Delhi-based realtor Parsvnath Developers is living the industry slowdown. It has moved its head office from the expensive Barakhamba Road in Connaught Place to its retail mall in the not-so-fancied Shahadra, across the Yamuna in East Delhi.
"We have shifted our operations to Shahadra. Only the marketing department is still at Connaught Place," company chairman Pradeep Jain told Hindustan Times.
Parsvnath had in 2005 announced an investment plan of Rs 160 crore to build 13 metro malls across metro stations in the capital. Now, in an apparent mood to adapt to the changed market conditions where offices command better demand than upscale retail space, the company has named its Shahdara property as ‘Shahdara Metro Tower.'
This move will help Parsvnath to cut its rental expenses at Connaught Place, though Jain said the shift was done more to get space than save on rentals.
According to realty consultant Cushman & Wakefield, at an average rental price of Rs 328 per square feet, Connaught Place is the sixth most expensive office area in Asia.
Parsvnath has 23,000 square feet of office space on lease in two Grade B buildings — Arunachal and Vijaya Building.
“We needed 50,000 square feet in CP, which is currently unavailable. Hence, we are shifting to Shahadra, which has 1 lakh square feet space,” Jain said.
The present office in Shahadra was originally created with the idea of establishing metro mall. However, the idea failed to take off. Though located at a terminating point of Delhi's prestigeous metro railway, Shahdara is often seen as a shanty-town zone, and not connected with the kind of lifestyles linked to malls.
“The mall lacked the right mix of products in the mall to attract metro-users”, said Raghav Gupta, President of Technopak, a retail-consulting firm.
“People commuting by the metro are mainly office-goers and shop not for expensive items at malls but daily need-based commodities (consumer goods),” he added.
Parsvnath has been under pressure to cut cost. The company last week pulled out of its ambitious Chandigarh film city project, and put on hold its 12 SEZ (special economic zones) projects.
Realty major Unitech had last month put up its office space in Saket in the Capital for sale, to meet its swelling debt obligation of Rs 2,700 crore by March 2009.