“Delhi-National Capital Region (NCR) is the default mall capital of India, since it has nearly a hundred malls, with best performing malls in the region enjoying a low average vacancy of around 10 per cent,” a top official of JLL says.
According to Pankaj Renjhen, managing director (Retail Services), JLL India, no other city comes close to the number of operational malls that are found in Delhi-NCR.
In the top seven cities of India including Delhi, Mumbai, Pune, Bangalore, Kolkata, Chennai and Hyderabad, there are around 255 operational malls.
“While, in Delhi NCR alone, there are around 95 operational malls out of which 12 malls are successful and is currently best placed for hosting successful, large-sized malls,” Renjhen adds.
The success rate of malls varies, usually depending on factors like design and layout, the mall’s brand positioning, location and how well they cater to the needs of their target segments.
“Also, whether or not they have been able to evolve into family destinations rather than just remaining shopping centres plays a big role,” he observes.
Malls are graded according to their average vacancy levels and rentals and the rentals are in indirect proportion to the vacancy levels.
So, while rentals are high in malls with vacancy levels of 10 per cent or less and low in those with 20-30 per cent vacancy levels, they are poor in malls with average vacancy levels of 30 per cent or more.
He further adds that leading malls enjoy the privilege of deciding on which brands to house, and continuously monitor all stores in case they follow a revenue share model.
These also see a churn, with non-performing brands being weeded out within short periods of time and others forced to shift floors or move elsewhere within the premises, so that better-performing brands can be accommodated.
Global and leading Indian brands either prefer to lease spaces in premium malls or go in for high-street retail locations and are even willing to wait for vacancy in premium malls.
Professional tenant management teams are employed by some of the most successful shopping malls in NCR, like Select City Walk in Saket, Ambience Mall in NH-8 and Vasant Kunj, DLF malls in Saket and Vasant Kunj, etc.
They evaluate placement of different brand retail stores, revenue targets to decide continuation of lease agreements, branding, and promotions and customer outreach events in the atrium.
Renjhen shares that location is an important differentiating variable between most of the successful malls in NCR and their less spectacularly performing counterparts.
Citing an example, he says, “If a mall is situated in or near a high-street retail location, it tends to perform poorly. By the same coin, malls operating in locations away far away from high-street retail perform much better.”
“Good examples of this would be the Ambience and DLF malls in Vasant Kunj and MGF Metropolitan on MG Road, Gurgaon,” he notes.
He continues by saying that successful malls know how to effectively manage each square foot of available space and having the right combination of all important factors is always a top priority for them.
Renjhen is of the opinion that any upcoming commercial or residential area in NCR will work best for any future mall supply in the region. He feels that Golf Course Extension road in Gurgaon, Dwarka Expressway and New Gurgaon sector beyond the second toll plaza on the NH-8 are some of the other locations which will work best for any future malls.
