Successful malls now charge more than high street

CHENNAI: The first signs of mallseating into high street shopping is visible. The latter has always had the leadon rentals, but some malls are slowly changing the game. Industrysources say that rentals in Select City Mall in Delhi are at around Rs 500 persq ft per month, while high street Greater Kailash, GK to Delhiites, is goingfor Rs 450 per sq ft per month. In South Mumbai, Colaba Causeway rentals aregoing at 400 per sq ft per month, while High Street Phoenix Mall in Lower Parelcommands an average of Rs 480 per sq ft per month. Down south inBangalore, the undisputed high street, 100 Ft Road Indiranagar charges Rs 145per sq ft per month, while newbie Mantri Mall commands a much higher Rs 220 persq ft per month in rental. In Hyderabad, GVK One Mall in Banjara Hills quotes rentals of Rs 240 per sq ft per month and InOrbit Mall in Hitec City rentals are around Rs 225 per sq ft per month, while rentals in the plush Jubilee Hills neighbourhood don’t often exceed Rs 180 per sq ft per month. In Chennai, Kader Nawaz Khan Road which boasts of housing brands like Esprit, Tommy Hilfiger and Calvin Klein, charges between Rs 130 and Rs 160 per sq ft per month, while Express Avenue gets these brands to cough up anything between Rs 175 and Rs 250 per sq ft per month. The divide betweenhigh street and malls was clear, until few years back. The general perceptionwas that malls were for footfalls and window shoppers, but high street was wherethe real sales happened. With multiple malls coming up across the country , malldevelopers offers retailers lower rentals as an incentive to enter theirproperties. As for the high street, the supply was limited , the addresscoveted, the rent high and the attitude was take it or leave it.“High streets still command a premium given their limitedsupply and the fact that they attract serious shoppers. As a rule, they stillcharge more than malls. But now some malls that have become successful in thepast couple of years have begun to charge more,” says Tanuja Rai Pradhan,national head (research services) at Cushman & Wakefield, a real estateconsultancy. As the number of malls increased , rentals have movedfrom flat rates to revenue sharing models . Malls have also begun aggressivelycampaigning themselves as weekend destinations, and the combination of shopping,food courts, movies and live events all in an airconditioned environment hasbegun catching on. “Malls today generate sales, especially thosewith superior mall management which ensures good promotions,” says Monesh Bhojwani , AVP (retail services), Jones Lang LaSalle India. “However, jewellers , automobile showrooms and bank branches are possibly more skewed towards high streets as a category, since faster ingress and egress are of prime importance to such businesses.” Luxury malls like Delhi’s DLF Emporio and Bangalore’s UB City have been able to command a high price given the segment cater to and their business model. But other malls, until recently, could not command even on par with high streets. “Even traditional players like RMKV Silks have started looking at malls when they expand. In about four to five years, any good mall will be able to command as much as high streets. On the high street, most properties are owned by the retailers, thereby shrinking supply and this contributes to escalating prices,” says Rajesh Babu, chief consultant at RECS Group, a Chennai-based real estate consultancy. “People are beginning to see the upside of shopping in the comfort of a mall and that is the way forward for retail.” Fashion brands, particularly those that have entered the India recently, are leading the way in expanding in malls. “We find that people increasingly prefer the airconditioned comfort of the mall. Besides, there is so much to do in a mall for the whole family. And the parking, which is a nightmare on high streets, is taken care of in a mall,” says Darshan Mehta, president and CEO of Reliance Brands. Mehta is planning to take the store count from 12 stores for the five brands in their portfolio to 55 stores in the top nine cities – most of which will be in malls.