Biggest Reason For The Downfall Of Malls Is Improper Catchment Area, Says Dhiraj Jain Of Mahagun Group

In this exclusive interview with PropGuide's Anindita Sen, steadfast entrepreneur Dhiraj Jain, Director, Mahagun Group, says that malls are a good fit when located more towards the outer periphery of cities. The most important reason is accessibility. Being located in the middle of any city would mean travelling amidst heavy traffic and hence greater commute times. He also points out that shopping malls have become less about shopping and more about entertainment because consumers need easier ways to get their stuff.

High thinking and simple living is the perfect way to describe Jain. A young and steadfast entrepreneur, he holds a Bachelor's Degree in Engineering from Birla Institute of Technology and Sciences, Pilani and a Master's Degree in Business Administration (MBA) from LBS Institute of Management. Aided by his strong business acumen, Mahagun group has been breaking new grounds every year. The group continues to capitalise on his expertise and capability in setting higher standards of performance for itself. The Property Observer jury choice awards gave him the “Best developer of Delhi/NCR” award. He also won “Realty giant of North India-2014” award, the biggest realty kings award for excellence.

Excerpts from the interview:

Sen: How have been malls in India growing?

Jain: The growth rate of malls has been on the decline off late. The biggest reason for the downfall of malls is improper catchment area. Any commercial establishment thrives on its catchment area, which is directly proportional to the number of people residing in the vicinity and the connectivity aspects of the project. This again has a direct impact on brands that want to enter these establishments because a mall with excellent catchment areas is sure to attract outstanding brands, and in turn increase the footfalls even further. 

Sen: Many major cities keep expanding their peripheries. How it is affecting the development of malls?

Jain: Malls are a good fit when they are located more towards the outer periphery of cities. The biggest reason is accessibility. If a mall is located in the middle of the city, customers will have to travel amidst heavy traffic, leading to longer commute times. This can be a big turnoff for any potential visitor who plans for shopping and dining during the visit. If the locality is already populated, finding ample parking spaces can be a big challenge, because any normal-sized commercial establishment would attract great demand for parking. This is the reason why more and more malls are being developed towards the outer peripheries of cities. After sometime post further developments, they are engulfed in the main city as well.

Sen: The mall culture is fading away. What are the reasons?

Jain: The major reason for the mall culture fading away is that the general public is looking for a peaceful way of life. There are two situations with the mall culture today — one where the footfalls are much more than expected, and the other ones are where the footfalls are way less than desired. Both arise because the catchment area is improper. In both the scenarios, a person or a family planning a visit would hesitate to make a visit, because it either will land them in a crowded space or compel them to go alone. In such a scenario, it becomes very difficult to strike the right balance between location and footfalls that have eventually resulted in the mall culture fading away.

Sen: While constructing a mall, what are the key things a developer keeps in mind?

Jain: The key things a developer should keep in mind while constructing a mall are these:

Expand common spaces to create more points of convergence and grandeur.

With consumers finding easier ways to get their stuff, shopping malls have become less about shopping and more about entertainment.

Location is a key aspect when it comes to developing a mall, because a good location can be a serious crowd puller.

Connectivity is another important aspect that ensures decent footfalls, and this is very much linked to the location.

Catchment Area is something which is well synchronised with the location and connectivity. A mixed land use project involving a mall is destined to have a good catchment area. But in standalone properties, you need to keep the catchment area you wish to have in your mind.

Lastly, the Brand Value Expected at your property will also define the kind of location you choose and the quality of decor you offer in your property.

Sen: Do the rising number of malls affect the growth scale?

Jain: Yes, the rising number of malls has indeed affected their growth scale in India. The graph has somewhat started to stagnate, and may soon be a decline if proper detailing is not looked into. The administration and licensing authorities would have to be very precise as to how much catchment area they can afford to spare for a mall, and how well a connectivity quotient can be achieved for that particular region. Also, developers need to be careful in their process of offering spaces to retailers in their malls ensuring that there is a mix of everything, from apparels to entertainment and accessories to multi-brand retails. They should not just fill in people to sell space. 

Sen: Retail tenants prefer superior malls. Could this be a reason for the failure of average malls?

Jain: Every retail brand, be it affordable or luxurious, aims to achieve maximum sales. This is the biggest reason why retail tenants look out for superior malls rather than average malls. Superior malls are sure to have higher footfalls than average ones, and higher footfalls give you higher odds of conversions.