Vishal Krishna, Businessworld
\n 1 October 2011<\/i>
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An ineffable air of desolation and despair hangs over the Star \n City mall, situated on one corner of east Delhi’s Mayur Vihar \n Phase 1. Over three quarters of the retail space inside is empty \n glass-fronted shells, waiting forlornly for tenants. And by the \n looks of it, the wait has been on for a long, long time now. Few \n customers ever walk into the mall proper — and those who \n do, do not stay for long. A couple of liquor shops and a Café \n Coffee Day outlet draw much of the miniscule clientele that the \n mall can boast of. But these are transient visitors who do not \n linger.<\/p>\n
For there is really nothing that the mall offers in terms of \n shopping or entertainment options that will make a customer walk \n in and spend any time — no anchor departmental stores, no \n big brands, no multiplex theatres, no specialty shops, no electronic \n shopping zones, no playing areas for children, and not even a \n proper food court. There are a few eating joints and restaurants \n scattered on the ground floor. But these do not look as if they \n have ever been stretched by having to serve too many customers.<\/p>\n
A short walk away from Star City is the DLF Galleria — another \n shell of a mall, sporting the same air of pathos as its neighbour. \n Almost 90 per cent of its retail space is unoccupied.<\/p>\n
And yet, when Star City was being built, most analysts would \n have bet on it being a success. Its location is excellent — \n Mayur Vihar is a middle-income colony full of successful professionals \n who are ideal customers of many malls in Delhi and Noida. More \n importantly, by virtue of being right on the Delhi-Noida link \n road, and with a metro rail station adjacent to it, the mall was \n ideally positioned to attract traffic from both east Delhi colonies \n adjoining Mayur Vihar and the suburb of Noida. The Star City mall \n also opened with Reliance Retail as its anchor tenant three-and-a-half \n years ago, and that should have helped it attract other tenants. \n And yet, within months of its official opening, the footfalls \n had started falling and the decline had started. After almost \n three years as a tenant, even Reliance Retail abandoned it. And \n that accelerated the decline.<\/p>\n
What went wrong with Star City? The builders of Star City were \n unavailable for comment, but Reliance Retail officials say that \n there were many inherent problems. One of the biggest issues was \n that the mall was not — and is still not — actively \n managed. After building it, the builders had sold off shop spaces \n to individual investors. <\/p>\n
Many of these investors were not interested in improving the \n mall; they were simply looking to rent out the spaces they had \n bought. There was no mall management company or in-house operation \n that would get the tenant mix right and figure out ways to improve \n footfalls. And that was why it was just a disparate collection \n of shops with no specific zones for entertainment or food or clothes \n or electronics. It also did not have any multiplex tie-up or tenant \n who could pull in people to see movies, and then stay back to \n do shopping. Even though Reliance Retail was the anchor tenant, \n a shopper had nothing much to do within the mall once he had finished \n with that store.<\/p>\n
The Star City mall is not an exception in India’s booming \n mall landscape. Analysts at Crisil, Third Eyesight, Jones Lang \n LaSalle (JLL) India and Ernst & Young say that 80 per cent \n of India’s 255 malls are ailing, half of them very seriously. \n Look at Mumbai, Delhi or any other big city and you will find \n plenty of malls which are half empty. In Mumbai alone, the list \n is long — the Centre One mall in Vashi, which is 30 per cent \n vacant, the Kohinoor Mall in Kurla is 70 per cent vacant, and \n the Dreams Mall in Bhandup is 75 per cent vacant — to name \n only the more prominent examples.<\/p>\n
This is not to say that the mall culture itself is failing — \n there are many successful malls in Delhi, Mumbai and the other \n metros. But the issue is that the greater majority of the malls \n built are either pulling in indifferent business or worse, just \n fading away to oblivion. In some cases, malls are desperately \n turning empty shop spaces into banquet halls in order to survive.<\/p>\n
The issue, says Devangshu Dutta, CEO of Third Eyesight, a \n retail consultancy, is that few malls in India are “real” \n malls, planned and executed in the manner a mall should be. <\/b><\/p>\n
“Unless the builders view retail as a long term business, \n the quality of malls will not improve. Only 5 to 6 per cent of \n the malls in India are real malls,” says Dutta. The rest, \n he says, will either disappear or turn into mixed-use properties \n with offices to support their survival.<\/b><\/p>\n
Kabir Lumba, managing director of Lifestyle India, which is the \n anchor tenant in many of the successful malls around the country \n concurs with Dutta. Lumba says many malls neglected even simple \n research and common sense steps that would drive footfalls — \n and as a result, they are now in trouble.<\/p>\n
(Article continued below…)<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"
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