With the vacancy levels hitting 28 percent, it is unlikely malls in Ahmedabad are going to do well in the next 3 years. Indeed, it is not just Ahmedabad; Diwali this time around has been so dull for malls in other cities as well. If this trend persists, malls across the country would be in trouble.
Analysts at Edelweiss, who did some window shopping last week, are wondering whether they were being just old-fashioned and spending time in the wrong (market) places. They concluded that could be a real possibility because e-commerce seems to be on a roll up 64 percent year-on-year, USD 2.3 billion sales, high visibility campaigns and big discounts. Also bigger financing and material.
“We do believe e-commerce is making a difference, but probably more material for phones and consumer durables. (But) we do also see other structural trends— traditional markets facing more pressure via large format/malls, less seasonality —more sales through the year —and rising credit card (cash back) offers,” they wrote.
It’s not that all malls in Ahmedabad or any other city are doing badly. The few well-located ones are drawing in the footfalls. But there’s little supply of quality malls, said Rajneesh Mahajan, CEO, Inorbit Malls, owned by K Raheja Corporation. A good mall should be spread over 3.5 lakh sq. ft.
‘Abhishek Sharma of Knight Frank, pointed out Ahmedabad One which opened in 2011, had revived the mall culture in the city. While there was demand for a good retail property, there is no supply in a suitable location, he explained. Brands like Zara and H&M are looking to open up stores in the top malls but the kind of space they are looking for is not available, Sharma said.
There are 3 major malls: Ahmedabad One, Iscon and Gulmohar Park mall, located in and around SG Highway, the city’s retail hub. The Balaji Agora Mall with an area of 3,00,000 sq. ft., located around 15kms away from the highway opened with a lot of promise but failed miserably because of poor zoning and leasing of the brands.
Moreover, the absence of a good cinema theatre added to the poor traffic. Some brands have preferred to set up shop on High Streets than to be in an under-performing mall.
Jayen Naik, senior VP, (operations), Ahmedabad One Mall, observed the retail mix at any mall was very important. Another extremely critical factor which a mall must deliver to both retailers and patrons is the shopping experience. “If your stakeholders go back content with their visit, they’re almost certain to come back,” he explained.
Several elements contribute towards delivering this experience; ease of parking, dining options at the food court, entertainment zones for kids and similar factors, which are crucial, yet easily overlooked.— The Financial Express