By the end of 2008, as many as 41 more malls will have come up in the National Capital Region. New Delhi would be adding at least another 25 malls with a built up area exceeding 50 lakh square feet.
By 2007 end, 26 of the 41 malls should be operational in the NCR. According to KSA Technopak research, the organised retail industry stood at $6.15 billion in 2004 and is projected to be at $24.75 billion in 2010.
Referring to this as obviously good news for all the mall developers and operators, Sanjay Verma, joint managing director, Cushman & Wakefield said the number of Indian and international brands would multiply in the next few years.
While there is no denying that a clear demand exists for this organised retail space, a lot more needs to be done than simply constructing malls, said Arvind Singhal, chairman, KSA-Technopak.
He added that failure of malls could most probably be attributed to the absence of planning by developers and the cost model adopted by them. For example, if there are too many malls -- as in Gurgaon -- there is bound to be a problem.
The road that Singhal is referring to already has five malls and one neighbourhood shopping complex. There are another four malls being planned there.
The root of the problem, as perceived by retail analysts almost unanimously is that mall developers main interest is in constructing malls and selling/renting of space.
Problems with infrastructure, such as inadequate parking, is a direct consequence of this practice, reasoned Singhal.
Verma said developers have to be as involved with the shopping in the malls as with their construction and letting out of space. The mall business cannot be just another real estate venture.
For example, if a developer determined monthly rentals as a fixed percentage of the turnover, it would be in the shopkeeper's and the developer's best interest to ensure good infrastructure and good conversion of footfalls.
This would also fix another problem. Typically, rentals should not comprise more than 10 to 12 per cent of a shop's turnover.
Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group
© 2025