It was the oversupply of malls in a limited area that lead to sluggishness of sales in the past. So, the Real Estate developers, in order to make their malls viable, conceptualised the idea of Mixed-use malls, as an add-on attraction.
Widely perceived among the Real Estate fraternity as ‘Mixed-use development’, the concept is a well designed and conceived combination of various elements including retail, hospitality, residential, and commercial office spaces in a single project.
Such a development can be either horizontal mix or vertical, or a combination of both, depending on the land parcel. Horizontal mix refers to the structure in which each building occupies its own envelope and is spread across the site. Such developments require very large pieces of land, on which one is able to have the convenience of separate vehicular circulation, parking and entrances.
The vertical ones are a bit complicated, but require lesser land parcel as compared to the horizontal ones. An example can be a mall with retail space on first three floors followed by offices on higher floors or a hotel on top of a mall.
Undoubtedly, the brain wave of mixing a hotel or office space with a retail centre is a good combination as far as the retail centre is concerned, because it provides a handy supply of customers, assuming that the location demands the mix, and that each element is designed to suit the same socio/economic profile.
A plush hotel above a B-grade shopping mall doesn’t make sense and neither does a two-star hotel with an A-grade retail mall. It’s also not good to put up a hotel with the retail if the demand is not there. For mixed use to be successful, each element needs to be alive and active in accordance with each other.
Sharing thoughts on the same, Shubhranshu Pani, Regional Director - Retail Services, JLL India, said, “There are no special modifications or even procedural revamps required to integrate an office component into a retail mall. The only changes that would be required are in terms of internal fit-outs, which are undertaken by the occupying parties.”
The theory behind Mixeduse malls
Offices and retail are known to be good partners since ages as both fuel the demands of each other. Given that the level of design and finishes complement each other so it follows on quite naturally that a mixed-use development comprising retail with hotel and offices, all together make a good mix.
The only difficulty lies in terms of planning. It is crucial that there is adequate parking, clearly demarcated for retail visitors and residents and/or employees, and that the entrances are different for different segments.
Lamenting on the slackness in leveraging mixed-use malls, Yogeshwar Sharma, Executive Director, Select CityWalk, opines, “In a mixed-use mall, all segments support each other in such a way that both can coexist and support each other to bring in the traffic and help the commercial viability to sustain.
Also, such a development provides a comprehensive offering thereby reducing the time taken for commuting between office and cinemas etc.”
In favour of the mixed-use malls is the fact that they help to relieve the cyclical economic risks. In other words, when the retail sector is in turmoil, the hospitality or commercial sector can balance and lessen the impact on revenue.
Leading examples There are plenty of examples of existing and upcoming projects which are an amalgamation of shopping, entertainment, residential, and retail co-existing along with office space.
The existing ones include the likes of Select City Walk at Saket in New Delhi, Treasure Island at Indore, Inorbit Mall at Vashi, Mumbai, Nirmal Lifestyle in Mumbai, Nucleus Mall in Pune, Phoenix Mills and Express Mall at Chennai, BD City Mall at Bhopal, Elante` in Chandigarh and Ambience Mall in Gurgaon.
Taking a leap further, some malls have incorporated metro station within the project to draw in considerable footfalls. A live example is Mantri Square Mall in Bengaluru, which is so far the only mall in India with metro station connected to it.
In the words of Aditya Sikri, CEO - Retail & Commercial, Mantri Developers Pvt Ltd, “The biggest benefit is that such malls create a mix of products and services that are very diverse in nature and can cater to all strata of society under one roof.”
Emphasising on the reasons which lure developers to try hands on such projects, Ashok Gupta, CMD, Ajnara India Ltd, said, “This concept also helps in attracting big corporates due to the closeness of office spaces with residences. For India, such developments are the best options as newer regions are emerging quickly, but lack a required infrastructure and commercial presence to lead a balanced life.”
Even though mixed-use malls have many advantages, but it also comes with some challenges like:
As pointed out by experts, the overall cost of development in mixed use designs is often higher than the single purpose projects as prime focus is on eliminating interference between retail operations and lives of tenants/residents
Extensive planning and designing requirements are on top of hierarchy, which add to overall cost of construction.
Lack of proper design in terms of customer flow, parking space etc, could impede the growth chart for a mixed-use project leading to negative ramifications on the entire development
Since such projects are intended to accommodate significant number of masses, the size of land is generally more than a million sq ft. Finding a land parcel of that caliber is a tedious task
While many mixed-use development are enormous, many of them are small and tend to have a little of everything. As an owner, or as a larger tenant, it may be difficult to get the economies of scale or the desired size of area need in a smaller mixed-use development.