Select CityWalk, a popular shopping destination in New Delhi, has about 8 percent of its space under fit-out for new stores.
“In the last 15 days, we have seen heads of several international brands visit the mall and the plans for expansion and fit-out are back on track,” said the mall’s executive director and chief executive officer (CEO) Yogeshwar Sharma.
Many shopping malls have space under fit-out, a term used for the process of making stores ready for occupation by retailers, who are expanding their outlets rapidly with the return to the ‘old normal’ as COVID-19 cases drop and shoppers throng the malls.
The malls had been bereft of shoppers for much of the past two years because of lockdowns and government-imposed restrictions aimed at curbing the spread of the pandemic. That’s beginning to change with footfalls in the malls nearing pre-pandemic levels.
Footfalls are at 80-85 percent of pre-COVID-19 levels and sales are already at pre-pandemic levels, said Mukesh Kumar, chairman and director, Shopping Centres Association of India and CEO, Infiniti Mall.
“The sentiment is very positive and we are going to witness a healthy growth of 10-12 percent in footfalls from the coming quarter onwards,” Kumar told Moneycontrol. “The brands are also looking for spaces now with the revival of demand.”
Shopping malls experienced a recovery during the festive season last year as shoppers returned with the ebbing of the pandemic’s second wave, but celebrations were cut short by the onset of the third wave.
Mercifully, the impact of the third wasn’t as severe as that of its predecessors.
Expansion spree
In the last two years, several retailers rejigged their strategy to focus on high-street outlets, which weren’t as badly affected by lockdowns and restrictions on the movement of people as stores located in the malls.
That trend is beginning to change. DLF Shopping Malls, which operates DLF Mall of India, DLF Promenade and other shoppers’ destinations in the Delhi-National Capital Region (NCR), has 70 stores under fit-out “as we speak,” said Pushpa Bector, executive director.
“There is a lot of energy in the market. Several athleisure and sportswear brands such as Nike have opened large-format flagship stores; we are seeing several new launches in the food and beverages segment and the Canadian coffee brand Tim Hortons also plans to open outlets,” said Bector.
Several retailers have also used the opportunity to grab prime locations that loss-making brands exited, unable to pay rentals.
"Going ahead, we will be looking at an aggressive growth plan for our lab-grown diamond brand DIVAA by ORRA and a majority of these stores will be in the mall format," said Dipu Mehta, managing director and promoter of ORRA Fine Jewellery.
The company recently launched a DIVAA by ORRA store in Palladium Mall, Mumbai.
Shaving products to snacks
Men’s grooming products retailer Bombay Shaving Company has been on an expansion spree and plans to increase its presence from 50,000 to 200,000 selling points across India in the coming quarters.
According to Shanky Chauhan, head of sales at Bombay Shaving Company, shopping malls are going to be intrinsic to its offline expansion strategy.
“In the last two months, we have started our own exclusive branded outlets in malls, already opening and launching four of them in Delhi-NCR, with plans to launch 12-15 more in top metros in the coming quarters,” he added.
4700BC, a premium snacks brand owned by PVR, is also looking at expanding its presence across shopping malls starting in April, said its founder Chirag Gupta. The brand currently has 23 shop-in-shop outlets and four stores in malls.
No more waivers
As they weathered the pandemic, shopping centres had to offer rental waivers to retailers to keep them on their premises.
DLF Shopping Malls, in the first quarter of FY21, waived the minimum guarantee (MG) rental for its retailers. In Q2, it offered a 70 percent rebate on MG rentals to food and beverage outlets and a 50 percent rebate to other retailers.
Inorbit Mall and Nexus Mall also gave rental waivers to their tenants.
With the ebbing of the pandemic, the tables have turned in favour of shopping malls, with retailers keen to grab space and launch new stores.
“About 5-7 percent of space is going through a churn in several major malls,” said Pankaj Renjhen, chief operating officer and joint managing director, Anarock Retail.
In percentage terms, the area exited by tenants may not be very large because multiplexes and other large anchor stores have stayed put, but even in terms of brands, about 10-12 percent of retailers have moved in and out, he said.
“Well-capitalised retailers have used this opportunity to expand aggressively and malls to churn out weak tenants,” Renjhen said.
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