Mall Culture in Kolkata

SundayET, along with global real estate services firm Cushman & Wakefield, conducted a survey in the top seven cities, which reveals that despite the slowdown this year, there will be more than 16.5 million sq ft of fresh retail space supply. In fact, by 2010, these figures are going to cross a whopping 32.5 million sq ft.

Interestingly, this year the NCR region tops the list with more than 7.5 million sq ft of additional space, while in 2010 the retail supply here will come down to 5.5 million sq ft only. The real growth in the retail supply will come in Hyderabad, which will cross nearly 7 million sq ft in 2010.

Experts things will only get worse. Says Kishore Biyani, CEO of the Future Group: "The risk element of the developers will increase with so much supply slated to come up. To sustain this, we need to look and work at the dynamics of how the market can grow. Till such time the retail market does not grow, it will be very difficult to absorb such kind of space. In the near future, the market has to stabilise as far as rentals are concerned. Productivity is a key factor for any retailer to operate efficiently in a mall, in case of a leased deal. We have changed our business model and are now operating on a revenue-sharing model in the malls."

What over heated real estate prices did not do, double-digit inflation and global slowdown has. Retailers in India say expansion plans will be hit and they are looking at measures to combat a possible slowdown in some sectors.

One of the first causalities will be large format stores. After experimenting with multiple store-formats like Hyper, Super, Daily and many others are now looking at settling on smaller shop floors.

Roopa Purushothaman, the chief strategist at Future Group says, "I think there is a lot of space for smaller formats. We have seen that within Future Group as well. I don't think one is going to cannibalize the other. But I think we are going to see smaller formats taking a bigger presence."

Ashish Kapur, the managing director of Yo! China, the largest Indian Chinese fast food chain agrees with this. Yo! China has three formats -- restaurants, take-aways and carts. Out of all of these, the carts give the highest return on investment. "In the cart model, if a particular location doesn't work we take the cart out and we can re-use a 100% of asset and we park the cart somewhere else."

Though the revenue from a cart is less in comparison to a restaurant but it is a safer investment than opening a restaurant in a wrong location. Retailers say they are observing a tempering in consumer spending in big-ticket items like white goods, food and furniture. And many have begun price sensitive stocking rather than providing a larger variety to consumers. Many stores are replacing higher priced goods with cheaper items.

"You are seeing a lot of strategies towards looking at price sensitivity. I think the whole price sensitivity question is happening and its happening particularly in low margin sort of categories like food and that's going to continue," says Roopa.

On the whole, retailers are putting up a brave front and insist that even with double digit inflation and a conservative GDP estimate of 6%, they expect the market to grow to $200 billion in the next five years.

According to global real estate consultant Jones Lang LaSalle Meghraj, mall developers are bearing the brunt of the global meltdown in terms of lack of funding for their projects. "The mall developer community has been impacted by the economic scenario and the lack of funding in the market.

A fair number of projects will not see the light of the day, as funding has dried up," Jones Lang LaSalle Meghraj Managing Director (Retail)

Nevertheless, this was an opportunity for long-term retail players to continue investing in retail projects, he said, adding retailers were not directly affected by the crisis as most of them were local players.

"There has been very low-level impact of the global economic scenario on retailers. Retailers, who are currently operational in the country, are largely local players, and their operations continue to expand and grow," Pani said.

In the last three quarters, these players had been choosing to work with landlords, and apart from a few oversupplied market pockets in the country, there would not be any issue in leasing retail properties, he added.

The market is worried about timely delivery of projects by developers to retailers as the delay would mean loss of seasonal inventory.

"I see high growth in value-retail across markets. Supermarkets and hypermarkets will grow exponentially ," Pani said.

With correction in real estate and growth on track, retailers' expectations were becoming more realistic and their expansion plans more concrete, he added.

Pani said developer community had gradually become more sympathetic to the compulsions and needs of retailers.

"I see many developers beginning to show empathy and understanding of retailers' concerns and issues with many opting for minimum guarantee and revenue share arrangement with retailers and sharing a bit of their risk," he added.

As a result, many wholesale suppliers in Azadpur mandi, or market, say they have stopped supplying to various Subhiksha outlets in the National Capital Region (NCR) as Delhi and its environs are collectively called, after their payments were held up for anything between two and six months. As a rule, bulk buyers pay up suppliers within a month.

A senior office bearer of Vegetable Traders Association of Azadpur put the amount due to suppliers at around Rs2 crore. He didn't wish to be identified. At least half a dozen other fruit and vegetable sellers in the mandi, however, said it could be as high as Rs3 crore.

Feeling the heat: Subhiksha MD R. Subramanian The discount retailer is facing a supply crunch in the NCR, with many wholesalers of fruit and vegetables stopping supplies to the firm over non-payment of dues

A trader, who did not wish to be named, said: "I will stop supplying to Subhiksha the day I recover my dues." He claimed his outstanding against the firm was more than Rs30 lakh. "If I stop supplying to them, they may withhold my previous dues." A Subhiksha official, however, downplayed the issue.

"If you are doing business and someone's payment is delayed, it could be for several reasons. It could be because of supply issues, quality issues, or billing issues," said Ashu Phakey, president (Delhi region) at Subhiksha. He said he was unaware of the payment-related problem at Azadpur even as wholesalers maintained they called on him at his office as well as spoke to him on phone. "Since they are not organized kind of vendors, they, at times, have problem in being able to reconcile their accounts because they don't operate with all the invoices...so some guys may have problems." R. Subramanian, managing director of Subhiksha, said he was also unaware of such a problem at Azadpur. "We work in a completely decentralized system...we do not really handle payments to vendors centrally at all," he said. However, he admitted that there are some "reconciliation issues" and said Subhiksha's "team in Delhi was going through a large-scale reconciliation of accounts in Azadpur market".

Mint couldn't immediately ascertain whether alleged payment delays were restricted to NCR, or were broader.

But in NCR, many vendors, who have not been paid their dues, say they have stopped their supplies to the retailer.

The growing pressure on hotel and mall developers, faced with soaring construction costs that have risen by some 40%, is seeing Indian hoteliers and realtors importing built-up rooms, fittings, furniture and utility goods from China to save costs and time.

The trend of imports is catching on as costs have risen up to 50%, say industry executives and suppliers.

"A lot of vendors in China are creating entire (hotel) rooms," says Akshay Kulkarni, director for South Asia at Cushman and Wakefield Hospitality, the hotels division of the real estate consultant by the same name. "Hotel operators can go there and choose the room fit-outs that they want for their hotels."

This, hotel consultants say, will help budget hotels cut down the time taken to build a hotel by 8-10 months and costs by 40-50%. Typically, it takes between 12-18 months to build the hotel structure and up to another 10 months to fit it out. "It cuts out a lot of costs in terms of time saving," says Kulkarni.

With supply in the domestic hospitality industry lagging demand, such measures to ready hotel rooms faster helps the business on the revenues side as well. Even with current expansions and new hotels being put up, India's 150,000 hotel rooms predicted for 2010, up from 89,000 today, will fall short of demand then by some 100,000 rooms.

Hotels importing material and, in some cases, full rooms from China include mid-market hotel firm Sarovar Hotels Pvt. Ltd, which has around 35 new hotels coming up in the next three years, and business hotel chain Royal Orchid Hotels Ltd, which runs nine hotels in the country and plans to expand across pan-India by 2010.

Bidhannagar Municipality has already given the goahead for construction of Baisakhi Market in AG block to replace the street market. BD market is next on the transformation list.

• Fruit sellers, shopkeepers, fish sellers and grocery shop owners of the existing markets will find space in the mall

• Leading brands can buy space

• Companies and IT firms cam also set up offices

Apart from stocking the leading brands in garments and household necessities, the Baisakhi and BD malls will have two basement floors to accommodate around 200 cars at any point of time.

“It will help reduce traffic pressure on the streets since a large number of cars will be entering the markets every hour. The building space for Baisakhi market is almost 2 lakh sq feet on 42 cottahs of land. Both markets will be nine-storeyed buildings and the estimated cost for each is Rs 30 crore,” said Bidhannagar Municipality’s member, mayor-in-council, Nandagopal Bhattacharya. “Work has already begun and we will open the new markets in about 20 months,” Bhattacharya added.

Though the fee at malls is almost three times that levied by Kolkata Municipal Corporation (KMC) at parking lots in the city, car parks at malls remain chock-a-block.

The parking space at the basement of Forum and its periphery can accommodate 220 cars at a time. On an average, there are 550 cars on weekdays and 750 on weekends. The parking charges are Rs 20 on weekdays and Rs 30 on the weekends. "We did not charge any parking fee in the initial one and half years. But people from the neighbourhood started parking their own vehicles here. That is when we decided to introduce the parking fee," said Forum general manager Ujjal.

Kush Agrawal of 22 Camac Street cites the same reason for introducing parking fee. The complex can accommodate 400 cars at a time and the charges are Rs 20 per hour.

At least 20 mall-cum-multiplexes have been planned along this length of the high frequency highway. Construction has already started on 10 of them. By 2010, they promise to change the face of shopping and entertainment in districts the highway runs along.

Ten of the malls will be built by Bengal Shelter Housing Development Limited, a real estate developer. To let people know that a whole new mall district is coming up on NH-34, Singhadwar (lion's gate) is being built at the VIP Road-Jessore Road intersection, the architecture a replica of the gates of Raj Bhavan in Kolkata.

There would be no compromise on space or the kind of merchandise that will be available at these malls in spite of the fact that they are located away from Kolkata. In fact, many of these shopping centres are being planned on a much grander scale than what we are used to in the city. The smallest of these would have a covered space of 400,000 sq ft. Besides being a single-point shopping stopover for residents and those on the highway, the centre of attraction in each of these malls would certainly be the multiplexes that have been planned as an intrinsic part of them. Some leading names in fast food chains will also be expected to be present in the food courts of these malls.

Take the case of Gouri Kunja, the first mall on the stretch. It is planned to have an area of 600,000 sq ft and is being described as a lifestyle store for the upwardly mobile. Two names that would be big crowd pullers here are, Big Bazaar and Adlabs multiplex.

The coffee house at Kolkata's College Street was the place for intense intoxication, but achieved without the aid of liquor, remembers eminent Bengali writer Nabaneeta Dev Sen.

A visitor during the 1960s, though not a regular, to that now almost mythical cradle of intellectual discourse, Ms. Sen recollects how the "intoxication of creativity, intellectual excitement and free exchange of ideas" energised the place.

A cauldron of creative energy, the Coffee House was the ultimate pilgrimage for the aspiring writer, the budding poet, the young painters, playwrights and filmmakers or the radical in politics. "It was a kind of lounge where new ideas would be generated and exchanged, where young, creative, thinking people would congregate," Sen said.

Amid the twirling haze of cigarette smoke, editors of little magazines would prod wannabe writers to submit their articles, while intricate cinematic aesthetics would be laid bare in discussions where Satyajit Ray or Mrinal Sen would hold forth.
Friendly air

Not withstanding the heated political debates during the turbulent Naxalite movement, the general air was one of friendly camaraderie.

Dipak Majumdar might break out into a full-throated rendition of a Rabindra Sangeet, while writers scribbled furiously on their sheets or enthusiastic painters sketched. Interestingly, there were not too many women who frequented the place in the mid-1960s, Sen recollects.

Today's trendy coffee parlours may have robbed the now derelict, but still popular, Coffee House of its sheen, but they have not been able to don the mantle of its intellectual aura. "That is never likely to be replicated," says Sen, a feeling echoed by writer Amit Chaudhuri, who points out the futility of trying to revive old activities and discussions in changed times.

"The coffee house, or other locations in north Kolkata, can be used for various events, maybe even rock or jazz gigs, to give them that sense of purpose," he adds.

"But people who want to kill time, still occupy tables for hours on end. Nobody seems to mind..." writes journalist Soumitra Das in his book A Jaywalker's Guide to Calcutta.

For those wishing to savour the feel of those times, if not the spirit, there will always be room and coffee enough.

But Kolkata hasn't yet covered the entire distance. We've merely arrived at the last leg of the journey and the final stretch now lies ahead. Often, the process of change loses its momentum and a myriad stumbling blocks stall the march of transformation.

What we now need is the last push that will put the city in the big league. But for that to happen, we require a concerted effort from all quarters.

Starting today, The Times of India launches a Kolkata Next campaign that will celebrate this change and try to find out what needs to be done and what Kolkatans would like their city to be. Through a series of articles, we will review the growth, look into the future and reflect your opinion on the Kolkata of tomorrow.

So, it is now your turn to voice your demands, ask for changes, point out planning deficiencies and offer valuable suggestions. We'll incorporate them in our articles and prepare a citizens' charter that will be passed on to the departments concerned. And rest assured, we'll keep track on your behalf of what the various government arms and developmental agencies are doing with regard to these demands. You, dear readers, have the right to know this and TOI will monitor the progress of your suggestions till they reach the stage of implementation.

According Rajneesh Mahajan, head, transaction services retail, Cushman & Wakefield, the next two years will see an additional 5.5 million square feet (sft) of shopping space getting occupied in Kolkata.

Most of the development is planned in the emerging suburban markets, primarily due to availability of land.

By the end of 2009, Kolkata will have 17 new shopping malls, with nearly six malls coming up at Rajarhat alone, according to Himon Sanyal, head, corporate services (East), Jones Lang LaSalle Meghraj.

Some of the big upcoming shopping malls in and around Kolkata include Acropolis (Rajdanga), Lake Mall, City Centre II , Forum II, Terminus, and DLF among others.

A noticeable trend in the retail real estate segment over the last year is the fact that vacancy in the established standalone markets in the city has been much higher than that in malls.

India's first speciality mall for electrical and electronic goods opened its doors on Friday, introducing a one-stop shop for all electrical and digital products. It also embodies the successful renovation-cum-conversion of an 80-year-old office building into a chic mall.

The makeover of GEC Magnet House on Chittaranjan Avenue into the 80,000 sq feet E Mall costs Rs 38 crore. Its locational advantage -- at the vortex of the electronic trade hub in the Chandni market-Madan Street-Ganesh Chandra Avenue belt -- has attracted major brands in television, home entertainment goods, office appliances, cellphones and electrical goods.

According to official estimates released on Friday, prices of primary articles, which includes major food and non-food items, rose by 0.2 per cent during the week.

While prices of fruits rose by 3.9 per cent during the week, the vegetable prices declined by 2 per cent. Prices of eggs, meat and fish also declined by 0.5 per cent within a week.

Monthly CESC bill for Forum is Rs 28 lakh Slash power consumption at Forum and use the surplus to light up and air condition The Courtyard
Energy management at both malls to be synchronised. For example, cooling ducts in Forum will be split into servicing the retail section/food court and multiplex
Increased automation, installation of variable drives in the main pump and heat recovery wheels will reduce energy consumption in the AC system
Waste water from Forum and The Courtyard to be recycled and used to wash cars

Glam is no longer enough. Malls in the city are vying to be the most eco-friendly now.

Forum Mall developer Rahul Saraf who built Technopolis, the city's first certified green building plans to power the upcoming high street mall, The Courtyard, without consuming an extra watt.