scn mapic special issue november...

DEVELOPING RETAIL SPACES IN INDIAMAPIC SPECIAL ISSUE | NOVEMBER 2016

THE CASE FOR EXPERIENTIAL WIDTH & DEPTH

India’s Govt Facilitates Resurgent Comeback for Retail Real Estate

The 5 Big Trends: India’s Top Developers Reveal All

ENTERTAIN& ANALYSE

19 – 20 September, 2017Mumbai, India

SCN_Cover.indd 1 11/11/2016 10:47:29 AM

MAPIC SPECIAL ISSUE | NOVEMBER 2016 | Shopping Centre News | 3

EDITOR’S NOTE NOVEMBER 2016 | MAPIC SPECIAL ISSUE | PAGES: 44

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The immense consumption promise that India holds is indisputable.

A young population is a guarantee of a consumption base willing to

experiment and experience new products and services. However, for

long-term success in India, it may be pertinent for me to spend a few

moments on what India is.

We are a melee of races, cultures, languages and tastes. We are

different from each other in as many ways as we are one. Every generation

has also seen races and cultures coming in enriching India and being

absorbed in the thought that is India. And the thought keeps growing.

Indians when loved, do love back. A fact that one can easily verify

from the Czech footwear major Bata, which has been around since

1931 and so many others, including Cadbury’s, which arrived in 1948. In

fact, ask an average Indian and he will fi ght tooth and nail and tell you

(incorrectly, but passionately) that these are Indian brands.

Over the last decade, more and more fashion, lifestyle, and speciality

brands have either entered India or are aiming at claiming their share

in her untapped and massive retail market. Because of the entry of

international brands in the country, India’s retail market has also grown

with evolution of retail formats and hence with more takers for quality

retail real estate spaces.

In this special MAPIC issue of Shopping Centre News, we present

topics of immediate interest to international retailers and retail real

estate investors. Beginning with an overview of Indian retail and the

real estate sector, we discuss how international retailers are planning

and strategising to compete with the local counterparts. We also bring

you vision and views of the who’s who of retail real estate in India,

commenting on how Indian real estate is evolving beyond offering just

shopping spaces.

In the pages inside, you will also fi nd a report on India’s largest

retail intelligence event – India Retail Forum 2016 – offering an inside

story on how analytics and entertainment are the two buzzwords

in shopping centre development today. And also how the mall, as

an asset class, is attracting a much more educated and scientifi c

approach from savvy investors.

Editorial.indd 3 11/10/2016 5:21:29 PM

4 | Shopping Centre News | NOVEMBER 2016 | MAPIC SPECIAL ISSUE

16. Abhishek Bansal Execu� ve Director Pacifi c Mall17. Arjun Gehlot Director, Ambience Mall – Gurgaon & Vasant Kunj18. Benu Sehgal Senior VP, Mall management, DLF Place, Saket19. Dinaz Madhukar Senior VP, DLF Luxury Retail & Hospitality20. Mukesh Kumar Senior VP, Infi ni� Mall21. Pramod Ranjan Dwivedi Head-Marke� ng, Ambuja Neo� a22. Rajendra Kalkar Senior Centre Director, High Street Phoenix, Mumbai23. Sanjeev Mehra VP, Quest Proper� es India Ltd.24. Sudarshana Gangulee Senior GM - Marke� ng, Mani Group25. Sunil Shroff CEO, Viviana Mall26. Anil Malhotra COO (Chief Opera� ng Offi cer), Elante Mall Chandigarh26. Puneet Varma Associate VP, Marke� ng and Corporate

Communica� ons, Inorbit Malls

NOVEMBER 2016 | MAPIC SPECIAL ISSUE | PAGES: 44CONTENTS

8. Roundup Country Roads Investor confi dence in the Indian market is witnessing an upswing, with exis� ng global brands expec� ng sales from their

Indian units to grow mul� -fold in the next few years. Here’s crisp roll call of the latest global entrants – represen� ng everything from toys to luxury accessories – and how their Indian partnerships are panning out.

10. Focus Retail Real Estate Regains Sheen India’s growing reputa� on across the globe as an investment des� na� on has led to an upswing in private equity

(PE) investment fl owing into the country. Notably, the retail sector has been able to corner 8 percent of the total PE investment pie.

12. Perpec� ve Winds of Change There is li� le doubt that the country is becoming an a� rac� ve des� na� on for global retailers with further liberalisa� on

of the FDI policy and crea� on of business friendly environment. the government’s big � cket reforms agenda is the goods and services tax (GST) bill which will lead to the crea� on of backend infrastructure cri� cal for the retail industry.the gst bill has been cleared by both the houses of india’s parliament, which brings it one more step closer to implementa� on.

28. Report Malls Of India 2017-20 – Key Sta� s� cs In the September 2013 edi� on of Malls of India 2013-16, we had es� mated the existence of 470 opera� onal malls with

a total existent retail space of 129 million sq. � . We had also shared that another 250 upcoming malls with 77 million sq. � . of retail space would be opera� onal within the next three years. Therefore, by 2016, a comprehensive sketch of India’s mall industry es� mated approximately 720 opera� onal malls with an opera� onal space of 206 million sq. � .

34. Special Feature The Case for Experien� al Width and Depth Why are Entertainment and Analy� cs the latest buzzwords among shopping centre developers in the world’s fastest

growing major market? It’s all coming from a greater understanding of -- and respect for -- retail, as a� endees at the India Retail Forum 2016 discovered.

The retail real-estate industry is a signifi cant one in India that is joined at the hip with the modern retail industry – the growth of one is impossible without the other. With interna� onal retailers making their headway toward the most dynamic retail market of the world, India’s retail real estate scenario is bound to take a 360 degree turn.In the following pages, we bring you the views of the top movers and shakers of the Indian retail real estate industry on a variety of issues facing the sector, their vision about the future and what is needed for retail real estate to really innovate.

DEVELOPER’SMANUAL

THE15. LEAD STORY

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WINDS OF CHANGEFUELLING THE RENEWED INTEREST IN INDIA RETAIL REAL ESTATEThe report, entitled ‘Winds of Change’, provides an explicit Indian perspective on JLL’s recently published global report Destination Retail 2016, which examines the presence of 240 international retail brands across 140 key retail cities, and the drivers of expansion as well as the opportunities and barriers for retailers across the globe. India did anything but hit the high notes in this report, but the factors that have led to the country’s unspectacular rankings are defi nitely changing. New Delhi – the top-ranked Indian city in the JLL Global Cross Border Retailer Attractiveness Index 2016, ranks at 92 and Mumbai at 109. London takes the top spot with the highest presence of global brands, followed by Hong Kong at second rank and Paris in the third place.

BY ASHUTOSH LIMAYE

New Delhi, topped the rank of Indian ci� es in the JLL Global Cross Border Retailer A� rac� veness Index 2016. It stood at 92nd spot, followed by Mumbai which ranked 109. The report by JLL, � tled Des� na� on Retail 2016, ranks 140 global ci� es based on the presence of 240 global retail brands in those ci� es. These ci� es combined, accounts for 36 percent of

the world’s GDP and over US $15 trillion of consumer spend. London takes the top spot with the highest presence of global brands. It is followed by Hong Kong at second rank and Paris at the third place.

While it comes as no surprise to see ci� es from developed countries at the top of the list, what is surprising is that ci� es even from other developing countries such as Indonesia, Thailand, Philippines, and Vietnam rank hugely higher than the Indian ci� es - Bangkok bagged the 13th spot, Jakarta is at 24, Manila at 29, and Ho Chi Minh City at 37.

The study comes at a � me when India has emerged as the fastest growing major economy in the world with a GDP growth rate of 7.6 percent (in 2015-16) and rock solid consumer confi dence. The MasterCard Index of Consumer Confi dence for the fi rst half of 2016 has placed India in “extremely op� mis� c” territory, and the central government is pursuing an aggressive reforms driven agenda including big-� cket reforms like the GST bill, which are expected to propel India into a long term higher growth trajectory.

Given the dichotomous situa� on of an under-penetrated but rapidly improving market, we postulate that the abysmally low presence of global brands in the country is a situa� on likely to change due to faster economic growth, rising affl uence and consumerism, suppor� ve government policies, and enhanced fl ow of capital to the retail real estate sector.

About the author: Ashutosh Limaye, National Director – Research, JLL India

PERSPECTIVE

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THE GOVERNMENT’S BIG TICKET REFORMS AGENDA IS THE GOODS AND SERVICES TAX (GST) BILL WHICH WILL LEAD TO THE CREATION OF BACKEND INFRASTRUCTURE CRITICAL FOR THE RETAIL INDUSTRY.THE GST BILL HAS BEEN CLEARED BY BOTH THE HOUSES OF INDIA’S PARLIAMENT, WHICH BRINGS IT ONE MORE STEP CLOSER TO IMPLEMENTATION.

The Indian economy is presently the fastest growing major economy in the world and is expected to con� nue its out-performance over other emerging market countries into 2017 as per projec� ons by the Interna� onal Monetary Fund. The benchmark Ni� y 50 stock market index currently trades near life-� me high levels. The buoyancy in fi nancial markets is expected to percolate to the real economy through the remaining term of the incumbent government. Per� nently, the improved prospects of the Indian economy come at a � me when rival emerging markets are undergoing modera� on in growth rates.

Affl uence is on an upward trajectory: The Kotak Wealth Management Report (An arm of Kotak Bank), pegs India’s popula� on of ultra-rich individuals, income exceeding `250 Million (USD 3.8 Million), at 1,46,000 as of 2016. This refl ects an es� mated 30 percent growth over the last 5 years. Luxury car sales have been robust in recent years – Mercedes-Benz registered its best ever sales in India selling 13,502 vehicles in 2015, clocking 32 percent year-on-year growth. Aggregate sales of luxury cars in India in 2015 were 13.5 percent higher than the previous year.

Surge in entry of new brands: There has been a surge in the number of global retailers entering the country this year. Aéropostale, The Gap, and The Children’s Place entered in partnership with Arvind Lifestyle Brands. Topshop and Topman will retail their products on Jabong.com, an Indian e-commerce web site. Hennes and Mauritz became the fi rst global retailer to enter India a� er the government approved 100 percent FDI in single-brand retail and plans to double the number of its stores in the country from six currently to 12 by year-end.

Incumbent retailers expanding aggressively: Zara which made a profi t in its fi rst year of opera� ons in India and crossed USD 100 million in sales within 5 years, recently signed the largest space taken up in India by an interna� onal retailer in a heritage property in upmarket South Mumbai at record high rentals. Adidas which earlier operated in India only through the franchisee route has now decided to open company owned stores in addi� on to franchisee stores. Furniture giant Ikea, which is construc� ng its fi rst store in India, has announced plans to open 25 stores over the next 10 years. Danish luxury furniture maker BoConcept has entered the Indian market by opening its fi rst store in Delhi and plans to have eight stores over the next fi ve years. US fast-food chain Burger King, which is present in 13 ci� es, plans to open 40 new outlets across ci� es.

City Rank City Rank

London 1 Beijing 8

Hongkong 2 Kuwait City 9

Paris 3 Tokyo 10

Dubai 4 Delhi 92

New York 5 Mumbai 109

Shanghai 6 Bangalore 126

Singapore 7 Source: JLL Destination Retail 2016 report

Forecast Source: International Monetary Fund

2016F 2017F

Ind

ia

Chi

na

Phi

llip

ines

Viet

nam

Ind

ones

ia

Mal

aysi

a

Turk

ey

Thai

land

Sout

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rica

-3.8

7.5

6.56.0 6.3

4.94.4

3.8

3.0

0.6

Bra

zil

Projected annual GDP growth rate of emerging economies for 2016-17

Suppor� ve government policies, The GST boost: The government’s big � cket reforms agenda is the Goods and Services Tax (GST) bill which is expected to give a huge boost to the warehousing and logis� cs sector leading to the crea� on of backend infrastructure cri� cal for the retail industry.

The GST Bill being pursued by the union government has been cleared by both the houses of India’s parliament, which brings it one more step closer to implementa� on. The GST harmonizes 11 state and central taxes, wipes out the dis� nc� on between goods and services, eases compliance, and makes it easier to conduct inter-state trade in India. The resul� ng effi ciency benefi ts are es� mated by experts to lead to a 70-100 basis points incremental contribu� on to India’s real GDP growth rate making it a truly game-changing reform for the country.

Liberalised Foreign Direct Investment regime: In 2015, the union government took fresh steps to boost foreign direct investments in real estate — removed restric� ons on minimum size of development (20,000 sqm) and minimum capital requirement (USD 5 million). Several clauses

Winds of Change_JLL.indd 13 11/10/2016 3:05:36 PM

MAPIC SPECIAL ISSUE | NOVEMBER 2016 | Shopping Centre News | 15 MAPMAPMAPMAPMAPMAPMAPMAPMAPAPAPAMAPMAMAAAAAAA IC IC ICIC ICIC CIC ICC SPESPSPESPESPESPESPESPESPESPSPEPPP CIACIACCIACIACIACIACIAAAAC AC L IL IL IL IL IL ILL ILL L SSUSSUSSUSSUSSUSSSSSSSSSUSUSSUSUSSUSSUSUUUSSUUSSUSS EEEEEEEEEEEEEEEEEEEEEE | | ||| || || NOVNOVNOVNOVNOVNOVNOVNOVOVNOVNONOVNOVNOVNOVONOONNNONNOONOVNNNNNNONOVNNNNNOONOONOOOOOOOOOOO EMBEMBEMBEMBEMBEMBEMBEMBEEMEMEMBEMBEMBEEM ER ER ER ERER ER ERRRERER EERRERERREEEREEEERRRRRR R 201201201220122012020120201012020120201201201201201220101201202020222222200000 66666666666666666666666666 | | | | || | |||| || | | ShoShoShoShoShShoShoShohhoShohoShoShoShoShShoShShoSShSShoShoSShShShhoShoppippippippippippippippipppipippiippipipipipppipippppippippipiipipipipiiingng ng nng nnng ng ng ngngng nnng ng ng ng ng ngnngngg ng nnngngngnngngng ngnngnnggggggnnnggnnnnnnnngnnnnng g CeCenCenCenCenCenCenCenCenCenCenCenCeneCenCeCenCenCeCenCCeCeCenenCeCenCenCCeCCCenCenCeneCenCenCenCenCCeeCCCCeeeeCCCCCCeCCCCCCCCCCC nnCCCC tretretretrtretretrertretretretretretrettretttretretretreeetrett etreretreet eeret e Ne Ne Ne Ne Ne Ne NeNe Ne NeN NNeNe Ne NeNeNe NeNeNN NeNNNeNe NNeNeNNeNeNNNNNeNN wswswswswswswswsswwswswsswswsssss | | | | | |||||| 15 15 15 151515155151515 551511515155 155155

DEVELOPER’SMANUALThe retail real-estate industry is a signifi cant one in India that is joined at the hip with the modern retail industry – the growth of one is impossible without the other. With interna� onal retailers making their headway toward the most dynamic retail market of the world, India’s retail real estate scenario is bound to take a 360 degree turn. In the following pages, we bring you views of the top movers and shakers of the Indian retail real estate industry on a variety of issues facing the sector, their vision about the future and what is needed for retail real estate to really innovate

THE

LEAD STORY

Vision & Views.indd 15 11/10/2016 7:17:07 PM


LEAD STORY

In 2015, the Indian government took strong steps to boost FDI in real estate — removed restric� ons on minimum size of development and minimum capital requirements. As a result, in 2016, we’ve seen a surge of foreign investment in retail real estate. How would you sum up the investment climate in India as far as shopping centre development is concerned?

The growth of online sales has thrown up challenges for brick and mortar retail, but also many opportuni� es to develop unique retail proposi� ons. How are malls in India op� mising the opportunity to house new retail formats and concepts?

Replica� ng the global mood, Indian consumers too are leaning towards shopping centres that off er 360-degree lifestyle experiences, as opposed to those that are retail-centric. How should developers innovate to add more lifestyle experiences into their off er?

India is the fastest growing major market of the world today, and that is refl ected by a very high growth in consump� on. As seen in markets such as Dubai, Singapore, etc, high consump� on necessitates the need for big-box centres, or larger-than-life off ers, such as megaplexes. Do you see Indian developers moving towards this approach in the immediate future?

As an asset class, retail real estate is globally regarded as the most lucra� ve. What is the broad Indian experience of ROI on shopping centre development? How can the entry of REITs (as expected in 2017) impact rthe industry both in terms of transparency and profi tability?

The refurbishing of the capital gains taxes will pave the way for Real Estate Investment Trusts (REITs) being listed in India fi nally. The setup of the investment infrastructure fund will help in giving an added boost to the industry. Though globally REITS account for a large share of the real estate market its is just fi nding its feet in India and has a long way to go.

Since the � me the retail sector opened to 100% foreign direct investment (FDI), there has been a marked change in the retail real estate scenario in India with some of the industry experts es� ma� ng the Private Equity Investment be somewhere around $80 million. The other factors that are supplemen� ng this change in investment climate are poli� cal and economic stability, policy liberalisa� on, introduc� on of single-brand retail, increase in consumer spending and the entry of global brands has led to a change in the way retail is developing in India.

This environment is upbeat not only for investment but also for the consumer who is more aware, has increased spending power and spoilt for choice with the entry of global brands. This year there was an increase in retail investment and this will con� nue to the next year as well. Despite the increase in online retail the brick and mortar retail will con� nue to go strong and spread to the other mature markets in India.

Shopping malls have undergone a metamorphosis in the recent years. A shopping mall is no longer just a place where you go to shop and then return. Now the consumers have a lot of op� ons available, such as shopping malls, hypermarts, online stores and High street shopping. India is the fi � h largest preferred retail des� na� on globally and is also the highest in the world in terms of per capita retail store availability making it a dynamic and fast growing sector in India today. Malls are no longer just a shopping des� na� on but about increased customer engagement. Malls are about providing a complete 360degree entertainment and family ou� ng pla� orm to its customers with a right mix of shopping with dining and family fun. New retail formats are adop� ng technology in a big way to support the right brand and tenant mix.

Pacifi c Mall is one of the top, premium, shopping, entertainment and leisure des� na� on hos� ng more than 130 Na� onal and Interna� onal Brands in the country as shopping never goes out of fashion at Pacifi c Mall, as it is a shopping, entertainment and leisure extravaganza 365 days a year!

Shopping mall provide much more than just shopping for the customers. We believe in customer engagement and providing them with a holis� c experience. Through the year we try to engage and establish connect across age groups and category of audience through our niche campaigns and ac� vi� es. Apart from this our mall off ers various convenience services to our shoppers such as � cket booking, currency change, bill payments etc. Now we are moving from movies to play zones to much more like in� mated events, like we just celebrated Diwali and before that Auto Expo. Other popular ac� vi� es that customers always look forward to are our events during Friendship Day, Yoga Day, Planet Pacifi c “summer workshop etc.

The developers have already realised the need of the big box retail especially in the entertainment ver� cal. The number of screens in the new mul� plexes are increasing and the size of the entertainment op� ons have also increased. The fashion anchor space is also seeing this change where brands like zara use to do stores of 15-16000 sq� are now looking at up to 40,000 sq� stores. Similarly h&m is also looking at 30,000 sq� plus stores.

This should be done with some cau� on though keeping in mind the size of the mall and the market size where the mall is being built.

EXECUTIVE DIRECTOR PACIFIC MALL

Abhishek Bansal

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REPORT ANALYSIS

KEY STATISTICS

ESTIMATING THE CURRENT NUMBER OF MALLS IN INDIA Images Research con� nued to monitor mall development. While doing so, we fi rst considered informa� on of the 375 malls which were opera� onal un� l the end of 2013. Ninety-four percent of these malls con� nue to be opera� onal in 2016, about 5 percent of them have shut down for diff erent reasons, and the remaining are either under renova� on or are not fully opera� onal. On the other hand, there were 187 upcoming malls in 2013. While 48 percent con� nued to stay under the upcoming category, about one-third went opera� onal by 2016. The remaining 20 percent shut down. There were also a group of 6 malls which were projects on hold in 2013. Currently, two have become opera� onal, three are in upcoming stages, and one project was shelved. Post 2013 research indicated 88 more shopping malls, which Images Research added as ”new” malls to the exis� ng list – these displayed a very rare even split – 50 percent are opera� onal today and 50 percent are upcoming malls. A� er carrying out diligent calcula� ons on the gathered data of malls, a total of 459 clearly iden� fi able malls are found to be opera� onal in 2016 and 141 clearly iden� fi able malls are in the upcoming stages in India. While our outreach to malls in the country is s� ll far from over, our latest research along with feedback from real estate consultants and other experts, threw up clear indica� ons of the existence of many more malls. In fact, the frequency of such indica� ons/sugges� ons was much higher than what we experienced during the research for the previous edi� on. We tradi� onally account for such mall also within our es� mate of total mall count. However, on the basis of prudence, we will only slightly upgrade our assump� ve existent set from the 22 percent of the universe in last edi� on to 25 percent in this edi� on. On the other hand, the similar assump� on for unknown upcoming malls is 30 percent of assumed upcoming universe.

MALLSOF INDIA2017-20

In the September 2013 edition of Malls of India 2013-16, we had estimated the existence of 470 operational malls with a total existent retail space of 129 million sq. ft. We had also shared that another 250 upcoming malls with 77 million sq. ft. of retail space would be operational within the next three years. Therefore, by 2016, a comprehensive sketch of India’s mall industry estimated approximately 720 operational malls with an operational space of 206 million sq. ft.

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/// OPERATIONAL MALLS ANALYSIS: KEY ESTIMATES ///

In MOI 2013-16, we es� mated the existence of 470 opera� onal malls at the � me of prin� ng of the report. We had compiled data on 221 qualifi ed full-informa� on-known malls, with par� al-informa� on on 144 malls. We specifi ed that 22 percent of the universe is unknown. Within this data, informa� on was also analysed to study various industry benchmarks and standards, other than the es� mates. The numbers in the analysis sec� on of the current report, MOI 2017-20, are based on 324 fully-analysed malls of the total es� mated 612 opera� onal malls. The sample share in the total universe of malls has increased from 47 percent to 53 percent in this report. Therefore, we believe that this report comes up with an increased sample size and gets much more credible informa� on on industry development. We have followed the same standards and assump� ons of the last report to eliminate unqualifi ed malls from our analysis. Malls with retail space of 100,000 sq. � . or above were considered for this analysis and ones with incomplete informa� on were kept out. We will also retain the assump� on that unknown upcoming malls are smaller than the known ones by 40 percent in gross leasable area, for prudency regarding future predic� ons. However, considering the deeper informa� on we have on current size averages, we deem it fair to revise the assump� on that this set of unknown opera� onal malls are smaller than the known set by only 25 percent.

The defi ni� ve terminology has also been kept same, as below: North Region includes Delhi, Haryana, Punjab, Himachal Pradesh, Chandigarh, Rajasthan, Jammu and Kashmir, U� arakhand and U� ar Pradesh. East Region includes Bihar, Odisha, Jharkhand, Chha sgarh, Assam, West Bengal and North-Eastern states. West-Central Region includes Goa, Gujarat, Maharashtra and Madhya Pradesh. South Region includes Andhra Pradesh, Kerala, Karnataka and Tamil Nadu.

A Large mall is a mall with >= 1 million sq. � . of GLA (Gross Leasable Area). A Medium mall is between 0.5 to 1 million sq. � . of GLA. A Small mall is between 1 lakh sq. � . to 0.5 million sq. � . of GLA.

A Metro city is a city with a popula� on of more than 4 million. A Tier 1 city has popula� on between 1 to 4 million. A Tier 2 city is a city with popula� on less than 1 million.

On the basis of informa� on shared and our analysis based on that data, this edi� on of Malls of India confi rms that as of September 2016, there are 612 opera� onal malls in India. 201 more malls are under development and will become opera� onal in India by 2019. By 2019, the total number of malls in India will be 813.

MALLS IN INDIA TODAY

Total Mall Retail Space in India [Total Gross Leasable Area (TGLA)]: The total GLA of the 324 analysed malls was close to 105.3 million sq. � . This means an average GLA of 325,000 sq. � . per

mall. Further, assuming that the GLA of the remaining 288 malls is 25 percent smaller, we can conclude that the Total Mall Retail Area in India is 175.5 million sq. � .

Average Gross Leasable Area (GLA) per mall in India: The average GLA of a mall in India is 286,764 sq. � . This is an increase of 4.8 percent from previously reported average GLA

of 273,522 sq. � .

Total Mall Built-Up Area (BUA) in India: The ra� o between Built-up Area and GLA stays at 1.6 as previously reported. Therefore, the total Mall Built-Up Area (TBUA)

in India is 280.8 million sq. � .

Average Mall Built-Up Area (BUA) per mall in India: Hence the average BUA of a mall in India is 458,822 sq. � . This is an increase of 7 percent from the previously reported

average GLA of 428,542 sq. � .

The ra� o between Built-up Area and GLA or Mall Area Ra� o (MAR) stays at 1.6 as previously report i.e. for every 1 sq. � . of GLA, 1.6 sq. � . of BUA is required. The latest study reveals that the eastern region operates with MAR of 1.4; medium sized malls in north region operate at 1.8; whereas large malls in Tier 2 ci� es operate at 1.3.

MALLS ANALYSIS: NOTES

Key Statistics_Report ANALYSIS1.indd 29 11/10/2016 2:47:10 PM


SPECIAL FEATURE

WIDTH & DEPTH

THE CASE FOR EXPERIENTIAL

Why are Entertainment and Analytics the latest buzzwords among shopping centre developers in the world’s fastest growing major market? It’s all coming from a greater understanding of – and respect for – retail, as attendees at the India Retail Forum 2016 discovered.

BY NUPUR CHAKRABORTY

Over the last decade, the unprecedented growth of consump� on in India has driven an explosive expansion in retail and retail real estate sectors. As the fastest growing major market of the world, India today is not just an extremely a� rac� ve investment des� na� on for retailers and consumer brands, but is also a highly dynamic marketplace.

Populated by demanding, aspira� onal, globally-connected, and living-for-the-’now’ consumers, modern India has welcomed several global retail giants in the past 18-24 months, including GAP, H&M, Aéropostale, Bobbi Brown, Massimo Du , Burger King, among others. And this energy has led to rising investor sen� ment in the shopping centre development business.

GETTING SOCIALExperts assert that the retail real estate business today is not about crea� ng just malls; it is increasingly about crea� ng iconic social addresses and experiences. And if developers are doing any less, they are underserving the consumer.

Look at India today, and the tremendous rise in retail consump� on, And it’s not just consump� on that is exci� ng; it is the spillover from consumer spending that is more exci� ng -- the entry of interna� onal brands has meant that Indian brands have had to get their act together in unprecedented ways, and all of that is great for consumer. And what is great for the consumer is a poten� al boost for retail real estate.

Consumerism is the best trigger India has had for several years as an economy. Higher expecta� ons and aspira� ons from consumers are actually incuba� ng new ideas and businesses. For evidence, look at Startup India -- almost every startup innova� on today is about predic� ng what the consumer will want next, and how to pre-empt it. Read between the lines, and it is clear that the consumer is not just a shopaholic; he and she want experiences -- lifestyle moments in unforge� able environments that mix the smartest of everything -- products, brands, innova� on, technology, services, experiences. They want to shop, eat, entertain themselves and connect with life in intui� ve social spaces.

But, as far as entertainment goes, how do malls create compelling proposi� ons, given the high accessibility to digital entertainment op� ons most consumers have at the touch of a bu� on?

– John Schreiner, Senior Vice President, Theatre Development, IMAX

As retailers and developers, our competition is anything that consumers have the time and money to spend on. In order to diff use the rivals’ pulls, developers will have to pump in capital. But, the resultant additional footfalls and experience that this will deliver justifies the cost.

Our experience indicates that the youth, who are the primary consumers, continue to be value-oriented shoppers. As developers, we have to keep that in mind when finalising the tenant mix for our malls.

– Vishal Mirchandani, CEO – Retail & Commercial, Brigade Enterprises

– Amit Sharma, MD, Miraj Entertainment

For the DLF Mall of India, all Indian brands were told clearly that that they needed to present a reinvented retail version in the property. And they all – including Ahujasons, a high street retailer – complied in impressive fashion

– Pushpa Bector, Executive VP and Head, DLF Premium Malls Division

To assume that a small town consumer will be fobbed off with lower grade quality would be a mistake. Indians everywhere are fairly aware of what to demand. At Miraj, we do not lower the entertainment experience or quality; we downscale in terms of the number

Special Feature.indd 34 11/10/2016 3:13:21 PM Special Feature.indd 35 11/10/2016 3:13:31 PM

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