Can Malls resurrect?

I went to a once-upon-a-time popular Mall in Chennai a week back – to watch a movie at Inox. I went 10 mins before the show began; during the intermission, I bought a Samosa and Tea for Rs. 200 and left the venue just after the film ended. There was nothing for me in the mall to hang around. No coffee shops, interesting retail concepts, a poorly scattered food court and absolutely uninteresting Mall Management. The toilet was a saving grace, neat and clean as always. 

Chennai Citi Centre was one of the earliest new-age Malls in Chennai which opened almost a decade back. Compared to the previously popular and hugely successful Spencer’s Plaza, Citi Centre managed by the ETA Group preferred to lease retail spaces as against selling them like Spencer’s. The initial euphoria was huge – located on RK Salai leading to the world-famous Marina Beach and the road being used by two former Chief Ministers of Tamil Nadu viz., Dr. Karunanidhi and Dr. J Jayalalitha for their daily commute. The road was in its best form all these years with Traffic Police stationed all day and night as well as reasonably safe. The Mall opened with Chenai’s iconic Landmark Store, Lifestyle and Inox as anchors followed by Foodworld, Mc Donalds & KFC in the food court and roof top; a slew of national and international brands followed. The “Marina” food court had some interesting concepts offering a range of food and beverage options. Café Coffee Day was conspicuously missing inside. Instead, CCD opened a café right opposite the Mall which continues to be a crowd puller. The Atrium would be used for interesting events and activities.

A few years in to it’s bull run, Express Avenue Mall opened 3 kms away, followed by Phoenix Market City two years back. With a spread of no more than 2 lakh sq.ft for Retail and F&B, Inox Cinemas spread over 30,000 sft, private Office spaces spread over 20,00 sft. and two levels of basement Car Parking, the Mall had little to offer in terms of retail space. As always, Small is Beautiful. Plus, it had a great locational advantage. But the Mall Management let the mall die a slow death for reasons best known to them. Almost all the original Retailers have vacated but for Basics Life and Giordano apart from Lifestyle and Inox. I approached the Mall Management two years back and suggested we could do wonders with what we have on hand and give a run for money due to its locational advantage and easy access to South Madras. They refused to oblige and have remained adamant on letting the opportunity pass by. Even now, the mall is sitting on a gold mine, if only one could take a serious look at what could be done to make it great, once again. 

Citi Centre is not an isolated case. During the Mall boom in India between 2006 – 2012, about 800 Malls of all shapes and sizes were operational at its peak across India’s Top 50 cities & towns. Thanks to a slowing economy since 2013 onwards, uncertain consumer sentiment and tough business conditions, more than half of them have shut down or have morphed in to Office spaces. A recent research report suggested that the Mall vacancies have improved off late and over 80 Malls are expected to open in the next 24 months across India. As we speak about this, VR Chennai opened its doors to the city just a month ago, spread over a million sft. 

So what happens to these Malls which do not get the desired traffic (of customers) anymore? Many people compare this situation to the Ghost Malls in the US, which I believe is not fair. The Indian Economy continues to show strong signs but for some shortfalls here and there. Older Malls can be resurrected, if only the Mall Owners prefer to do so. In our country where most of the Malls are owned by Real Estate companies, their only focus is generating a certain “revenue” per sft. Taking an extra mile to get consumers walking in regularly and keeping them hooked – this is no rocket science. Can be done pretty easily at much lower costs with very minimal efforts. Add to this, inefficient Management Teams in many cases who have never worked earlier in Malls or have a deeper understanding of Retail dynamics. Just that the Mall Owners must come out of their slumber and their fixation for a certain “fixed” revenue model and consider Professional Management. Malls are community centers and Mall owners must connect with the consumers and not just their bank a/cs.

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We are Chennai…

It was long pending but took a drive all the way up to the latest entrant in Chennai, the newly opened (partially though) VR Chennai, a Retail Centre spanning over 6 lakh square feet (in the first phase) adjoining the outer ring road, just outside the acceptable (hic!) city limits.  Planned and executed by Virtuous Retail, a Mall Management Company which has its Mall's presence at Surat, Bangalore and Punjab, the Centre is almost an oasis, what with a fantastic spread of Retail, F&B and Entertainment Opportunities in the anvil. 

The Mall is located north of Koyambedu, west of Anna Nagar and just after the Arumbakkam flyover. That this place existed for a huge strcture such as a Mall to come up came us a surprise to many in the city including a lot of Retail Professionals. 

So why does Chennai need yet another Mall while the existing ones are not providing double digit returns to Retailers? Why yet another Multiplex while the number of cinema goes has been steadily decreasing over the years, thanks to alternate entertainment options such as OTT Apps? Why should Brands invest heavily in yet another Retail  experiment (of sorts) while the existing Retail spaces are yet to be fully sweat?

Frankly, I have no answers on behalf of the whole of the Retail Fraternity. But here are my observations.

Chennai has historically been a high-street market, despite the so-called evolution and revolution of Malls and Shopping Centres in India since 2006. One of India’s first shopping centres came up at Chennai in the late 1990s – the iconic Spencers Plaza. It was a welcome break for shoppers who would otherwise throng the likes of T. Nagar, Purasawalkam fraught with heat and humidity while Spencers (as it was nicknamed) was the first a/c mall in India (Crossroads was just coming up in Mumbai but had entry restrictions while Ansal Plaza in Delhi was non A/c). Spencers was a super hit from day one with the second and third phases coming up in bursts but that’s when the High street Market continued to dominate and thanks to a property-ownership model at Spencers, leasing larger spaces was a challenge. And the mall slowly lost its sheen.

For a city of its size, there are just three malls of a reasonable size & scale -  Express Avenue, Phoenix Market City and Forum Vijaya Mall which together have about 20 lakh soft of actual Retail (minus the Cinemas). Interestingly, these three Malls form a nice Triangle while seen on a Map. The earliest entrant City Centre (Mylapore) failed due its own inefficiencies while the Ampa Mall (Arumbakkam) did quite well in its early years and slowly added fatigue & monotony; A suburban Grand Mall (at Velachery) sitting on a gold mine lost due to internal challenges of choosing the right sort of Clients. Then there is a Marina Mall on OMR which is yet to take off fully while the Spectrum Mall at Padi is a non-starter. MARG, the construction to research conglomerate lost out on a fantastic opportunity with it’s Mall structure half complete and lying idle for more than 5 years. 

So why a new Mall now?

I personally think that this Mall is a breather for Shoppers to avoid the congested bylanes of Anna Nagar and its periphery and head to this wonderful premises instead where they get an equal share of shopping, dining & entertainment.  For Retailers, this is a boon come true of sorts. Reason: The city had expanded in the deep south on OMR a decade back; it expanded towards Tambaram five years back. However, the western suburbs have been neglected for long. With so many thousands of people heading to work all the way up to Sriperumbudur daily, there is a huge chunk of middle class settlement happening in this part of the city. Also, there are very few options where a discerning Shopper gets satisfied with variety which VR Chennai is sure to offer.

I hope PVR Cinemas open soon, with a slew of films slated to release starting with Kamal Hassan’s Viswaroopam in August all the way up to November when Superstar Rajnikanth’s 2.0 will release after the recent Kaala. Now the question is will they be able to fill the cinemas, especially with newer challenges every day.