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Malls turn many-splendoured

Throwing in spas, offices, hotels and by-invitation-only floors to boost revenues, mall owners are going beyond the beaten path of fickle footfalls that drive retail sales. Varun Soni finds out more.
Hindustan Times | By Varun Soni
UPDATED ON APR 13, 2008 11:20 PM IST

Catching the attention of the discerning customer or tiding over the slowdown affecting the realty sector? Call it what you will, but mall developers in the country are resorting to innovative concepts to stay afloat amid competition. The idea is to play on customers who love conveniences or luxuries — or engender a feeling among customers that they are someone special.

Innovations adopted by developers include malls-cum-hotels, throwing in facilities like spas inside shopping centres, and even making entry to certain floors “by invitation only” in a bid to project the properties as high-end.

Experts feel that by adopting these concepts, builders are able to not only maintain their foothold in the business and rake in profits, but also manage to get investor funding.

The latest trend involves including health clubs and spas inside malls. For instance, the Ambi Mall in Gurgaon has signed up with Fitness First of Thailand to open a spa inside its mall.

Apart from this, the mall is even going to have 100 shops spread over two to three floors access to which would require an invitation. “These floors will house luxury fashion and interior brands, an art gallery and a club lounge. We are also planning to have the country’s first beer garden, an exhibition centre, a five-star hotel and service apartments inside the mall,” says Raj Singh Gehlot, Chairman and Managing Director, Ambience.

Making malls out to be something more than centres for shopping, eating out or watching movies is gaining currency fast. Throwing in business hotels, or even offices, with the basic push of retailing is catching on as a trend. Given the shortage of hotels, this helps builders reduce room tariffs while boosting the viability of their business that relies on fickle footfalls that often do not translate into profits.

Delhi-based Ansal API has tied up with Ambience Hospitality Management Pvt. Ltd. to set up 30 hotels in the country over the next 10 years. Apart from including palace hotels, golf resorts and five-star properties, the new venture will build a number of business hotels located inside malls across the country.

These business hotels will have options for short and long stays in the form of studio apartments as well as suites. “With the mall already having beauty salons, food courts and a multiplex, a hotel inside a mall does not need to include such offerings. This will enable us to reduce the tariffs of the rooms which also works out to be a viable business proposition,” says Sushil Ansal, chairman, Ansal API.

The Galaxy Mall behind the 32nd Milestone entertainment complex in Gurgaon has converted its upper floors into a hotel while keeping the mall to the ground and first two floors above.

The developer resorted to this after the mall had been fully constructed, fearing that the increase in the number of malls coming up in the township might not augur well for him. DLF is also said to be planning to make a mall-cum-hotel in Saket, south Delhi after tying up with Hilton Hotels recently, though company officials are not officially confirming this.

Similarly, a budget hotel by European group Accor in Gurgaon under its Ibis brand is going in for a vertical split — one half will be rented out to offices and the other will be a budget hotel. This is being done primarily because the plot on which the hotel was going to be built was large and could incorporate two developments.

Says the spokesperson of Emaar MGF, which is also following this trend all across its mall properties in the country, “It is a different concept and we believe in the suitability and functionality of it. As India’s consumer economy grows, hospitality and retail sectors are also witnessing a sea change. Innovative concepts like mixed use of malls and hotels will find greater acceptance as retailers discover the necessity for product and brand adjacency, consumer activation on the shop floor and mall ambience that promotes a sense of freedom and accessibility equally to everyone.”

The MBD Neopolis at Ludhiana and the MBD Zephyr in Bangalore are two other prime examples of mixed-use malls. Both the malls include luxury retail outlets and a luxury hotel, in addition to entertainment facilities.

Punjab-based Chadha Group is also building a mall-cum-hotel at Mohali. Says Monty Chadha, Group Director, The Chadha Group, “The concept of multi-utility malls helps the developers to convert/club same premises into offices as well as shopping, which generally happen in international markets in non-shopping areas.”

Similarly, the MSX Mall coming up at Greater Noida, spread over an area of 6,00,000 sq ft. will boast of 80 serviced apartments, a business centre with conference rooms, secretarial facilities, a gymnasium — and even a swimming pool.

Says Sandeep Goel, Managing Director, MSX Developers Pvt Ltd., “Gone are the days when there was very less traffic flow from Indians in five-star hotels, which no longer depend mainly on foreigners. With the spurt in buying power, about 50 per cent of the target customers are domestic. This has made builders sit up and think of multi-utility malls, a trend that is here to stay simply because of the growing demand for such services. For hoteliers, it serves best to be present at a premium location at relatively lower costs and have assured footfalls even on leaner days.”

Joining the trend is Zoom Developers, which is planning to build a 100-storey tower in Kochi that will be home to a mall, offices and service apartments.

Says Sanjay Kackar, chief operating officer (sales and marketing), AEZ Group, “There is no denying that the Indian property market is getting mature and we are building projects on the global pattern. As far as multi–utility realty projects are concerned, there is a method in the madness. Most of the foreign investment in the realty sector is targeted towards retail opportunities and to meet the growing retail needs, you need to have such facilities in the same complex.”

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