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Bigger projects, more F&B, entertainment options such as trampoline parks and sports turfs—here’s how the mall economy is evolving
Increased retail investment, expanding cities, growing economies in Tier II cities and a shift in shopping and recreational patterns are driving, and slowly changing, India’s mall economy.
After a lull between 2012 and 2017, driven mainly by the global economic downturn of 2008, there’s more investment and developer confidence.
Over the next five years, about 90 new malls are expected to come up, according to a report by property consultants JLL India titled Indian Retail: Stepping up the Game.
These are planned mainly in higher-income metros such as Mumbai, Delhi, Bengaluru and Hyderabad, and also high growth-rate cities like Lucknow, Coimbatore, Chandigarh and Mangaluru.
There’s increased consolidation too, with mall chains expanding the footprint of each establishment, and smaller malls making way for gigantic spaces that cover several million sq ft each. “Over the past year, the effects of policy changes such as GST and demonetisation have eased,” says Ram Chandnani, managing director of advisory and transaction services for India, at real-estate consultancy CBRE.
“At the same time, 100% FDI in retail has opened up more opportunities for international retailers to enter the Indian market, which has always had great potential owing to its large population and growing economy,” he says.
Additionally, the establishment of Real-Estate Investment Trusts (REIT) is allowing developers to draw investment through more channels.
“Developers can partner with investors to jointly form a REIT, which can be listed too,” says Rajneesh Mahajan, CEO of Inorbit Malls.
RESHUFFLE ON THE CARDS
“Data shows that between 2002 and 2008, around 100 malls came up across the country,” says Anuj Puri, chairman of Anarock Property Consultants.
This boom saw a new shopping culture take shape in India, but knowledge of mall manage- ment was limited and many establishments fell into disrepair or disuse.
There was inadequate parking, not enough toilets, stalls inside atriums and layouts that resembled a shopping centre from the 1980s.
Rajeev Jain, director of Nirmal Lifestyle, recalls building the Mulund mall in 2003. “There was no concept of professional facility management back then,” he says.
“There were several glitches. Some areas would not be cleaned, air conditioning would not function properly. The initial days were a series of trial and error.” Nirmal Lifestyle in Mulund is one of the big ones that is set for a revamp. “Over the next two years, we plan to build a bigger, better designed one in its place,” says Jain.
“Institutional money has put the focus on large-size, quality malls, which is essentially what attracts global retailers,” says Chandnani of CBRE.
Phoenix has been expanding its footprint rapidly along these lines. Its malls in Mumbai and Pune tend to cover over 1 million sq ft each.
“More space means the ability to offer more options,” says Rajendra Kalkar, president (West) of The Phoenix Mills Pvt Ltd, which owns High Street Phoenix chain of malls. Phoenix has also added malls in Lucknow and Bareilly over the past three years. Oberoi is stepping the game up too. “Our mall in Goregaon covers 5 lakh square feet, but the next one, in Borivli, will be nearly twice as large,” says Anupam T, vice-president of Oberoi malls.
The Amanora mall in Pune, initially 3 lakh sq ft, is also looking to add another 2 lakh sq ft, and build another property in the same city.
“Between 2011 and 2017, we also went through a period of lower footfalls, so we had to downsize stores, lease them differently. But there is a spike in activity now and so we have decided to expand,” says Surjit Singh Rajpurohit, the mall’s COO.
There’s been an overall shift in emphasis too, from shopping to the family or group experience.
Food courts are getting bigger, spaces for live music, popups, events, performances, sports and gaming are being added or enhanced.
“Fashion is important, but our research consistently shows that shopping is not the reason people come to the malls,” says Sunil Shroff, CEO of Viviana mall in Thane.
At the Gardens Galleria mall in Delhi, F&B options have grown from under 10 in 2016 to more than 30 brands, says mall head Mahim Singh.
“We began in 2010 with a focus on shopping, but have had to increase our dining options,” says Sonica Malhotra, joint managing director of the MBD Group, which owns the MBD Neopolis malls in Ludhiana and Jalandhar.
V Muhammad Ali, COO-retail of the mall division at Prestige Group, which operates the Forum malls in Chennai, Udaipur, Mysore and Mangalore has a similar story. “Our upcoming project, Forum Shantiniketan in Bengaluru, will have a go-karting track, a trampoline park and also a performance arts theatre,” says Ali.
Between 2011 and 2017, we went through a period of lower footfalls, so we had to downsize stores, lease them differently. But there is a spike in activity now. So we are expanding and looking to add around 2 lakh sq ft to our existing space.
SURJIT SINGH RAJPUROHIT, COO of Amanora mall in Pune
During the initial boom of the early 2000s, malls such as Inorbit in Malad, were mostly around half a million sq ft in size. Upcoming malls are being planned as bigger spaces, at over a million sq ft each, which allows them to offer customers more experiences.