Future Retail Capital of the country

Future Retail Capital of the country
Growth of retail in any market is directly proportional to the increase in the gross domestic income of the residents. With the retail sector in Bangalore growing at an annual rate of 45 percent, the City today figures among the list of preferred launch markets in the country, finds out Bindu Gopal Rao.

The retail market in south India was valued at Rs 2,62,930 crore (as per 2006 prices). Of this, the size of the organised retail market in 2006 stood at Rs 12,825 crore, representing 4.9 per cent of the total retail market.
According to ‘The South India Retail and Realty Report: 2015 and Beyond’ brought out by international real estate consultants Cushman & Wakefield for ‘Images Retail’, quality real estate space is a key concern of the retail sector in India.

The supply of shopping centre space in south India was at 14.1 million square feet in 2006-07, accounting for an increase of about five million square feet space in 2004.

Retail city!
Well, that’s not just number crunching, but a good indication of how retail is poised to grow in the city of retail dreams — Bangalore. Buoyed by a vibrant real estate industry, retail in Bangalore is now poised to enter the next stage.

Backed by high consumer demand, rising income levels and changing lifestyles, local supermarket players such as Reliance Fresh, Subhiksha, Food World, Spencers, Dailys and Fab Mall have aggressive plans to expand their consumer base.

Says Karun Varma, Local Director, Corporate Solutions – Jones Lang LaSalle Meghraj, “In 2Q07, two new malls, one in the CBD and another in the suburbs, were opened to consumers. Cosmopolitan Mall, with a built-up area of 150,000 sq ft (13,935 sq m), and Lido Mall, with a built-up area of 85,000 sq ft (7,896 sq m), became operational this quarter. Cosmopolitan Mall will cater to the catchment areas of the Whitefield micro-market, while Lido Mall will serve the larger catchment area surrounding the CBD. Vaswani Group’s Cosmopolitan Mall is being fully leased by a single occupier —the Future Group — for its flagship apparel brand, Pantaloons.

On the other hand, Lido Mall has various tenants and houses medium to high-end retailers such as The Body Shop. Presently, there is 4.6 million sq ft (428,283 sq m) of mall space under construction across the various quadrants of Bangalore entailing 12 malls. This supply is expected to be complete by end-2008. The landmark retail project — UB City Mall on Vitthal Mallya Road, a prime location in the city — is expected to be operational in 4Q07.”

The Bangalore International Airport (BIAL), set to become operational by April 2008, has its own share of retail space. For the first phase, BIAL has two spaces of 1,750 sq m for international travel retail and duty-free; and 450 sq m of mono brands parcel for domestic travellers. The second phase would be offered in the first half of 2007. According to BIAL, the shortlist for the retail package includes the Nuance- Shopper’s Stop combine; the DFS Group; Dufry International; Alpha Airports Group and Gebrueder Heinemann - Oberoi Group, Pantaloon Retail, HMSHost; SSP International - Radhakrishna Hospitality Service of Mumbai; Global Franchise Architects (Coffee World/Pizza Corner); Cafe Coffee Day and Skygourmet, among others.

Right proportions
Says Amit Bagaria, CEO and Chairman, Asipac Group, “Growth of retail in any market is directly proportional to the increase in the gross domestic income of the residents. So, retail in Bangalore has been growing. A negative growth in retail is directly proportional to the degree of ‘greed’ of real estate developers, retailers and strata investors, which is also catalysed by brokers who refer to themselves with fancy suffixes such as IPC. Since the greed has been at the highest degree in the last couple of years, we are soon going to witness negative growth.”

Incidentally, the retail sector in Bangalore is growing at an annual rate of 45 percent.

Launch market
The city today figures among the list of preferred launch markets in the country. Commissariat Road for example, home to retail majors like Bangalore Central, Garuda Mall, Shoppers’ Stop, Home Stop, Globus and Lifestyle, has upstaged other new mall centric retail hotspots like the National Capital Region’s Mehrauli-Gurgaon Road and Mumbai’s Malad Link Road.

The first four months of 2007 have seen this high street clock an average of Rs 4.5 crore in daily billings. Average sales per day for the January-April period from the Mehrauli-Gurgaon Road stood at Rs 3.6 crore, while for the Malad-Link Road it was Rs 2.9 crore, according to a survey by real estate consultant Asipac Group.

The Gopalan Group is another major player in the retail space in Bangalore. “New shopping and entertainment concepts bring a complete lifestyle experience to local and international customers. Our cutting edge residential, commercial and now retail space design and architecture, is what sets us apart,” says Prabhakar, Director.
Each of these spaces are located strategically within the central business district, close to mid and high end residential communities, and high density areas guarantee a stream of profitable markets.

“We maintain and manage each shopping centre according to target customers and the surrounding environment. Our enduring presence for the past two decades in the real estate industry has proven our commitment and reliability as a developer,” adds Prabhakar. Incidentally the recently opened Gopalan mall is a first-of-its-kind mall with the country’s traditional and non-traditional retailers in a refreshing indoor-outdoor mall setting. Factory outlet stores and discounted retail formats stores are typically found in less accessible locations. However, this is a one-stop self-sufficient shopping centre that offers shopping and dining options in apparel, accessories, home furniture and hypermarket.

Today large builders like Brigade are also into the retail space. The Orion Mall at Brigade Gateway in Malleswaram-Rajajinagar will feature specialty outlets, services and restaurants, to address the growing lifestyle needs of a vast segment of the population. Some of the main anchor stores that have been finalised are Westside, Star India Bazaar and Landmark. PVR Cinemas will manage the multiplex. Orion Mall has been designed by H.O.K., New York — also the architects who conceptualised the master plan of Brigade Gateway. The mall’s exciting mix of retail, food and beverage, and entertainment outlets will be complemented by extensive landscaping and plenty of open spaces. Retail is poised to move to another level in the City.

With so much happening here, it will only be a little while before Bangalore will come to be known as The retail capital of India.