Many of India''s
malls seem to be in trouble as few retail buyers and unaffordable rentals are
pushing developers to change them into office complexes reports CNBC-TV18.
Mumbai''s first mall, which was once a glittering retail complex, today is being
marketed as an office property. UBS has taken 80,000 square feet here for Rs410
a square foot, on par with retail rentals in nearby malls such as Phoenix and
is not the only one to go looking for corporates. In Gurgoan, Centrum Plaza on
Golf Course Road and projects like Vipul Agora, Orchid Plaza and Time Towers on
MG Road are looking out for corporate tenants. That''s because there are just too
many malls in the same area.
given catchments if there are three malls, between them all the retailers will
occupy the space but what happens to the fourth, fifth and sixth mall in the area?
If you cannot create an attractive buyers'' basket in the mall, it will be unsuccessful"
says Govind Shrikhande, CEO, Shoppers Stop.
the past six months, certain locations in Mumbai, Delhi and Gurgaon have seen
office properties command rentals at par with retail rents that are otherwise
higher. That''s hope for builders. That''s why K Raheja Universal''s proposed mall
in Malad in suburban Mumbai too is being positioned as an office complex.
though we thought retail rentals did look attractive at Rs150 - Rs200 a sq foot,
we questioned the sustainability and benchmarked it against office space. Now
we also find Bandra-Kurla Complex and Andheri in Mumbai out pricing themselves,
so we found we could match the retail prices even by doing an office complex there"
adds Ashish Raheja, managing director, K Raheja Universal.
developers in the metros may have found a way out by cashing in on the increasing
demand for office space the fate of such malls in Tier 2 and 3 cities remains
to be seen. And with 260 malls coming up in metros alone, many more malls might
find themselves following Crossroads.