News: Indian mall owners flex brand muscle, hike rentals
(TNN 12/10/2006) New Delhi/Gurgaon - Big retailers are losing hold over malls owners, who are no longer in awe or dire need of brand halos to drive occupancy or consumer footfalls to their glass-boxed shopping heavens.
With malls becoming an accepted, even sought-after marketplace for both consumers and marketers alike, an increasing number of mall developers are now realising that it makes little sense in giving out prime mall space to anchor tenants, essentially big brand retailers, at throw-away rentals.
Interestingly, not too long ago, perhaps the most important job for any mall manager was to strike the right anchor tenant deal, for the mall’s survival hinged solely on the big retailer shingles hanging at its doors.
“Low rental offers by anchor stores have also forced developers to try their luck through revenue share agreements where they may earn more,” says Abhijit Das, head, Ansal Plaza Mall Management Company. In fact, a crowding of retailers, and the need to drive up their rental income may be important reasons for mall owners to shun big retailers as anchor tenants, but there is more to it.
Industry observers point to the trend of malls creating and driving a strong brand equity for themselves, in turn decreasing their dependence on big retailers.
“Earlier, the presence of retail chains was the key factor that determined footfalls in a mall. Not any more. Now malls are independently recognised and are marketing themselves aggressively,” says Raman Mangalorkar, principal, AT Kearney.
As mall developers realise the importance of having more than one big anchor tenant and going beyond department store anchors, small format stores — termed as mini anchor tenants — are getting into malls. “New innovative mid-sized formats are becoming popular as they take less space and cater to everyone’s needs,” says Ajay Khanna, executive director, DLF Retail Developers.
Though, not all mall managers agree that big anchor tenants are a thing of the past. “Anchor tenants are the lifeline of a shopping centre, whatever the arrangement may be, purely rent based or revenue sharing,” says Aditya Sikri, CEO, Spice World, a mall-cum-multiplex operator in Noida.
Book stores and food courts are a few new options being explored by mall developers along with pure entertainment formats. “Developers are looking at tapping the leisure and entertainment space to increase footfalls instead of relying on big retailers.
With malls becoming an accepted, even sought-after marketplace for both consumers and marketers alike, an increasing number of mall developers are now realising that it makes little sense in giving out prime mall space to anchor tenants, essentially big brand retailers, at throw-away rentals.
Interestingly, not too long ago, perhaps the most important job for any mall manager was to strike the right anchor tenant deal, for the mall’s survival hinged solely on the big retailer shingles hanging at its doors.
“Low rental offers by anchor stores have also forced developers to try their luck through revenue share agreements where they may earn more,” says Abhijit Das, head, Ansal Plaza Mall Management Company. In fact, a crowding of retailers, and the need to drive up their rental income may be important reasons for mall owners to shun big retailers as anchor tenants, but there is more to it.
Industry observers point to the trend of malls creating and driving a strong brand equity for themselves, in turn decreasing their dependence on big retailers.
“Earlier, the presence of retail chains was the key factor that determined footfalls in a mall. Not any more. Now malls are independently recognised and are marketing themselves aggressively,” says Raman Mangalorkar, principal, AT Kearney.
As mall developers realise the importance of having more than one big anchor tenant and going beyond department store anchors, small format stores — termed as mini anchor tenants — are getting into malls. “New innovative mid-sized formats are becoming popular as they take less space and cater to everyone’s needs,” says Ajay Khanna, executive director, DLF Retail Developers.
Though, not all mall managers agree that big anchor tenants are a thing of the past. “Anchor tenants are the lifeline of a shopping centre, whatever the arrangement may be, purely rent based or revenue sharing,” says Aditya Sikri, CEO, Spice World, a mall-cum-multiplex operator in Noida.
Book stores and food courts are a few new options being explored by mall developers along with pure entertainment formats. “Developers are looking at tapping the leisure and entertainment space to increase footfalls instead of relying on big retailers.
posted by InCar Group Press Room at 13:38
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