading departmental stores like Pyramids, Pantaloons, Shopper’s Stop, Lifestyle, Globus or Westside, etc, have marked their presence in the city.
‘B’ category cities: The Mini Metros
The cities included in B category are the mini-metro cities of Bangalore, Hyderabad and Pune.
Bangalore is a thriving, modern business centre and a key hub of the IT revolution in India. Dubbed as the “Silicon City of India”, it is home to both Infosys and Wipro, two of the largest Indian IT companies, apart from a range of IT, ITES and BPO companies. The rapid expansion that Bangalore has seen since the early 90s has driven a real estate boom, transforming and remodeling the old town through commercial, residential and retail developments. The total space, by 2005, is estimated to touch over 20 lakh sq. ft., and the average rentals are in the range of Rs 65 to 100 per sq.ft.
Prime retail areas: The top selling commercial real estate areas in Bangalore are Central Business District (CBD) and surrounding areas - MG Road, Brigade Road, Residency Road, Cunningham Road, Commercial Street. Rentals are Rs 80 to 140 per sq. ft. per month, with capital rates from Rs 6,500 to 12,000 per sq. ft.
Jayanagar and Kormangala are other areas that have seen retail absorption, with rental from Rs 65 to 90 per sq. ft. per month, and capital rates at Rs. 6,500 to 8,000 per sq. ft. There are no major retail spaces available in the CBD areas.
Existing malls: While Bangalore has been one of the early adopters of organised retailing, mall development has lagged behind. Though, Leela Galleria, on Airport Road, is the only operational mall in Bangalore, however, a total of seven mall developments are currently in the pipeline, and are expected to add an additional 21.19 lakh sq. ft. to the market by 2005.
Two of the largest malls in the pipeline include Grand Central and Mantri Heritage, measuring 5 lakh sq.ft. each.
Upcoming malls: The main shopping malls coming up in Bangalore are: Prestige Forum Mall - promoted by The Prestige Group, in an area of 3.5 lakh sq. ft on House Road (Kormangala); Tata Imperial Mall - in an area of 65,000 sq. ft. on Residency Road (CBD); Purva Mall - promoted by Puravankara Group, in an area of 42,000 sq. ft. on Church Street (CBD); Embassy Victoria Mall - in an area of 1.25 lakh sq.ft. on MG Road/Residency Road (CBD); Sigma Mall - in an area of 1 lakh sq. ft. on Cunningham Road (CBD); Adarsh Capital - built by Adarsh Group, on Palace Road, in an area of 2 lakh sq.ft. in two interconnected towers; Adarsh Opus - built by Adarsh Group on Campbell Road, with leasable area is 24,750 sq. ft, covering the entire third floor.
The expected footfalls are approximately 5,000 to 7,000 people on a daily basis, and approximately 10,000 on weekends. The rent would be anywhere between Rs 35 to Rs 65 per sq. ft., all on leasing model.
Key brands: A significant driver of the F&B industry is the pub-culture of Bangalore having 25 Grade-A pubs. Chains of fast-food outlets and cafes, and grocery supermarkets, made popular by the RPG Group’s Foodworld outlets, are also significant.
Slated to become the IT hub with the recent inauguration of Microsoft’s second largest centre in the world, Hyderabad has established itself as a key emerging market in India. The increase in the purchasing power, and low commercial property rates are attracting major retailers. With the announcements of mall developments, the market may face an oversupply of space, which may lead to soft rentals.
Existing and upcoming malls: GVK One - Banjara Hills; Hyderabad Central - Punjagutta; Sigma Mall - Secunderabad; City Centre - Banjara Hills; Sanali Mall - Abids; Expo City - Lower Tank bund; Methodist Attriun - Abids; Prasad Imax - Necklace Road; Babu Khan - Somajiguda. Prasad The Experience, a fully integrated family entertainment centre with an Imax theatre, developed by Prasad Media Corporation Ltd, in an area of 2.35 lakh sq.ft, is located in the heart of the city.
ITE Group India in association with Department of Tourism, Andhra Pradesh, is coming up with Expo City covering an area of one lakh sq.ft with eleven storeys.
Key brands: A large number of major brands are making their presence in the market through franchising.
The city, emerging as an IT hub, comprises of Pune City and Pimpri - Chinchwad (industrial twin cities). The improving infrastructure, in particular the Mumbai - Pune Expressway, has pushed up demands. The trend of organised retail space in Pune is expanding at a rapid pace, as is evident from the number of malls in the pipeline. The city has an estimated supply of over 2.43 lakh sq.ft. of space up to 2006.
Prime retail areas: The prime retailing areas are MG Road, Laxmi Road, JM Road, Bund Garden Road, Koregaon Park, Senapati Bapat Road, Karve Road, Aundh, and Kondhwa. The capital value in Rs per sq.ft, range between 3,500 and 1.25 lakh.
Existing malls/complexes: The 1.75 lakh sq.ft. E-Square on University Road is a notable development. The anchor tenant is a 5-screen multiplex. The development features a number of F&B outlets, the Crossroads bookshop, and a health club called Endurance Plus some major brands.
Upcoming malls: The concept of mall plus commercial projects is slow, but catching up fast. Three malls are coming up in the Bund Garden area, the biggest being Nucleus, which is being developed by Vascon engineers. Three multiplexes already exist and three more will be coming up soon. The largest mall in the pipeline is located within the Raja Bahadur Centre, in an area of six lakh sq.ft, including a 10 screen multiplex.
The Fun 'n' Shop shopper-tainment, an upcoming mall located in Fatimanagar, Pune-Solapur Highway, is a project of Kumar Builders, a Lalit Kumar Jain Enterprise, and incorporates the latest specifications as well as designer ambience. The location has a residential catchment area of over five lakh, and a dense cosmopolitan neighbourhood with good income, benefit. The total saleable area is 93,750 sq.ft.
Key brands: Pune houses most of the top retail brands, departmental chain stores, F&B outlets and apparel stores. In organised retailing, the F&B sector has the most visible presence. Various apparel brands are like Westside, Wills Lifestyle.
Expanding companies: Major companies that are expanding into Pune include, IT companies like Infosys, Wipro, Geometric, Kanbay, Zansar, Cognizant, etc, besides, some smaller ones are also seen.
‘C’ category cities:
The cities under this category comprise, Indore, Chandigarh, Agra, and Kanpur.
The largest city market in the state of Madhya Pradesh, Indore has a mixed real-estate usage with residential, commercial office and retail developments often being accommodated within the same development. Indore’s commercial real estate is essentially focused around the Central Business District (CBD) of MG Road, and AB Road, which runs along the eastern periphery of the city, and can be termed as the Secondary Business District.
Prime retail areas: Retail activity was primarily focused towards MG Road area, which gradually expanded to the neighbouring areas/roads as well, such as AB Road, Race Course Road, RNT Marg, etc. Simultaneously, areas such as Greater Kailash, Manish Puri, etc, have also developed as key shopping areas of the city.
Existing and upcoming malls: Treasure Island - on MG Road, around four lakh sq.ft; Landmark Citi - on AB Road, located along the growth corridor of Indore, and is the most popular FEC developed in an area of nine acres; Velocity 3 - on Ring Road, Indore’s first three-screen multiplex with over 25,000 sq.ft of shopping and F&B areas; Sapna Sangeeta Theatre - on Sapna Sangeeta Road, traditional theatre with two screens, located in a congested, yet popular, commercial area; Mangal City - on AB Road, the project is under construction and is estimated to be in an area of 1.5 lakh sq.ft; Apollo Square - on Race Course Road, located in the prime and upmarket residential area, hosts Indore’s first Café Coffee Day; BCM Heights - developed by BCM Group, is an emerging architectural facade in the upcoming New Indore within 1.4 lakh sq.ft. area of residential complex and shopping arcade, opposite Bombay Hospital, on A B Road.
Other retail projects include, Apollo Mall, Navlakha Complex, PGI, etc.
Key brands: Café Coffee Day, Tanishq, Numero Uno, Provogue, Gini & Jony, The Home Store, Mischief, Spice & Ice, Oyzterbay, Lee, Louis Phillip, Weekender, Woodlands, Planet Fashion, Mr. Beans, Liberty, Van Heusen, Color Plus, Reebok, Nike, Lakme, Arrow, VLCC etc.
Situated at the base of the lower Shivalik range, Chandigarh, today, is one of the most significant urban planning experiments in India. The city boasts of a carefree lifestyle and unique architectural splendor, portrayed through its cosmopolitan character and uniform construction designs, of both residential and commercial establishments, woven within a network of wide, perpendicular roads that dissect the city into 50-plus sectors.
Prime retail areas: Chandigarh is an emerging retail market. There has been a paradigm shift in the consumer behavior with the coming up of top national and international brands and the opening up of a new mall in the city. Chandigarh entered the mall age at a late date, but is gearing up for the development of multiplexes with two plots of 2.5 acre in Sector 44 and 1.5 acre in the heart of the city, Sector 17. The developments on these two plots will add an additional 5 lakh sq. ft of retail space to the city.
Existing malls: Fun Republic - launched by E-City Entertainment (I) Pvt. Ltd, the mall is the first in the city and offers a unique shopping experience. Catchment areas include Chandigarh and Panchkula, especially the upper middle class population. The mall registers around 5,000 to 6,000 footfalls on weekdays and around 8,000 on weekends.
Other retail areas: The other prominent retailing areas in Chandigarh comprise the sector markets. While Sector 17 is the central point of the city with the presence of major brands, Sector 22 is an important market with wholesalers dominating the shopping region along with Sector 8, Sector 9, Sector 35, and Sector 26.
The rentals do not vary much and are approximately between Rs 35,000 and Rs 3.5 lakh, depending on the prominence of the space and its commercial validity. Rent varies up to 5 per cent every year, that too depending upon the market variables.
Satellite towns: Chandigarh has satellite towns of Panchkula and Mohali, in its peripherally. In Panchkula - two plots for mall development have been sold. Shalimar Mega Mall, coming up in Sector 5, is being developed on two acre plot by HUDA. Mall plots cost approximately Rs 25 crore each.
With the concept of shopping malls getting popular, Agra is becoming an important commercial centre. There are numerous shopping areas and malls, and, being famous for leather goods, Agra is a hub for hand-made leather items.
Prime retail areas: The old city and the main marketplace, Kinari Bazaar, are situated in the north of the fort. The main shopping areas are Taj Mahal Complex, Kinari Bazaar, Raja Mandi, Sadar Bazaar, the Gangotri at Taj Mahal Complex, and the UP Handlooms, UPICA at the Sanjay Palace are two UP Government emporiums. The cantonment, situated at the south of Agra, is known for its mall and the commercial centre, called Sadar Bazaar.
Malls: There are three malls that are either operational, under construction, or planned.
With a population of 40 lakh, the city is the trade, economic and educational capital of UP.
Prime retail areas: The Mall, Birhana Road, Gomti No. 5, Parade Naveen Market Miston Road and PPN market. The City Centre also offers the shopper an array of state emporia, viz. UPICA, UP Handloom Emporium and Manjusha, Bengal emporium, The Mall.
Existing malls: Mega Mall - Promoters KAN Constructions & Colonizers Pvt. Ltd. have developed two 9-storeyed attached towers, shopping-cum-office complex, within an area of 1.17 lakh sq.ft. offering office space of 77,000 sq. ft. and outlets of 40,000 sq. ft. Another shopping mall is in the developing stage.
India has been rated as the fifth most-attractive emerging market for retailing. Over the next five years, the market, as also the course of mall development, is certain to evolve significantly, as brands from cross-sections realise the true worth of setting up shop within malls.
Retailing in the organised sector is growing at a rate of 8.5 per cent a year, and was worth Rs 19,500 crore last year, yet, it consists of only 2 per cent of the country’s total retail volume.
Nations that have enjoyed the greater economic and social progress have been those with a strong and organised retail sector, and India cannot remain outside the league for long.
The years ahead belong to the shopping malls. Shopping malls will become a pivotal platform for various types of retail formats, feel observers. The main concentrations of malls will be in and around Mumbai and the NCR, according to Knight Frank India retail review. The availability of more retailing space will also mean new challenges which did not exist earlier.
The development of malls have also opened another route for retail formats to display their brands, giving them the ability to position and monitor their formats vis-a-vis others.
The country will also witness malls which will cater to specific customer groups. Formats like seamless malls, prevalent in the west, is also making an entry which is indicative of the fact that players are experimenting with the concept. Other formats include auto malls and malls dedicated to home improvements. Then there are malls that are dedicated to speciality of lifestyle of one or the other kind.
It is estimated that, of the nearly 230 malls coming up by 2006, about 40 per cent will be located in and around Delhi. The DLF plans to bag about 10 such projects in the next few years. DLF ventures like DT Cinemas, City Centre, and Mega Mall are doing good business despite huge operational costs. Delhi is currently seeing a 25 per cent occupancy of the FECs, which is expected to increase manifold with better accessibility and connectivity with other regions. Primarily based in Delhi, the DLF is scouting for real estates investments in several other cities like Chandigarh, Amritsar, Mumbai, and Hyderabad. The group is also eyeing the eastern markets and will buy land in Kolkata to extend its activities.
Parsvanath Developers have chalked out a Rs 4,000 crore expansion plan and a considerable portion of this would be in towns around Delhi. It is also focusing on 10 malls in the next three years in places like Moradabad, Sharanpur, Jaipur, Malerkotla and Ludhiana.
Some developers are also talking with the UP government on land acquisition for various projects in Aligarh, Bijnor, Mathura and Jhansi.
Hotels major ITC is setting up 45 shopping malls in the countryside, each the size of Delhi’s Khan Market. The first five malls costing over Rs 20 crore, will be ready soon.
However, the survival of the shopping malls depends on strong brands as anchor tenants, competitive rental rates and strong mall management.
With the huge number of mall coming up, observers feel that this would lead to oversupply which will affect the performance of malls. However, others in the industry feel that there will be competition which will result in efficiency and create niche markets. Three malls on the Mehrauli-Gurgaon road are competing to attract footfalls. Sahara Mall is doing big business mainly because of its discount shops, Big Bazaar. DLF City Centre has a large number of women outlets like Meena Bazaar, Panna Sarees, W of TCNS Group.
A proper combination of western and Indian shops catering to women and children, for example, a chhole bhature shop along with a modern pizzeria, will attract all kinds of shoppers.
Theme parks, artificial beaches, hotels, bungy jumping and golf courses are a possible reality in the malls. Malls are no longer shopping areas, but places for the entire family to avail a whole experience from shopping to movies to eating all under one roof.
Studies of western malls have shown that when the entertainment component is added, the average time and the number of footfalls have increased by as much as three times. But how the Indian consumer reacts to the new shopping destinations remains to be seen.