Tag Archives: Thrissur real estate

Retailers physical store expansion undeterred by online growth: CBRE

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China top target destination in APAC; Southeast Asia surges.

Sobha City Thrissur, Sobha Ltd, Thrissur real estate, Large format malls, retail spaces in Thrissur, Indian real estate news, India property market, India real estate newsmagazine, Track2Media Research, Track2RealtyGrowing online sales will not deter retailers’ physical store expansion plans in 2016, reports CBRE in its seventh edition of ‘How Active Are Retailers Globally?’, a study of over 150 major international brands based in Americas, Asia Pacific and EMEA.

While European countries dominate the target destinations this year, China is the top target market in APAC and the fourth most popular globally, with 27% of retailers looking to expand there. This is followed by Hong Kong in sixth position (24%), Japan in seventh (22%) and Singapore in ninth (21%). The top three globally were Germany (35%), France (33%) and the UK (29%).

Other key highlights for APAC:

  • China and Hong Kong maintained fourth and sixth place, respectively, whilst Japan (seventh), Singapore (ninth) and Australia (eleventh) all rose higher in the ranking, up from thirteenth, eighteenth and fifteenth positions, respectively
  • Most APAC markets saw increased interest for 2016 vs 2015, with the exception of China and South Korea which softened somewhat
  • Meanwhile, interest in Southeast Asia surged, with Malaysia (10%), Indonesia (9%), Thailand (8%), Vietnam (8%) and the Philippines (8%) all receiving more than double the interest they saw in 2015, when all markets secured between 1-3%

When questioned about the risk factors for them in the coming year, brands indicated that real estate cost escalation (56%) and unclear economic prospects (42%) continue to be at the forefront of their minds.

“We’re seeing more of a challenging economic environment, and concerns such as high operating costs and a lack of quality space means retailers are somewhat more wary this year. However, even as markets such as China and Hong Kong are seeing a slowdown, we see increasing numbers of opportunistic retailers looking to enter markets like Hong Kong, supported by strong underlying consumer demand. Japan and Australia remain attractive, while Southeast Asia showed strong growth due to opportunities for retailers around an expanding middle class and stronger economic growth,” said Dr Henry Chin, CBRE’s Head of Research, Asia Pacific.

“There are still opportunities for retailers to grow their business in the Asia region—as underscored by the region having four of the top ten most popular destinations worldwide. The goal now for all brick and mortar retailers is to build an engaging offer that encourages people to stay longer and spend more,” said Joel Stephen, Senior Director and Head of Retailer Representation, Asia at CBRE.

Physical stores still key

The survey findings show that 83% of brands suggest their physical store expansion plans for 2016 will not be affected by the growth of e-commerce. Meanwhile, from a retailer perspective only 22% of the brands are concerned about stiff competition from online retailing as a threat to their business.

At the same time, retailers are quite cautiously optimistic on physical sales network expansion. Out of those questioned, 17% have large-scale ambitions with many retailers looking to open more than 40 stores (up from 9% in 2015) in 2016. The vast majority (67%) are looking to open up to 20 stores.

“A physical store presence in key locations is still critical to the strength of a brand’s image. Stores still need to create an emotional affinity with shoppers, and customers still feel a need to go into stores, to physically touch a product and enjoy the feel-good factor associated with a particular brand experience. The store is integral to the shopping journey and can be used in a number of different ways, such as to click and collect, research of the product or brand, or to test the product. It isn’t solely about the transactional side,” said Stephen.

A new trend for 2016 saw a fifth of brands, largely from the Americas and EMEA, stating their intention to expand into travel hubs—such as airports and train stations—in 2016 as this will give them access to high footfall in busy locations. However, for APAC-originating retailers, shopping malls remained the most preferred destination by far at close to 90%.

Whilst globally the key concern for brands in lease negotiations was ‘lease length’, APAC-originated retailers were most concerned with turnover rent clauses as the most important characteristic. The region’s retailers were particularly concerned about changing consumer behavior (40%) which is higher than the global average (31%).

Location matters but can’t be sole retail driver

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Location is a key determinant for retail experience but it can not be the only USP of the malls, finds Track2Realty.

Sobha City Thrissur, Sobha Ltd, Thrissur real estate, Large format malls, retail spaces in Thrissur, Indian real estate news, India property market, India real estate newsmagazine, Track2Media Research, Track2RealtyLocation matters and so does a good understanding of the consumer market where a mall is located. Successful retail positioning relies on research into the local consumer market and securing anchor tenants. Once a mall opens, retail property managers must be proactive in asset management, maintaining an optimal mix of tenants and tracking retailers’ performances.

In his book ‘The Call of the Mall’ Paco Underhill writes, “Nothing exemplifies shopping more than the mall or shopping centre. It is the gift to personal consumption and the crossroad where consumer marketing, media and street culture meet. It is where the developed world (and increasingly everyone else too) goes to acquire, eat and hang out. It is where fashion trends are made, dreams are constructed and many people find their first jobs.”

This may have been written about the US malls but sounds perfect success mantra for Indian malls as well. The big question is whether Paco ever sounds like talking about location? Well, this is where the focus of Indian malls shifts and often the location alone is expected to be the retail driver.

With the footfall decreasing, sales conversion few and far between along with the emerging reality of e-commerce threatening the very existence of Indian store-driven retail, business was never as challenging for the retail spaces in the country as now.

The fancy idea of catchment area on the basis of just habitation in the neighbourhood has hit the retailers and the mall developers hard. While the poor access road and other logistical challenges were not addressed for long, the fact that hypothetical catchment area lead to over-supply of retail spaces in many potential areas played the dampener after initial experiment phase.

Now with the emerging realities of e-commerce, it seems the retail planners in this country will have to do some serious cost & benefit analysis. Analysts believe the problem with the first generation of malls in India has been that the developers by and large subscribed to the ‘build it and they will come’ theory. This has been a result of the inexperience in mall management because most mall managers are the same developers who built them. Since most of the developers did not have retail experience, the design and leasing control has not been ideal.

Col. Ashutosh Beri, Managing Director (West), Project & Asset Management, JLL India maintains that there are basic parameters that mall developers must keep in mind at the very conception and design stage of their malls. Location is, of course, a vital ingredient for the success of any mall. Approach and accessibility, especially in terms of proximity to the key centres and ingress and egress of the mall, are equally important. The mall must have adequate facilities and provide retailers with good accessibility to their stores, space for storage and staff utilities. Very importantly, it must get the parking equation right.

“The baseline philosophy behind the creation of any mall is that it must be a place that continually attracts people into its premises, keeping them engaged and tempting them to stay for longer periods. This cannot be done just by providing a massive number of shops. Today, Indian mall visitors expect various entertainment options and engagement mechanisms, as well. Malls cannot be just shopping complexes; they must be one-stop family destinations. If they fail at this, they invariably fail completely,” says Beri.

Abhay Kumar, CMD of Grih Pravesh Buildteck admits that the location can make or break mall. He, however, points out that the same location can be a liability also as it has often been noticed that certain locations attract the developers so much that there is an over-supply of same kind of retail spaces in the neighbourhood. This evidently suggests that the success of malls is dependent on a combination of factors working in tandem.

“I must admit that mixing the right location, brand presence and overall sales strategy is challenging and easier said than done. But then the business of providing retail spaces itself is challenging in the wake of stiff competition in the segment and ever evolving concepts like e-commerce that is increasingly gaining ground in the country,” says Abhay.

“Location, of course, is important and the concept of retail the world over is about the neighbourhood shopping,” says Sanjey Roy, DLF spokesperson. “But to think that the location alone will be retail driver is a misnomer and has misled many of the developers in the business of malls. Your mall has to have some USP that proves to be a market differentiator and acts like a magnet for not just attracting footfalls but destination shopping. However, there is no one-size-fits-all solution and every mall developer has to devise his own strategy,” Roy adds.

Dhiraj Jain, Director, Mahagun says the question of location reminds him the famous 4 P’s theory of Philip Kotler which has precisely stated Place has a distinctive role to play in the visibility of brand. He points out that the impact is evident from the footfalls that retail space attracts. The retail space will have customers’ traffic engaged in shopping, spending time with family and big corporate giants opening their offices there.

“Along with location, the demographic mix of the location plays a vital role in choosing the space. While the youth population looks for an entertainment zone, the elderly / matured community looks forward to spend their weekends in those malls where more food options along with sitting areas to relax with the family are available. Excellent connectivity to reach there at any point of time also adds to the footfall of the mall. The developer must also do a dipstick study of the kind of disposable income the target group is ready to invest on fashion, food and fun, so that they can accordingly do tie-ups with brands for operating the malls,” says Jain.

Amit Modi, Wholetime Director of ABA Corp admits that location has a huge impact in retail success of any brand/venture, as it is completely proportional to the retail footfall of the area and corresponding brands and ventures in the vicinity.

“As a Developer we only invest towards retail or commercial realty in case it has an assured return on investment potential for investors, both in terms of area location and area footfall. That is one of the reasons for including retail space in our housing project as the location offers guaranteed footfalls from the catchment area,” says Modi.

Mall strategy and speciality have been over-used term in the Indian retail history which now is nearly two decades old. However, in terms of the look & feel and usage of the customers most of the malls are pretty identical. Even in terms of the brand presence there is hardly anything that comes out as the differentiator; whereas the customers are looking for something tempting that could turn their casual footfall into compelling buying decision. Location, of course, is a key driver but the land or location competence alone can not substitute for the poor retail experience in a cluttered market with many identical malls in the vicinity.

Location Matters

  • Location is a key determinant for retail experience but it can not be the only USP of the malls
  • Location matters and so does a good understanding of the consumer market where a mall is located
  • Successful retail positioning relies on research into the local consumer market and securing anchor tenants
  • Once a mall opens, retail property managers must be proactive in asset management, maintaining an optimal mix of tenants and tracking retailers’ performances

Experiential shopping

  • Should be a gift to personal consumption
  • A crossroad where consumer marketing, media and street culture meet
  • A place where the developed world (and increasingly everyone else too) goes to acquire, eat and hang out
  • Where fashion trends are made, dreams are constructed and many people find their first jobs

Mall Magnets

  • Must be a place that continually attracts people into its premises, keeping them engaged and tempting them to stay for longer periods
  • Indian mall visitors expect various entertainment options and engagement mechanisms
  • Malls must be one-stop family destinations

Sobha Limited forays into commercial space with ‘Sobha City Mall’ at Thrissur

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Sobha City Thrissur, Sobha Ltd, Thrissur real estate, Large format malls, retail spaces in Thrissur, Indian real estate news, India property market, India real estate newsmagazine, Track2Media Research, Track2RealtySobha Limited has launched its first commercial Project ‘Sobha City Mall’ at Puzhakkal in Thrissur, Kerala. Situated at the heart of ‘Sobha City’- the first and the largest integrated township in the State, ‘Sobha City Mall’ will offer best-in-class retail and entertainment experience for the customers.

Sprawled over five acres, ‘Sobha City Mall’ has a built up area of approximately 4,50,000sq. ft., comprising of three floors of shopping space along with a basement for car parking. This is designed to offer an array of retail, entertainment and recreation options with a 6 screen multiplex, restaurants, food court and a gaming arcade. Further, the Mall is suitably located on the Thrissur- Guruvayoor State highway, making it effortlessly accessible from Kochi, Calicut and Palakkad and other neighbouring districts.

Speaking on the occasion, Ravi Menon, Chairman, Sobha Limited, said, “Thrissur has immense potentialities as a centre of trade and for being a banking hub. It is one of the most well- known markets for gold in India with thriving trade in textile. Having a number of engineering and medical institutions, it has come to be known as a centre of learning with a large floating population. The Sobha City Township spread over 55 acres is a unique sustainable integrated habitat where ‘Sobha City Mall’ will ably fulfil the retail, the entertainment and aspirational demands of the people of Thrissur and its vicinity. In addition, it will also provide about 2000 direct and indirect job opportunities to the local people.”

Further, he added that the launch of ‘Sobha City Mall’ signifies Sobha’s foray into the commercial segment (retail space leasing) in India. And that in the last 20 years Sobha has built a premium reputation for quality, aesthetics and timely delivery in the residential and contractual space. He said that Sobha will continue to maintain high standards in its commercial segment as well. “Thrissur has a vibrant atmosphere for organised retailing and we hope to scale up our operations in this space in the coming years,” added Mr. Menon.

The ‘Sobha City Mall’ will have over a 100 acclaimed brands – Lifestyle, Pantaloons, Van Heusen, Allen Solly, Peter England, Wills, Wrangler, Hidesign, Crocodile, Arrow, Louis Philippe, Lee Cooper, John Players and Subway to name just a few. Apart from these Marks & Spencer and Apple will also have exclusive outlets here.

On the entertainment front, the mall houses Inox cinemas- the first multiplex in Thrissur, with 6 unique theatres having a capacity to accommodate around 1400 people at a time. The 550-seater food court consists of 15 counters of Indian and international brands of various cuisines.  Moreover, the ‘Sobha City Mall’ comes with a spacious parking facility that can accommodate around 700 vehicles.

The mall design is kept shopper- friendly with single spine concept and a central atrium. The central spine has a lot of skylights which fill the interior spaces with ample natural light. The entire mall is protected & secured with CCTV surveillance and has a 4G Wi-Fi system at 65 mbps speed.

The ‘Sobha City’ township – in which the mall is located is spread over 55 acres. It comprises 720 apartments of which 432 are 3BHK, 288 are 4BHK, 48 villas and 4 exclusive bungalows. 432 apartments, 28 villas and the clubhouse have been handed over to the occupants.

A total of 1.18 million sq. ft. residential development has been handed over to the customers within the agreed handing over period. It is a unique development in Thrissur and one of the best examples of sustainable design.

The township development is uniquely designed on central place theory and has a man-made lake of 6.5 acres which functionally is a rain water harvesting tank, fulfilling the water requirement of the entire development.  It acts as a focal point around which the whole development is planned.

This man-made lake is one of its kind and the largest in the state collecting rain water from the entire township and retains it for various domestic and other uses. The ‘Sobha City Mall’ is strategically located by the lake to allow visitors to enjoy its breath-taking view. The lake deck acts as a vibrant space enhancing the overall shopping experience.

It is notable that traders and business people in the State of Kerala sell goods worth Rs. 1200 crore a day. The State accounts for 22% of total non-resident Indian (NRI) remittance to India; especially Chavakkad in Thrissur district has one of the highest numbers of NRIs. Additionally, Thrissur is the fourth largest city and the third largest urban agglomeration in Kerala. Furthermore, Thrissur has steadily emerged as the commercial hub for retail, real estate, Ayurveda and banking & financial services. Today, Thrissur City is also referred to as the Golden City of India as it manufactures 70% of plain gold jewellery in Kerala.

Real estate has always been a promising sector in Thrissur due to factors such as land availability, image of a clean and green city, upcoming educational institutions and tourism. In addition, Thrissur has medical colleges, engineering colleges and has a floating population as it is the nearest city to the Guruvayoor temple, which is one of the most important pilgrim centres in South India and is visited by millions of devotees every year.