More than 10 Indian shopping malls have been shuttered or converted into office space in the last two years – most of them in Mumbai.
And more – like the Nirmal Lifestyle Mall in Mulund, central Mumbai, and Centre One, the oldest mall in Vashi, New Mumbai – have announced its imminent closure.
Nirmal, which opened in 2003, employed 5000 people at its peak. Today it is a shadow of its former self, most retail spaces empty, apart from some foodcourt tenancies.
Dharmesh Jain, head of Nirmal Lifestyle, said the centre is no longer viable to run.
“It is difficult to sustain and run it because of rentals and maintenance charges.”
It will be converted into residential space.
In 2013 research from the Associated Chamber of Commerce and Industry of India found up to 52 per cent of Mumbai malls were lying vacant and even higher percentage in Delhi. Experts says the majority of failures relate to faulty designs or a lack of strong brand tenants.
Local media report that Kandivli’s Raghuleela Mall is on the brink of closure, with a shrinking tenant base and occasional electricity cuts. Bhandup’s Dreams Mall is on borrowed time and Santacruz’s Milan Mall closed. Recently, Navi Mumbai’s oldest mall Centre One announced its impending closure.
The casualty list also includes City Mall and Mega Mall in Andheri, Dreams Mall in Bhandup in the central suburbs. Kohinoor mall in Kurla has a question mark over it. In Bengaluru, va Mall in Brigade and Sigma Mall in Cunningham Rd have closed.
Other malls in NCR and Bengaluru face a similar fate.
In fashionable, Navi Mumbai, a satellite city of Mumbai, the Gold Souk Mall, Wedding Mall and Palm Beach Galleria have been converted into office complexes or motor vehicle showrooms.
Consultants report at least four malls in the Delhi/NCR area, most in the suburbs of Rohini, Vasant Kunj, Pitampura and Gurgaon, are empty and bearing for sale signs.
Retail real estate specialists say most of the malls, built during the early 2000s, have “lost relevance” to consumers today spoilt for choice by malls that are better designed and considerably larger.
Anupam T, malls CEO with Runwal Group, which runs four malls in Mumbai including the 1.2 million sqft R City, cites Centre One as an example. It has 120,000sqft of space and a foodcourt with just 200 seats. Its trade was decimated when the giant new Inorbit, owned by the Raheja group, opened.
“In 2003, smaller malls were fine. But in 2013 and 2014 when the average size of malls is 500,000 sq ft and big malls are above a million sq ft, smaller malls find it difficult to survive.
“Unless small malls are sharply positioned and differentiated, they will fade away,” he added in an interview with the Business Standard.
Future group president Rajan Malhotra says there is a limit to the number of malls a catchment can take.
“Initially, malls exist in monopoly conditions. The moment bigger and better malls come up in the same locality, shoppers go there.”
There are signs the Indian property sector is recognising the problem and a once frenetic race to open mall space to satisfy India’s rapidly rising middle class has slowed to a crawl. In 2014, just 2.4 million sqft of new mall space was completed, a mere seven malls, far less than the 4 million to 7 million sqft annual average between 2009 and 2013.
