Mall mania : Destination Punjab

After having constructed numerous malls across almost all metros and mini metros in the country, mall developers and promoters, at national and local levels, are now targeting the state of Punjab as the next mall destination. With nearly 40 malls coming up by 2010, 30 of which will be operational in the coming two years, the state is all set to infuse the people of Punjab with the mall culture.

From just two operational malls in 2005, encompassing a total of 2.7 lakh sq.ft lease area, nine new projects are scheduled to be completed by 2006-end. This will take the total mall space to 31.8 lakh sq.ft, a nearly 12-fold increase in just one year.

Though, organised retail is still in the initial stages in Punjab, a glance will confirm that there are tremendous opportunities available in the form of upcoming projects that include townships, apartments, multi-plexes and malls. Developers are eyeing the state essentially because of its strong NRI base, high per capita income and an urban and rural population ready to spend money.

While most major cities in Punjab will experience the mall phenomenon, Ludhiana, Jalandhar and Amritsar would be on top of the chart. The categories expected to attract the maximum spending are food, fashion and lifestyle. Watches and jewellery are two categories that have largely remained untapped in Punjab. Among the speciality malls, gold and wedding souks will make their debut .

Construction activities which are on at a rapid pace, and visible in most large cities, are attracting investment of thousands of crores of rupees. Some of the players entering the market include national as well as regional players (see chart ‘Some malls coming up in Punjab’).


High consumption figures

Currently, Punjab’s retail potential is around Rs 3,864 crore, which would jump to Rs 5,940 crore by 2010. This figure would further go up to Rs 14,131 crore by 2020. Punjab’s consumption and expenditure is significantly higher than the all-India average in almost every retailing category. Based on statistics provided by the National Sample Survey Organization and retail market sizing parameters adopted by the Images-KSA Technopak India Retail Report 2005, the average per person monthly consumption expenditure during 2004-05 in urban Punjab stood at Rs 1182.90, which is higher than the national average of Rs 1149.52.

Punjab is one of the richest states in the country and the people are willing to spend on food, entertainment and lifestyle. This viewpoint is seconded by all mall developers who have a stake in the state’s real estate market.

Though there are the elite, middle class and upper class as well as a sizable rural population, most developers are targeting the entire spectrum of people, including the kids and youngsters, through a tenant mix and proper zoning in their malls. 

A cross-section of mall developers briefed Retailer on the various mall development projects in the state.

Giving figures on the rural customer, R.S. Arora, CMD, RAP Media, says, “Rural consumers in Punjab have an average monthly consumption expenditure of Rs 1,022, which is marginally lower vis-à-vis the state's urban average, but quite substantial compared to the national average of Rs 635. Also citing figures, Dr Bal Sidhu, MD, 3S Infrastructure, says, “Private consumption expenditure in Punjab during 2004-05 stood at about Rs 61,900 crore, which is 3.3 per cent of the country's total private consumption expenditure of Rs 1,866,000 crore.”

Informs Pramod Babber, General Manager, Advanced India Projects Ltd, “There is a huge aspiration quotient that has been created in the minds of the rural population because of the communication explosion, and they too have acquired the ‘me too’ attitude.”


Rajat Kakar, Managing Director, Silver City, says that since all kinds of brands of fashion, lifestyle, entertainment, and food courts, would be present in the malls, the target would be the middle-class families who would see shopping as a complete leisure experience.

Rajan Sharma, Vice President, MBD Mall, says, “The state’s population is widely travelled with a good degree of awareness about brands, both national and international, and conscious about making a lifestyle statement.”

When asked what initiated them into building malls in Punjab, the developers were clear in their perception: Punjab is one of the richest states and consumer spending in urban and rural Punjab is the highest in the country.

Responding to why they were targeting Ludhiana in particular, developers said that Ludhiana was the richest district in the state and, thus, the acceptance of malls by consumers would be faster than other parts of Punjab.

The relative easing of Indo-Pak relations has also contributed to boosting the real estate market, particularly  in Amritsar. Developers are anticipating the customer-base to increase, which could also include visitors from across the border, up to Lahore. Even though the Indo-Pak relations are see-sawing due to various delicate political issues, the trading options are still wide open.


Government’s incentives

Earlier, all real estate developments were undertaken by the Punjab Urban Development Authority (PUDA), who were more or less involved in designing residential buildings, conforming them to standards which were absolute. Today, experienced private developers are involved in developing shopping centres with world-class designs, that is estimated to ultimately change the way people shop in Punjab.

One factor assisting in the development of multiplexes, and which will benefit and attract cine goers, is the entertainment tax exemption policy of the state government. The propensity to spend on entertainment in Punjab is healthy and with an upwardly mobile middle-class looking to experiment, the state has become an important market.

Relaxations in building by-laws (with respect to height and ground coverage) and stamp duty by the state government, and Punjab’s inherent market potential, are other factors that have attracted developers.

The Punjab government has advanced the benefits of mega project status to more than 67 mega projects in the last one year, which offer subsidised electricity tariffs, freedom to operate 24 hours as per the requirements of the people, and single-window clearance. The large SEZs (Punjab and Haryana together make up 70 SEZs) planned by the state through private-public partnership is a significant motivating factor. More recently, the Empowered Committee has given approval to eight new multiplexes in the districts of Amritsar, Ferozepore, Jalandhar, Ludhiana and Mohali, entailing an investment of Rs 1,192 crore, and the nod to four industrial parks in Ludhiana, Nawanshahr and Mohali.

The government has also cleared the Rs 13,000 crore EMMAR-MGF project, the state’s first foreign direct investment (FDI) in real estate. The project will be spread over 10 sectors in Mohali.

The upgradation of Amritsar’s  Rajasansi International Airport to 69 direct international flights per week has provided NRIs easy access to  the state.


Mall rage or rat race?

More significant developments are being witnessed and will continue in towns like Ludhiana, Mohali, Amritsar and Jalandhar in the next three to four years. By 2008 the total area in the state is expected to cover 150 lakh sq.ft, consisting of 33 malls, and by 2010, the total is expected to touch 40 malls.

Mall experiences will include, ice- skating rinks, clubs, tennis courts, bridge-rooms, multiplexes with platinum lounges and agronomical seats, besides celebrations of festivals in a new, different style.

Considering that a large number of developers are planning or have already built malls and multiplexes in Punjab, their feasibility, in terms of footfall conversions and occupation level, while relating it with the national situation, have lead to uncertainty among some retailers.

Brushing aside such doubts, Sujit Kumar, CEO, Aeren R Enterprises, counters, “The Indian consumer is ready to migrate from shopping in the normal traditional neighbourhood market, which suffers from poor infrastructure, to organised retail.”

Predicts Babber, “Though malls will sustain along with high street retail, as the market grows organised retail will thrive.” Echoing the same views, Kakar, says, “Currently, organised retail business is in its infancy and full of opportunities; when it attains maturity it will do so with an equally strong specialised mall management concept.”

Elaborating on the issue, Reema Menon, Vice President, Head Retail, Parsvnath Developers, says, “There are three major reasons for opting for Punjab. First, the clientele - the spending habits of Punjabis in fashion, garments, their lifestyle is much higher; second, multiple locations - in Punjab you can have a mall in any city with its own catchment, unlike in other states which have A and A+ category cities; and third, the Punjab government, in certain areas, is giving sanction for mega projects.”

We examine some of the major malls coming up in important cities in Punjab which are expected to change the way Punjab shops and seeks to be entertained.



Ludhiana, the industrial capital of Punjab with a population ready to experiment with new shopping formats, will host the fourth biggest City Centre project of the world, spread across 40 lakh sq.ft in Shaheed Bhagat Singh Nagar (see box ‘Biggest project in Punjab’). Developed by the Ludhiana Improvement Trust in collaboration with Today Homes and Infrastructure Pvt Ltd, it is the only project among scores of privately developed multi-complexes where the government is involved.

Considered as one of the largest organised retail development projects in the country, being built by Aeren Enterprises, is the Festival City destination mall along NH 1 between Ludhiana and Jalandhar. With a retail area of 20 lakh sq.ft the mall will have a 10, 500 sq.ft hypermarket; a giant screen Imax theatre; a 40,000 sq.ft youth sports club with temperature control gym, wellness centre and spa, foodcourt; a 10,000 sq.ft amusement park; and an entire floor catering to interior decor.

RAP Media is developing a 15 lakh sq.ft, eight-screen multiplex, with a foodcourt, entertainment zone, theme malls, a 5 Star hotel, and shopping area.

In the last 15 years the city has observed spectacular development in almost all areas of retailing, both inside and along the periphery. The city offers three major areas for retailing. While the Feroze Gandhi market are seen as the commercial hub, markets of Sarabha Nagar, the posh locality of the city, is the food destination. Mall Road, with its multi-storied shopping complexes, has big showrooms of local and branded apparels, besides designer wear,  jewellery and footwear, and is the destination point for the upper-middle and the high-income groups.

Areas like Chowra Bazaar and Ghumar Mandi, which have seen a lot of retail activities during the last century,  lack a proper product-mix of foodcourts, retail outlets, multiplexes and entertainment. This conservative shopping destination, though still popular with a section of the population, has given way to three modern high- street retailing areas.

Towards the outskirts, along the Jalandhar road, national-level builders are using the area for development activities. Being an industrial city, a major part of Ludhiana is used for industrial activities and these areas do not offer any shopping opportunity.

The area most preferred and now being developed for malls is the Ferozepur Road, and major developers like, the Ansals, Chadha Group, Freemans, Omaxe and MBD are involved in projects there.

Malls in the pipeline for the Jalandhar road include Aerens Gold Souk, which is at an advanced stage of development; Ludhiana Plaza, in an area of 11 acres, which will accommodate an Imax Theatre, a hotel, a five-screen multiplex, along with high-end retail outlets and foodcourts; Omaxe, in an area of 4 acres; and Eldeco, in an area of 100 acres for a township.

While Ansal Plaza is the only operational mall at the moment, Freemans, which is launching their project on the same road in a total area of 1.5 lakh sq.ft, will have PVR and Pantaloon as major anchor brands, and is expected to become functional by early 2007. MBD Neopolis on the main Ferozpur road with the largest plot size can accommodate 7.5 lakh sq.ft. of built-up area. 

Following its debut in the city with Ansal Plaza, the first major mall in the city and in Punjab, Ansal Group has also purchased land near the Verka plant for another mall.

A total of approximately 17 lakh sq.ft of built-up area is already in existence or under construction or at the planning stage, which includes more than 12 screens for multi-plexes.



As has been the case with almost every city in Punjab, Jalandhar also restarted its growth after 1984. The year is significant because it marked the beginning of the end of terrorism which had eroded the economy of Punjab bringing with it instability and fear. In the years that followed, Jalandhar has picked up the threads of development remarkably well in the areas of real estate and construction.

Internationally known as the city for sports and leather goods, Jalandhar boasts of a more planned and developed city of Punjab.

The city has also witnessed continuous increase in land prices during the turn of the century. Model Town, Adarsh Nager, Urban Estate, Lajpat Nager and Defense Colony are some of the well-developed areas of the city.

Till late, organised retail in terms of shopping malls and multiplexes was absent, and almost all the retail area was in the form of high street formats. Taking the cue from the Ludhiana Ansal Plaza example, builders and developers are introducing the shopping complex and multiplex experience in Jalandhar as part of their aim of initiating organised retail.

The old city of Jalandhar to the GT Road covers most of the high street areas where retailing is available in plenty. The old high streets retail shopping areas, which are located adjacent to each other and collectively form the main shopping hub of the city include Rainak Bazaar, Sheikhan Bazaar, and the old GT Road.

Shopping complexes, in variations of small to medium formats, are taking shape at various locations in the city, more so at the Model Town market and on the GT Road. Some of the developed and occupied shopping complexes include Paradise 2000, Gaba Complex, Prime Tower, Grand Mall,  and Alpha Complex.

In the Jalandhar City Centre RAP Media will have a seven lakh sq.ft, six-screen multiplex, with foodcourt, entertainment zone, retail, 5 Star hotel.

Other groups that are developing their projects include Advanced India Projects Ltd, Silver City, Alpha G Group, and MBD Neopolis on the  BMC Chowk.



The centre of terrorism activities in the 80s, the holy city of Amritsar saw no real estate exercise, till recently, when national-level developers realised the potential of the city and began purchasing land for development.

The sudden interest of developers in this city is attributed to the end of terrorism, softening of the India-Pakistan relation, coming up of the international airport and a population eager to enter the modern culture after a period of insecurity and losses.

Amritsar, a city of businessman and the service class, is famous for its historical buildings and colleges. The city attracts a large number of tourists and students. The local population too is restless to savour different cuisines and be entertained.

The Wagah border near Attari village has come alive with the opening of the border and trading options since it connects countries in the middle east. The area is considered important for developmental purposes.

A commercial land near Ram Bagh, the summer palace of Maharaja Ranjit Singh, which is a tourist attraction and a historical identity of the city, fetched over Rs 78 crore during an auction conducted by the local municipal corporation. This was to be the precursor to the real estate prices in the future. National as well as international realtors are queuing up to set up state-of-the-art multiplexes in the city.

After the announcement of the DLF Group to invest over Rs 1,000 crore in the special economic zone (SEZ), other groups have also announced the development of malls and commercial complexes, besides residential complexes,  in this town.

One of the first developers was Advance India Projects Ltd (AIPL), the promoters of Celebration Malls. The company has already developed over 15 lakh sq.ft of commercial space in and around Delhi.

On Amritsar’s Circular Road, RAP Media is coming up with a three lakh sq.ft mall, which will have a six-screen multi-plex, foodcourt, entertainment zone, retail, and a 5 Star hotel.

 Half-a-dozen more malls are in the pipeline, which would dot the landscape of the city and periphery, by the end of this year. Some of the major malls that are being developed are Omaxe Novelty Mall, City Centre, Maiden Mall, Gold Souk and Eminent, while Central Mall is already operational.

AIPL's Celebration Mall, apart from providing outlets for international brands, would offer various avenues for recreation and world-class infrastructure.

A majority of the malls are being constructed in the Civil Lines area, and on the airport road. Celebration Mall, set to be operational by August 2007, is being built on the Batala road where the once Gagan Cinema existed. RSA Prop Build has joined hands with MGF to build a multiplex-cum-mall called The Metropolitan in an over three lakh sq.ft of area. The mall would have a hotel, a four-screen multiplex, a foodcourt and shopping mall, besides parking for cars.

Alpha G Group’s destination centre, AlphaOne, would encompass retail, entertainment, a luxury hotel and stand-alone boutiques, including enhanced functionality for tenants and customers with a parking facility for over 1,000 cars. Parsvnath also has plans for the city.

AlphaOne will be spread over 25 acres on the GT Road and will be the largest city centre development in Amritsar catering to the new and old city. The government's decision to develop Amritsar airport as an international airport has also influenced the property rates near Wagah border.

With roads set to be elevated around the Golden Temple complex, the traffic will become smoother since kiosks, retail overflows and slow moving vehicles will not create bottlenecks on the elevated road. This arrangement will assist in clearing the approach to the malls that are built along these roads.



Mohali, in the periphery of the Union Territory of Chandigarh, is attracting top-level national and international developers following the Punjab government’s clearance to its mega project policy for the development of shopping complexes and multiplexes.


The coming up of Quark City in an area of 51 acres in the Special Economic Zone in the Mohali industrial belt has also added to the importance of this satellite town of Chandigarh. Because Chandigarh, a modern high-class city, just over 50 years in its making, has only one mall, the neighbouring towns of Mohali and Zirakpur are, hoping to cash in on the large young population of Chandigarh willing to spend on entertainment and branded products together with the excitement of driving out of town.

The state’s plans on new shopping complexes will accommodate retail space where major retail brands are expected to be present. The state has already given its approval to companies like SPS Multiplex Pvt Ltd and RAP Media Ltd. While RAP Media has entered into a joint venture with Dara Studio for the development of a mall-cum-multiplex, SPS Multiplex is planning to develop a retail mall, hotel and rooftop revolving restaurant on the road towards Kharar, which is again a small town some 13 km from Chandigarh.

Developers like, DLF, Unitech, TDI, MGF, Janta Promoters, Renaissance, and Country Colonizers are already in the process of developing the town.

Other builders like Parsvnaths and Alpha G Group also have projects coming up in Mohali.



An obscure village that has now developed into a small township due to its proximity with Chandigarh, Zirakpur is undergoing swift transformation and emerging as an important commercial and residential area. Besides the Cosmo Plaza mall, covering an area of around 5.7 lakh sq.ft, Silver City is building two other malls measuring 5 lakh and 5.25 lakh sq.ft, respectively,  in this town.

Alpha G Group also has plans for City Centre projects in Zirakpur.


Other upcoming projects

Some upcoming projects in Punjab are as follows. RAP Media is planning malls in tier III cities such as Patiala, Nawanshahr, Bathinda, Phagwara, Ferozepur, Pathankot, Hoshiarpur, Kotkapura, Faridkot, Khanna and Kapurtala; Advanced India Projects is building malls in Khanna and Bhatinda; Silver City is planning 900 flats in Derabassi, and residential and commercial projects in Rajpura. Parsvnath has plans for the Rajpura highway. Aeren Enterprises’ other projects are in the initial stage of planning.

Spirit Global Constructions, in a tie-up with Pyramid Saimira Theatre (Pyramid), will construct 60 malls in Punjab in an area of 2 to 10 lakh sq.ft at Ludhiana, Zirakpur and Hoshiarpur. All the 60 malls are proposed to be completed within the next 36 months.


Challenges ahead

Is the mall boom in Punjab set to revolutionise the unorganised retail sector in the state, or will it result in an unprecedented numbers of vacant and highly expensive retail lots?

The first mall in Punjab, Ansal Plaza, built in the state’s industrial belt and the most lucrative market, Ludhiana, was initially, a sell-out. The mall, developed by top national-level builders, was observed as an example that would change retailing in Punjab. If Ansal Plaza’s retail sales, today, are considered vis-a-vis the Punjab retailer’s willingness (or unwillingness) to lease outlets, along with the limited conversions, then, would retailers be ready to take up lease in the 40 plus upcoming malls for business, or will the huge investment on building these malls come to a naught?

The challenge for mall developers in Punjab lies not in roping in top brands but in retaining and sustaining them. Even if it does not directly affect the developer, the success of malls in the long run would depend upon the number of real customers generated and not just on footfalls.

Though residents are excited about the coming of malls, the fact remains that they will provide a place to hang out which most cities in the state are lacking. A lot of people visit existing malls to eat out and window shop. The share of the section of society that is going in for branded products is not very high as most middle-class customers complain of high prices.

Real estate costs: The cost of land in the periphery of Chandigarh has sky-rocketed. Zirakpur, in the immediate vicinity of the UT, is slated to have a plethora of malls and complexes.  However, most of them, today, are sites with no development activities.

If the land has been purchased by developers at an exorbitantly high cost, will the retailers be able to pay the high rents when the malls finally come up in these underdeveloped rural settings?

Answers Sujit Kumar, “Real estate prices are a function of demand and supply, and the demand has increased during the last couple of years, in fact a little two fast in Punjab. Real estate prices are definitely going to rise due to the present demand.”

Kakar explains, “Retail real estate prices have increased as it is seen as more profitable than other areas of commercial development. Further, construction of malls at a particular place is being seen as a catalyst in pushing up the overall property rates.” Besides, says S.K. Sayal, CEO, Alpha G Group, real estate retail prices will stabilise once the competition comes in.

Hosiery industry: Punjab is also served by hosiery goods from Ludhiana’s industries which, though not branded, are of low cost and of comparative good quality. This industry will definitely be in direct competition and affect sales in the malls.

Explaining the consumer’s psyche, Arora says, “Consumers, particularly in Punjab, are becoming more brand conscious, replicating their counterparts in the metros. Hence, they would not mind paying a premium. Also affording the products is not a problem.”

Dr Sidhu says, “Low-priced hosiery will not have any effect on the sales in malls as the products offered are over and above low-priced hosiery goods and are of a certain quality and standard.”

Explains Babber, “Malls are not just about low-priced hosiery, they are about experience, fun and laughter and buying which comes along the way. Mall sales do not just happen because people go there to simply buy things. They happen because people come to experience a whole new feeling about going out.”

Terming it as an asset for the industry, Kakar says, “Hosiery and other industries in Ludhiana would welcome this change of promoting their brands from the shelves of organised shopping malls.”

The epicentre of this retail revolution would be Ludhiana, says Sharma, adding that studies suggest that the total retail potential of Ludhiana would be Rs 5,940 crore by 2010.

To tackle competition, retailers will have to come out with better strategies to attract customers from varied income groups. Unlike other states, the unique feature about Punjab is that it has equal support from urban as well as rural consumers as far as growth of consumption is concerned.

Approach to malls: While the mall will see a lot of modern facilities and shopping features in ultra modern style, there are eye sores around many of the major cities in the form of slums occupied by migrant labours who have support from politicians and, thus, have not moved from their sites.

Though the modern mall will offer a large parking area for cars, the approach to these malls is devoid of a smooth traffic flow given that there are kiosks, narrow bridges and railway barriers that create traffic jams.

With the addition of new retail malls, the state may see an oversupply situation in retail spaces. Organised retailing needs to be revitalised by the introduction of pulling factors, like large anchor spaces, hyper-marts, foodcourts, multiplexes and entertainment zones, without which any new addition to the existing retail stock would be meaningless.

The success of the malls would ultimately depend upon the will of the people of Punjab. It must not be forgotten that rural Punjab is still conservative, and prefers to demonstrate its hospitable nature under rural settings. The modern, urban Punjabi youth, considering their shift to western ways, would certainly frequent the malls which would act as their hanging out destinations.

But, whether it is high conversions or just high footfalls, the sales will depend on strategies adopted by the mall retailers and the skills of the management in wooing and enticing the customer to make purchases.

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