Retailer: How are mixed use projects utilised? What’s the usual ratio of space allocation for commercial and retail?
Shashank Pathak (SP): Mixed use projects gives leverage at planning level to utilise the best ratios of efficiencies. For example, optimum use of rentals with sold out units gives better control on the finances, at the same time, it gives good option to the planner to develop a tenant-owner proportions in finally developed properties. Certain situation calls for owning a certain percentage of property to gain at a later date, since the sold units gives a low equity option to the developer.
There is no set ratio. This completely depends on the location of the said property with a projection of the catchment for next five years, real estate growth, infrastructure and willingness of masses to visit the location.
Retailer: What are the basic parameters considered for framing the leasing strategy? How do you ensure the interests of both the parties - the developer (lessor) as well as the tenants (lessees)?
SP: While framing the leasing strategy, a lot of developers fail to relate to the monetary value of the mall to the projected image of the mall. An ambitious list of brands targeted for the mall, and blindly following the list leads to financial chaos – leading to problems on long term for mall managers. I always study the brand, visit the recently launched store, study positioning changes in the last three years, find about the people behind the planning before I actually pitch the mall and the location for any brands. It’s not always a successful story but a genuine effort always wins. I do compromise, as everyone, to get a brand in the mall but not every time if it is not a win-win situation. It has to make sense to end-users and the brand both – developer is the owner of the property and has to be a constant evaluator of each brand’s performance as much as brands themselves.
Retailer: For retail space, how do you design the tenant mix? Could you please elaborate on how floors work as one important determinant?
SP: Tenant mix is extremely important for quickness of leasing. Firstly, the bouquets of anchors have to be handpicked which usually have very high level of understanding of each and every retail space being developed in the country today. Anchors have clear understanding of their target catchment and lead the tenant mix process by accepting a property. For a leasing manager – prior to developing a tenant mix, it is important to decide the category percentage which eventually leads to tenant mix. Each category has all levels of brands and mixing of potential brands for the success of mall is of prime important. It’s necessary to design a tenant mix which caters to all those who walk in to your mall. From high fashion to mid to a certain percentage of affordable fashion will lead to a mall’s success but word of caution is not to scatter them across but to cluster them in certain areas.
Floor indexing depends on zoning, categorisation, tenant mix, and most important, flow of the traffic. Higher floors do not represent affordability but the way we have planned the zoning. Entertainment, food, impulse purchases, services all need to be spread across. I have seen malls across the globe where food court is in basement and high fashion is on higher floors, which are working wonders.