Merging dream with a social cause

Retailer: What kind of opportunities have you seen in the real estate sector that has made you to venture in the same? Is it just a part of your business expansion or did you simply fulfill your long cherished dream of becoming a real estate developer?

Dhirendra Madan (DM): It was my long cherished dream of personal interest clubbed with disposing social responsibilities towards the different sections of the society. I have always wanted to see Jaipur as the real estate global destination, in terms of lifestyle living complimented by the lifestyle shopping. Three malls, which are operational, and four under construction have really helped in changing the skyline of Jaipur. It has also been our group’s endeavour to provide affordable luxury living to the middle and lower middle section of the society.

Retailer: Being a pioneer mall developer in Jaipur, how did you experience the first mover’s advantage?

DM: For being a pioneer, instead of getting any kind of advantages it was rather very difficult challenge to educate and create awareness among the people about the mall culture and the associated concepts of a mall as there are many operational and infrastructural differences between a mall and semi-organised shopping complexes. For the last five years, the concept of mall culture has really gained momentum and will continue to see steep growth in coming future since time strapped people will prefer mall over other retail formats for its convenience. 

Retailer: After developing three malls in Jaipur, there is another project - the construction of Triniti mall in Jaipur, which is presently going on. How the mall will be different from three other malls?

DM: Triniti is completely based on Mediterranean shopping experience. It is an eco-friendly concept with low maintenance cost, which will be one of its kind project in Jaipur city. We also plan to work on minimum guarantee with revenue sharing modules with the renowned brands. 

Retailer: Why the focus is always on Jaipur? Do you have any plan to undertake projects outside Jaipur? Which are the potential localities you will prefer?

DM: Jaipur being the hometown has always been my first love. Yes, we do plan to move out of Jaipur in near future. We will focus on the tier II and tier III cities and also plan to expand throughout Rajasthan.

Retailer: After accumulating so much of experience in real estate, what’s your perception of the challenges a developer faces? What’s your suggestion to ease out those problems?

DM: The major challenges are the small unauthorised prolific commercial constructions and high interest rates on the commercial loans and stamp duty. This is high time for the government to take a call to give real estate the status of an industry and formulate the laws accordingly. This will help cities to grow in a well planned way also in terms of civic and hygiene sense.

Retailer: 100 per cent FDI is allowed in real estate development. What’s your take on this? Do you think this will sideline the small developers? Do you think it has any beneficial effect on tier II & tier III cities?

DM: According to me there is no harm in FDI. Still there is a lot of scope for both the sections of real estate segments i.e., Residential as well as Commercial. As only 6 per cent to 7 per cent people own their houses and only around 4.5 per cent retail market of the total is organised, there is a wide scope for small developers too. It will definitely have positive impact on tier II and tier III cities as the percentage growth of development will be propelled on the faster pace and take less time to reach to the said cities

Retailer: What should be the ideal size of a mall in a tier II and tier III cities? Tenant mix is one key factor for a successful mall. How the strategy for tenant mix in the tier II malls is different from the malls in metros?

DM: The ideal size of a mall would be around 3.5 to 4.5 lakh sq. ft. in tier II and 1.75 to 2.00 lakh sq ft of built up area in tier III cities. As far as strategising of tenant mix in tier II cities is concerned, there should be around 70 per cent of retailing which should be comprised of hypermarkets, anchor stores and different vanilla stores. Rest 30 per cent should have an entertainment zone including multiplexes, gaming zones, etc. and a conventional food court comprising of some multinational food chains according to the catchments of the mall.

Retailer: Where do you like to see yourself after five years down the line? What’s your vision and mission?

DM: Right now we are delivering around 1.5 million sq ft of construction in a year. I plan to deliver at least 5 million sq ft of affordable luxury along with lifestyle shopping and commercial spaces. We also plan to venture into hospitality, health care and the education industry very soon.

Retailer: To make a mall commercially viable what are the factors a developer should keep in mind?

DM:  A developer should keep in mind that a mall should be ideally and strategically planned; there should be leasing model instead of sale model; the volume of the project should be according to the catchments requirements; the tenant mix should be according to the catchments of the mall; there should be proper categorising of the clientele, efficient and effective maintenance should be deployed; and lastly, there should be the provision for minimum guarantee or revenue sharing module as per the respective brands.

Retailer: What’s your suggestion for those real estate developers who are planning to make it big as a mall developer?

DM: To be successful a real estate developer should always ensure that there is always a well-maintained profile; he should remember leasing model is always preferable; sizes of the showrooms should be according to the specific requirements; malls should not be sold and left; the developers should always try to bring secondary footfalls through various means like events and promotions, advertising, etc. for making the mall successful; the volume of the mall should be decided according to the location catchments; and a branded facility management company should be hired for best services and maintenance in the mall.