Bangalore: Retail Real Estate Market ReportJayanagar 11th Main Road, New BEL Road and Marathahalli...

Bangalore:Retail Real Estate Market Report

March 2013

A REPORT BY STRATEGIC ADVISORY GROUP

BANGALORE RETAIL STATISTICS: 2013 AND BEYOND

1

of operational shopping mall space of which 7% is vacant

is the average annual growth rate of mall rentals since 2010

of under-construction mall space of which 45% is pre-committed

is the average annual growth rate of high-street rentals since 2009

of planned mall space

is the Annual Average Trading Density per Useable Carpet Area for malls

7.65 million sqft

5.67 million sqft

13.79 million sqft

12%5%

9%5%

16K3K

1

to

to

to

BANGALORE: RETAIL REAL ESTATE REPORT

In the past few years, Bangalore’s retail journey has been

escalating with several international and national brands setting-up

their retail stores in the city. Favorable demographics, robust

economy, rising per capita income, easy availability of credit and

large scale retail developments have fueled the growth of

Bangalore’s retail market.

Shopping malls across the city are essentially anchored around a

department store and / or a hyper-market or super-market chain.

Until few years ago, entertainment in the shopping malls was

limited to multiplexes however; entertainment is now growing to a

status of being an important anchor. Brigade Orion at Rajajinagar

and Park Square in Whitefield along with multiplexes have roped in

various gaming retailers.

Bangalore today houses large format retail malls catering to the

luxury segment as well as value shoppers. The city is a prefered

retail destination in the country after Mumbai and Delhi. As of 2012,

total operational mall space in the city is summed to be 7.65 million

sqft and the prevailing vacancy is 7%.

Wholesale retail is one of the emerging formats in Bangalore.

Conducive Government regulations have led to the entry of many

Cash and Carry players in the city and several new brands are

progressively venturing into the city’s retail market. Future Group

with Salarpuria Sattva Group is set to launch first of its kind

wholesale market - World Market on Old Madras Road in the city.

Significant residential activity and availability of land fuelled the

development of shopping malls in SBD and PBD locations of the

city. In terms of GLA, PBD and SBD respectively account for 48%

and 42% of the total shopping mall space while CBD locations

contribute to 10% of the total mall space in the city.

Luxury retail has emerged as a new concept in the city with the

successful establishment of UB City at Vittal Mallya Road. This

segment has witnessed moderate but steady growth. However, the

presence of luxury retail is expected to be restricted to the CBD and

SBD locations.

Bangalore today houses neighbourhood, community and regional

malls. Mantri Square at Malleshwaram, Phoenix Market City at

Whitefield and Brigade Orion at Dr. Rajkumar Road are key

regional malls while The Forum at Koramangala and Royal

Meenakshi Mall at Bannerghatta Road are prominent community

malls in the city.

Shopping mall formats in the city continue to evolve over time. One

MG Road, in CBD is designed as an enclosed strip mall and lately

Karle Properties is planning to develop a Town Center, which is a

combination of open-air / high-street and an enclosed mall format.

Amongst the PBD locations, established residential micro-market

of ORR - Sarjapur has an opportunity for development of shopping

malls. Whitefield on the other hand has substantial operational mall

space and accounts for 69% of total operational space amongst

PBD locations. Locations of Mysore Road, Bannerghatta Road,

Tumkur Road and Hosur Road are in balanced state with retail

activity in these locations complementing the residential activities.

Retail activities across Bangalore North and Old Madras Road

(OMR) are burgeoning and have retail infrastructure development

potential in the next 3 - 5 years.

Rental values across shopping malls in the city are expected to

witness a steady growth within 1 - 3 years, owing primarily to a

healthy increase in the metropolitan population and relaxation of

FDI norms.

High-street locations will continue to coexist with the malls in the

city despite infrastructure issues and increase in mall space.

Rental values across high-street locations are likely to witness

nominal growth in short term.

EXECUTIVE SUMMARY

2

Retail developments in the city were mainly spread across two prominent clusters:

Akkipet, Ballepet, Chickpet, Cubbonpet, Avenue Road and other markets in petta region catered to the retail needs of people in old Bangalore

Shivajinagar, MG Road, Commercial Street and Ulsoor were key retail destinations serving the Cantonment area

Bangalore had two distinct administrative bodies:

Bangalore City

Municipality (BCM) &

Bangalore City Military

Station Municipality

(BCMSM)

Before 1949

Formation of Bangalore Development Authority

in 1976 led to

development of new

residential layouts namely

Jayanagar, HSR Layout

and BTM Layout

1970 - 1990

Areas around Brigade Road gained prominence as key destinations for

entertainment mainly due to presence of Opera House. Various theatres

namely Galaxy, Blue Moon, Rex and Plaza theatre commenced operations

during this time.

Formation of Bangalore

City Corporation (BCC)

by integration of BCM and

BCMSM

1950 - 1970

HISTORY OF RETAIL DEVELOPMENT IN BANGALORE

BDA developed neighbourhood shopping centres (BDA complexes) with retail shops to cater to the daily needs of residents within the layout. Jayanagar BDA

complex was the first BDA complex to commence operations in 1978, followed

by Indiranagar and Koramangala BDA Complexes.

3

Economic Liberalization in 1991 led to entry of various international brands in the city. Nike, Reebok, Adidas and KFC set-up their stores along high-street of

Brigade Road and Commercial Street.

Brigade Road started transforming in to a retail high street of the city; Mota Royal Arcade and 5th Avenue were among the first few modern format retail

shopping centres to commence operations during this period

In 2003, Metro Cash and Carry opened its stores at Yeshwantpur and Kanakpura Road

Bangalore’s first mall - The Forum Mall at Koramanagala was operational in 2004.

Emergence of Indiranagar 100 Feet Road as a preferred high-street location within SBD.

Economic Liberalization in 1991

In 1997, Government of India (GoI) permitted

100% FDI in wholesale

cash and carry retail

format

1990 - 2005

Government of India (GoI) allows 51% FDI in

single brand retail in

2006

Completion of Bangalore International Airport at

Devanahalli in 2008 led

to opening up of land

parcels for development

towards Bangalore North

Increase in demand for mall space led to development of newer malls primarily in CBD and SBD locations. Garuda Mall and Sigma Mall were among the

prominent malls to commence operations during 2006 - 07

UB City at Lavelle Road became Bangalore's first luxury shopping mall to start operations in 2008. With completion of UB City, Lavelle Road graduated to

become a luxury high-street location in the city

In 2009, Bangalore witnessed completion of Forum Value Mall at Whitefield, the city's first value format mall

Development of regional malls - Phoenix Market City at Whitefield, Mantri Square at Malleshwaram and Brigade Orion at Dr. Rajkumar Road started

operations between 2009 - 11

2006 - 2012

FDI in retail has paved way for entry of international retailers and FundsCity expected to witness entry of major brands like Carrefour, Walmart, IKEA

In 2012, Government of India (GoI) allows

100% and 51% FDI in

single and multi-

brand retail

respectively

2013& Beyond

FDI in retail paves way for entry of international retailers and fundsCity expected to witness entry of major brands like Carrefour, Walmart, IKEA

4BANGALORE: RETAIL REAL ESTATE REPORT

GROWTH OF RETAIL SECTOR IN BANGALORE

5

1McKinsey - McKinsey Global Institute – India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth, published in April 2010.

Growth in the IT/ITeS industry has led to migration of the

educated middle-class to the city, consequently steering

residential developments as well. Bangalore’s residential

market witnessed an annual absorption of 24,000

residential units during calendar year 2012 and the

residential market is projected to grow at an annual growth

rate of 15%, making the city one of the most promising

residential markets in the country.

Robust economy, growing population and high disposable

incomes have led to emergence of the city as a preferred

retail destination by both national and international brands

and over the years, retail spaces in the city have witnessed

an evolution in terms of design and quantum of spaces.

Bangalore today is the most sought after retail destination

in the country after Mumbai and Delhi mainly due to the

following reasons:

At 9.6 million, Bangalore urban district is the fifth most

populous urban district in India as of 2011. It registered a

decadal growth rate of 47% as compared to 2001. The city is

expected to continue its growth trajectory; and population

for the year 2021 is pegged at 14.0 million.

Bangalore’s economic development is attributed to the

healthy growth of its IT/ITeS industry. Currently the sector

accounts for more than 1.0 million jobs in the city and will

continue to add over 100,000 jobs every year for next 3 – 5

years. Apart from IT/ITeS sector, the city is also witnessing

advancements in the field of biotechnology, aerospace and

aviation sectors.

The growth in the IT/ITeS sector has been well supported

by the growth in the per-capita income of the city. As per 1McKinsey , by 2030 Bangalore is likely to have the highest

per-capita GDP among all the Indian cities.

Retail growth in the city is linked to consumer needs and

behavior. Rising income levels and global exposure have

resulted in increased purchasing power. Additionally,

consumer spends have shifted to lifestyle products and

services from daily necessities.

Growing Population

Robust Economy and Growing Per-capita Income: Shift from necessities to lifestyle products:

In the past few years, Bangalore’s retail journey has been growing with several international and national brands setting-up their retail stores in the city. Favorable demographics, robust economy, rising per capita income, easy availability of credit and large scale retail developments have fueled the growth of Bangalore’s retail market.


Figure: Key High-Street locations of Bangalore

BANGALORE HIGH STREETS

Commercial Street

M G Road

U B City

Lavelle R

oad

Garuda Mall

1 M G Road

Ind

iran

ag

ar

100 F

eet

Ro

ad

Bri

gad

e R

oad

Byappanahalli

Bangalore Club

Metro Station

Metro Rail Phase I - Reach 1 (Operational)

Existing Malls

Key high-street locations

7

Metro Rail Phase I - UG2 (Under-Construction)

Vittal Mallya Road

The high-street locations of Bangalore have captured the retail trends and over the years have adapted to changing retail needs and consumer aspirations. Despite offering better brand visibility as against a shopping mall, key challenges faced by these locations include traffic congestion, lack of parking space and unobstructed pedestrian walkways.

A high-street synonymous with a market or bazaar is a prime

retail hub in a city with street aligned retail stores. These are

predominant avenues for retail, trading and entertainment

activities. Early high-street locations of Brigade Road and

Commercial Street have been in existence since 1950s are

located in close proximity to the CBD.

With the spatial expansion of the city, the high-street locations

are no longer confined to the CBD area. During the last decade

prominent high street locations of Indiranagar 100 feet Road,

Jayanagar 11th Main Road, New BEL Road and Marathahalli

have emerged towards the Secondary Business Districts (SBD)

and Peripheral Business Districts (PBD).

The high-streets of the city exhibit distinct characteristics and

cater to a diverse target segment. Brigade Road and

Commercial Street continue to remain the most sought after 2high-street locations in the city; Lavelle Road attracts High

Networth Individuals (HNIs) and super rich of the city, offering

niche and exclusive products. Marathahalli over the years has

developed as a location for discount / outlet stores, whereas,

New BEL Road has emerged as an important high-street

location catering to residential areas of Sanjaynagar,

Sadashivnagar and Rajajinagar.

Of the SBD locations, Indiranagar 100 feet Road has evolved

from an upmarket plush residential location to one of the most

preferred retail destinations by both national and international

brands. High-street locations of Jayanagar and Malleshwaram

continue to interest retailers in the women’s apparel, gems and

jewelry segment.

Key areas witnessing increased retail activities in Bangalore

North include Kamanahalli Main Road and Sahakarnagar while

Marenahalli Road (JP Nagar – ORR stretch) towards south-

west of the city is gaining prominence as a retail high-street

mainly due to limited shopping mall space in the vicinity.

During 2009 – 12, rental values across high-street locations of

the city grew annually in the range of 5 – 9%mainly due to limited

upcoming supply and lower vacancy rates.

Bangalore’s high-street locations continue to attract national and

international retail brands regardless of increased mall space in

the city due to higher brand visibility and considerable footfalls.

However, traffic congestion, lack of unobstructed pedestrian

walkways and limited parking facilities are some of the basic

concerns that require improvement.

3When profiling of tenants in select high-street locations of the

city- a key observation was high-street locations are preferred

mainly by Apparel and Footwear Tenants followed by Food and

Beverages (F&B), and Electronic Goods, reason being

consumer buying trends and real estate cost.

Characteristics of four prominent high-street locations in the city -

two established high-streets and two having evolved in the last of

couple of years have been addressed in the study.

2Lavelle Road includes areas of Lavelle Road and Vittal Mallya Road3Profiling of tenants is based on the number of stores and area of the stores has not been considered for the same.

Figure: Product Category Distribution: High-Streets

54%

7%

9%

3%

16%

7%

Automobiles

Apparel & Footwear

Others Personal Care / Watches / Jewellery

Electronic & White Goods

Food & Beverages

Books / Stationery / Gifts

4%


Figure: High-street Stacking: Brigade Road

BRIGADE ROAD

Brigade Road

Rock

Band

Cauve

ry H

andic

raft

s

Pum

aR

egal W

atc

h &

Co

Band B

ox

Dye

rs

KF

C

Redta

pe,

Bolly

wood,

Lee

Will

s Life

styl

e

Fly

ing M

ach

ine,P

lanet

M,H

ote

l Curz

on

Court

,Pro

line,A

ath

ithya

Veg

Rest

aura

nt,

Adid

as

Café

CoffeeD

ay,

Cro

codile

,K

outo

ns,

Colo

urp

lus

Sony

Centr

e

India

n T

err

ain

Basi

cs L

ife

Shoe W

agon,T

rend S

hoes,

INO

A

Pepe J

eans

Bla

ck B

err

ys

Metr

o S

hoes

Mc

Donald

s, A

rrow

, W

oodla

nd

Spyk

ar

Jeans,

RP

G,

Cellu

com

Noki

a

Celio

sB

rigade G

ard

ens

Oxy

gen,

Bata

Monarc

h P

laza

-Scu

llers

,Tim

ex,

Kenko

s,C

onve

rse,J

ealo

us

21,

Citi

bank

AT

M

Monarc

h H

ote

l

Adig

as

Reebok

Rock

port

Levi

s S

quare

Kash

mir A

rtIn

dust

ries

Churc

h S

treet

Red H

ouse

Road

Arr

ow

Shop the T

op

Louis

Phili

ppe

Calv

in K

lein

, S

ango

Shoes,

Reebok,

Arc

hie

s G

alle

ry

Vanhuese

n

Park

Ave

nue

Lee

Jack

& J

ones

Shoe M

ake

r

Wra

ngle

r

VIP

Piz

za H

ut,T

he D

onut B

ake

r,C

afé

Coffee D

ay,

Bask

in R

obbin

s,In

n B

rigades,

On

Da R

ocz

z,F

usi

on L

ounge

Fift

h A

venue-t

he W

orld o

f T

itan,

Tim

ex,

HP

Reta

il S

tore

,M

ystiq

ue S

alo

ns,

Zave

ri B

rosJ

ew

elle

rs,

Com

pute

r P

lanet

U S

Polo

,Hote

l Shangri-L

a

Jute

Cottage

Health

& G

low

,Megam

art

,Jo

hn P

laye

rs,F

ash

ion@

Big

Baza

r

Nilg

iris

,Welli

ngto

n C

afe

Am

erica

n C

orn

er

Rex

Cin

em

as

Today'

s B

aza

r

Mota

Roya

l Arc

ade-L

evi

s S

trauss

,Relia

nce

Web W

orld,V

iva,

Cottons

by

Centu

ry,R

eid

& T

ayl

or,

Coffee W

orld

Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time.Map not to the scale.

Apparel & Footwear

Others Personal Care / Watches / JewelleryElectronic & White Goods

Food & Beverages Books / Stationery / Gifts

9

Brigade Road forms the stretch between Cauvery Store on M.G.

Road and Opera House abutting Residency Road.

One of the most prominent high-street locations of Bangalore,

Brigade Road has been in existence since the British era.

During 1970 - 80s, this high-street gained prominence as an

entertainment hub of the city with existence of theatres namely

Opera House and Rex.

This high-street also boasts of first few shopping complexes in the

city; Mota Royal Arcade and Fifth Avenue are operational since

early 1990s.

Presence of shopping complexes strengthened Brigade Road as a

high-street location and over the years this location has emerged

as the most preferred location for any new brands venturing into

city. The high-street houses flagship stores of various retail brands

and is dominated largely by Apparel and Footwear brands.

This high-street in coming years will continue to attract retailers

owing to improved connectivity with the completion of Metro Rail

Phase I. This is certain to boost footfalls across this location. Due to

limited availability of new supply and low vacancy rates, rental

values across this high-street location are expected to increase

nominally in short to medium term.

Driving Factor Location; proximity to MG Road; one of the early high-street locations

Operational Since 1980s

4Rental Values (INR/sqft/month) Ground Floor

Shop Size (sqft) 1,000 – 10,000

Existing Shopping Malls in proximity Garuda Mall (0.5 km), 1 MG Road (2 km)

Advantages Prime location, easily accessible, connectivity via Metro Rail

ConcernsLimited parking space, one - way traffic allowed, no public transport along the high-street

350 - 450

5Average Annual Rental Appreciation 9%

6Capital Values (INR/sqft) 30,000 - 40,000

Figure: Product Category Distribution: Brigade Road

Apparel & Footwear



Food & Beverages


Brigade Road

4Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%5Average annual rental appreciation figures are considered for the period between 2009 - 20126In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%

7%

53%

18%

6%

9%

7%


Figure: High-street Stacking: Commercial Street

COMMERCIAL STREET

Commercial Street

V D

as

& S

ons

Pan A

merica

Asw

an L

ifest

yle

E-S

quare

West

side

Pete

r E

ngla

nd

Masp

ar

Syl

con S

hoes

Polic

e S

tatio

n

Phili

ps

Will

s Life

styl

eD

esi

re M

ulti

natio

nal

KF

C

Arr

ow

Relia

nce

Sta

tionary

Mart

Vanheuse

n

Sattar

Sons

Noki

a, R

abani

Hako

ba S

ole

s

Y &

O

Hush

Puppie

s,R

ay

Ban,M

ufti,F

Square

,K

onark

Rest

aura

nt

The W

ear

House

Lafa

nso

Toy

World

Arr

ow

Bla

kM

och

i, Lals

The W

orld o

f T

itan

C.K

rish

naia

h C

hetty

& S

ons

Roci

a S

hoes,

Bags

Woodla

nd,A

rrow

Diy

a

Boss

ini

Colo

rplu

s,A

rchie

s G

alle

ry

Favo

urite

Shop

Bom

bay

Dye

ing

CC

D,B

elm

onte

,Haje

e O

mer,

lem

on

Mann

VIP

,Raik

ars

Roya

l Tra

din

g C

o

New

U,B

iba

Lee

Rajs

ons,

Adid

as

Anand S

weets

Mula

nis

Optic

al G

alle

ry

Hum

India

Soch

Lill

iput, M

agnet

SriK

rish

na J

ew

elle

rs

Catwalk

Davanam

Reid & Taylor

Manyavar

Levis

Metro

Ice creams

RelianceTrends

East

ern

Sto

res

Kaly

ani S

are

es

Zio

n M

oney

S.M

oham

ed I

smail

& C

o

Megam

art

Mom

& m

e

Jock

ey,

Banday

Bro

thers

Handic

raft

s

Parm

anand

Em

pire S

tore

s

Max

Handic

raft

s M

use

um

Louis

Phili

ppe

Anglo

Am

erica

n O

ptic

als

Taru

ni,F

lyin

g M

ach

ine

Sense

s

Mela

nge

Mc

Donald

s

Kash

mir H

ouse

Tim

ex

Blo

ssom

Dulh

an

Nik

e

Bhola

Tra

ders

Bala

ji E

xport

s

Pla

net

Fash

ion

Reebok

Shubh J

ew

els

Slin

g

Aanch

al

Dam

an

Fab I

ndia

,Scu

llers

Faza

ls

OR

RA

Outf

it

City

Walk

Alle

n S

olly

Pre

stig

e T

he M

an S

tore

Alle

n S

olly

U S

Polo

,Unio

n B

ank

Child

rens

Corn

er

DC

M

Cott

age I

ndust

ries

Em

porium

West

ern

Sto

res

Ela

n W

om

an

Woodys

Rest

aura

nt

Vero

mada

World o

f W

om

an

Cott

ons

By

Centu

ry

Khaza

na J

ew

elle

ry

Wra

ngle

r,K

anz,

Lib

ert

y S

ilks

SubanjaliSilks

Apparel & Footwear

Others Personal Care / Watches / JewelleryElectronic & White Goods



Jew

elle

rs S

treet

Nara

yana P

illai S

treet

Kam

ara

j Road

11

Driving Factor Proximity to established markets - Shivajinagar and Russel Market



Shop Size (sqft) 500 - 30,000

Existing Shopping Malls in proximity Garuda Mall (2.5 km), 1 MG Road (2.0 km)

Advantages Prime location, easily accessible

ConcernsSmaller format retail stores, limited parking space, congested during peak hours and no entertainment options

300 - 325


9Capital Values (INR/sqft) 26,000 – 28,000

Commercial Street

Commercial Street emerged as a prominent retail street

serving the then Cantonment area mainly because of its

proximity to Shivaji Nagar. Earlier, this high-street was

essentially a traditional market characterized by small format

retail stores.

Commercial Street now accommodates contemporary brands

and modern format retail stores while simultaneously retaining

its character and the traditional bazaar feel. This high-street

endures sizeable retail stores mainly targeting women’s

apparel and accessories segment.

There are no operational or planned malls in this high-street;

existing department stores along this high-street include

Westside and Max.

Rental values across this high-street location are likely to

continue to the existing growth trend mainly due to lack of

newer retail spaces and lower vacancy rates.

Figure: Product Category Distribution: Commercial Street

74%

6%5%

6%

2%

7%

Apparel & Footwear



Food & Beverages




Key challenges faced by this high-street is lack of availability of

parking slots leading to congestion during peak shopping hours

and weekends.

Figure: High-street Stacking: Lavelle Road and Vittal Mallya Road

LAVELLE ROAD AND VITTAL MALLYA ROAD

Vittal Mallya Road

Lavell

e R

oad

Vittal M

allya Road

Walton Road

Lav

elle R

oad

Dolphin Kidswear

Scent

Cinebells

Le Creuset

Galleria Time & Space

I art

Harley Davidson Showroom

Kaya Skin Clinic

Reward

Crisp

Oryza Spa

Hakims Aalim

Java City

Cloud Bar

The Biere Club

H20 C

ue

Tom

my,

Folio

ICIC

I,Y

oung &

Young L

ooks

The C

olle

ctiv

e

Atm

osp

here

,H2O

Pum

a

Levi

s

Labaan

Mais

on

Chemistry

Ruosh, BounceN S Jewellers

Café Coffee Day,Forest Essential

Biguine Paris Saloon & Spa

Ferns N Petal

Porsche Showroom

Honda Showroom

Maruti Suzuki Showroom

Automobiles

Apparel & Footwear



Food & Beverages


UB City

Sunny’sLa Cristaal

Limelight


Cinnamon

13

Lavelle Road high-street encompasses areas of Vittal Mallya

Road, Lavelle Road and Walton Road.

Once an upmarket, plush residential area, Lavelle Road

currently has established itself as a luxury high-street of

Bangalore.

An upmarket retail high-street, it is marked by the presence of

signature stores of various luxury apparel brands and luxury

spas & salons. Additionally it is also witnessing the opening up

of luxury automobile showrooms namely BMW Cars, Porsche

and Harley Davidson.

Key under-construction retail buildings in this high-street

include Bagmane Ventures (0.02 million sqft).

In early 2000s, this high-street had a few exclusive restaurants

and lounges. Completion of UB City in 2008 and proximity to

affluent neighbourhood triggered the development of luxury

retail spaces along this high-street location.

Lavelle Road will continue to remain a luxury destination of the

city with various luxury brands eyeing to enter Bangalore.

Rentals across this high-street are likely to retain the past growth

trend in short term.

Driving Factor Development of UB City and proximity to affluent locality



Shop Size (sqft) 2,000 - 12,000

Existing Shopping Malls in proximity UB City

Advantages Prime Location and an upmarket neighbourhood, pedestrian friendly

Concerns Non - availability of public transportation

200 - 265



Lavelle Road and Vittal Mallya Road

Automobiles

Figure: Product Category Distribution: Lavelle Road andVittal Mallya Road

33%3%

25%

18%

9%

9%

Apparel & Footwear



Food & Beverages


3%



Figure: High-street Stacking: Indiranagar 100 Feet Road

Indiranagar 100 Feet Road

Old

Airport

Road

Old

Airport

Road

Barb

eque N

atio

n

Sta

nle

y B

outiq

ue

Relia

nce

Dig

ital

Muft

i, T

imex

Sai G

alle

rium

Mahara

ja F

urn

iture

's

Veneta

Cuci

ne

Pro

vogue

Park

Ave

nue

Nas

Hom

e

The B

asi

l Iko

n H

ote

l

100ft

Boutiq

ue R

est

aura

nt

Pum

a

Levi

’s

Lee

More

Super

Mark

et

Am

erica

n T

ourist

, W

rangle

r

Alle

n S

olly

, Louis

Phili

ppe,

Renesa

s

Helio

s, S

om

any

Bla

ck B

err

y

ING

Vys

ya, T

he B

aby

Shop

Axi

s B

ank

Nadira I

qbal

Guess

, T

he B

ody

Shop

Sony

World

Cro

ma

Good L

ines

Tom

my

Hilf

iger

Reid

& T

ayl

or

Pla

net

Fash

ion G

rande

Van H

euse

n

Som

a

Relia

nce

Tre

nds

Chef

Bake

rs

Giria

s

Calif

orn

ia P

izza

Kitc

hen

Sansk

ruti

Silk

s, S

am

sung

KT

M B

aja

j Pro

bik

ing

Chem

istr

y

Gin

i Jony

Pai I

nte

rnatio

nal

KF

C &

Piz

za H

ut

Nandhin

i Pala

ce

Main

land C

hin

a

The B

om

bay

Sto

re

Pepe

Khiv

raj B

aja

j

Adid

as

Rajd

hani

Tata

Doco

mo

The A

rvin

d S

tore

Poe, C

elio

Copper

Chim

ney,

Spaghetti K

itchen

Vodafo

ne

Metr

o S

tyle

Raym

ond's

Sta

ple

s

Indig

o N

atio

n

Vis

ion E

xpre

ss, O

ffic

e D

epot

World o

f T

itan, T

itan E

ye+

Nik

e

Boss

ini

VLC

C

Reebok

Litt

le Ita

ly R

isto

rante

Bar

SH

Depart

menta

l Sto

res

CLA

RK

S, Lim

e L

ite

Izod, A

rrow

Terr

azz

o R

est

aura

nt

Viv

eks

VG

P, F

ood W

orld S

uper

Mark

et

GK

B O

ptic

als

, A

irce

l

Art

& F

ram

ing

Peta

ls, F

ore

ver

new

Srish

ti G

old

& D

iam

ond J

ew

elle

ry

Sam

sonite

Jack

& J

ones

Woodla

nd, M

etr

o

E-Z

one

VIP

Lounge

Bata

Unile

t

Hush

Puppie

s, P

ave

rs E

ngla

nd

Café

Coffee D

ay,

The V

illage

Relia

nce

Foot P

rints

Will

s Life

styl

e

People

Pete

r E

ngla

nd

Double

Road

15 T

H M

ain

Road

th13

Main

Road

th12

Main

Road

th6

Main

Road

rd3

Main

Road

INDIRANAGAR 100 FEET ROAD

Apparel & Footwear

Others

Personal Care / Watches / Jewellery


Food & Beverages



CM

H R

oad

15

Proximity to an affluent residential catchment

13 Rental Values (INR/sqft/month) Ground Floor

Existing Shopping Malls in proximity Gopalan Signature Mall (3 km)

Advantages Easily Accessible, connectivity via metro, free car-parking and affluent catchment

Concerns Traffic Congestion during peak hours; limited availability of car parks

175 - 220



Indiranagar 100 Feet Road

Indiranagar 100 feet Road constitutes the stretch between

Domlur Junction (Stanley Boutique) and the Old Madras Road

Junction.

During its inception, this area was conceptualized as a

residential area. Post amendment in the zoning regulations

that facilitated development of commercial / retail properties,

this area started witnessing an increase in retail activity

primarily opening of restaurants, cafes and lounges.

As compared to other high-streets of Bangalore, Indiranagar

100 feet Road has a better planned layout, well laid pedestrian

walkways as well as free parking facility.

Areas around 12th Main command higher rents as opposed to

areas around Domlur flyover or near CMH Road. Additionally,

completion of Metro Rail Phase I in this region has improved

connectivity between CMH Road to Domlur Junction.

However, it has adversely impacted the stores between Old

Madras Road and CMH Road by reducing their visibility.

Over the years, the high-street has witnessed penetration of

various brands in Apparel and Footwear, Electronic Goods

segment apart from the F&B segment.

In the coming year rental values across this high-street are

likely to continue the past growth trend.

Figure: Product Category Distribution: Indiranagar 100 feet Road

37%

11%

7%

9%

26%

10%

1,500 - 12,000

Operational Since

Driving Factor

Shop Size (sqft)

1990s

Apparel & Footwear



Food & Beverages




17

*The city has been categorized into three major micro-markets - CBD, SBD and PBD. Please refer Terms of Reference for spatial classification of the city.

7.65

7.155.67

2.61

13.79

Figure: Shopping Mall Space Statistics

mill

ion s

qft

OperationalMall Space

Under-ConstructionMall Space

PlannedMall Space

0

2

4

6

8

10

12

14

Stock Occupied

*Micro-market

Operational Area Under-construction Area

Stock Vacancy

Planned MallSpace

Total Mall Space 7.65 0.50 5.67 3.06 13.79

CBD 0.78 0.07 0.31 0.31 -

SBD 3.19 0.14 1.46 0.79 1.82

North - East 0.41 0.06 0.32 0.20 0.80

South - East 0.69 0.03 0.42 0.02

0.62South - West 0.40 0.72 0.57

0.40North - West 1.69 0.02

PBD 3.68 0.29 3.90 1.96 11.97

Whitefield 2.53 0.24 0.87 0.30 1.58

ORR - Sarjapur 0.31 - 2.50- -

Bannerghatta Road 0.38 -

Kanakpura Road - - 0.45 0.28 2.27

Mysore Road 0.34 -

Tumkur Road - 0.25 0.15 0.30

Bangalore North 0.12 0.05 0.80 0.60 2.45

Hosur Road - - 1.35 0.45 0.80

Old Madras Road - - 0.18 0.18 0.82

-

- -

Stock Vacancy

0.03

-

- 0.80-

- - 0.45

Table: Shopping Mall Space Inventory (GLA in million sqft)

BANGALORE: SHOPPING MALL STATISTICS

Vestian Estimate

Emergence of Bangalore as a preferred retail destination led to

entry of several national and regional developers. Key

developers including Phoenix Mills Limited, Brigade Group

and Mantri Group continue to expand their retail portfolio in the

city. The city today has more than 20 operational shopping 16malls accounting for 7.65 million sqft.

As of 2012, operational shopping mall space in the city is 7.65 million sqft; projected to double by 2016.

Non-availability of large land parcels in CBD locations and

significant residential activity in PBD locations has led to

increased development of shopping malls along PBD 17locations. In terms of Gross Leasable Area (GLA) , PBD and

SBD account for 48% and 42% respectively of the total

shopping mall space and CBD locations contribute to 10% of

total mall space in the city.

Secondary Business District (SBD) locations over the past few

years have witnessed increased supply of large land parcels

for redevelopment paving the way for development of

shopping malls. Retail activity in this micro-market is expected

to continue the growth trajectory mainly due to growing

catchment area, limited mall space in CBD locations,

availability of large land parcels for development and

enhanced connectivity via Metro Rail phase I. Key malls that

commenced operations in last one year in SBD locations

include Brigade Orion (0.75 million sqft) at Dr. Rajkumar Road

and Mantri Square (0.93 million sqft) at Malleshwaram.

Amongst the PBD locations, established residential location of

ORR – Sarjapur provides opportunity for development of

shopping malls in short term, while Whitefield on the other

hand has witnessed substantial penetration of retail activity.

Locations of Hosur Road, Bannerghatta Road, Kanakpura

Road, Mysore Road andTumkur Road support retail

infrastructure complementing the residential activities. Retail

activity in Bangalore North and Old Madras Road (OMR) is

burgeoning and these micro-markets have high potential for

development of shopping malls in medium to long term.

Whitefield accounts for highest mall space; it constitutes nearly

69% of total mall space in PBD locations. Whitefield over the

years has emerged as a self-sustaining location with

commercial, residential and retail developments. Key

operational malls in this location include Inorbit Mall (0.34

million sqft), Phoenix Market City (0.97 million sqft) and Park

Square Mall (0.45 million sqft). Owing to significant existing

and impending mall space, Whitefield exhibits lesser potential

for development of new malls in short to medium term.

Although ORR-Sarjapur stretch is one of the most promising

residential locations of Bangalore, the location is currently

dependent on SBD locations for its retail needs. Soul Space

Spirit (0.3 million sqft) is the only operational mall in this

location. With no malls under construction, this location is

highly suitable for development of shopping malls in short

term.

Kanakpura Road currently lacks presence of shopping malls,

but has substantial under-construction and planned mall

space. Key shopping malls in advanced stage of planning

include Mantri Arena (0.82 million sqft), and Puravanakara

Mall (0.45 million sqft).

Lack of availability of land for development, restricted land-

use zoning and proximity to SBD locations of Koramangala

and Jayanagar are key reasons that have restricted the

development of malls in Bannerghatta Road. Currently the

location has one operational mall Royal Meenakshi Mall (0.34

million sqft). This location has limited potential for

development of malls mainly due to significant mall supply in

SBD locations.

Mysore Road currently accounts for nearly 0.5 million sqft of

operational mall space. The malls here mainly cater to daily

requirements, lacking entertainment and fine-dining options.

Limited residential activity in this location has restricted

development of malls in this micro-market and has limited

upcoming and planned mall space.

Growth in residential activity over the past few years has led to

increased retail demand along Tumkur Road and this location

is a potential destination for mall activity. Currently, the

location does not have any operational mall, but houses Metro

Cash and Carry Outlet (Cash and Carry format). Vaishnavi

Sapphire (0.25 million sqft) is one of the key malls likely to be

operational by 2013 end and BIG Shopping Center is

expected to open their flagship store BIG (0.42 million sqft) in

this location.

Limited residential activities along Hosur Road has restricted

the development of malls in this region. Presently, there are no

operational malls, however, with a few large-scale residential

projects coming up and with the proposed Metro Rail phase II-

this location is set to witness increased retail activity. Neo Mall

(1.35 million sqft) at Patel Neo Town is among the key

upcoming malls in this location.

Old Madras Road, of-late has witnessed increased residential

activity with major Class A developers launching their

residential projects. Currently, not many retail projects are

planned in this micro-market however; retail activity across

this micro-market is anticipated to gain momentum in the

medium to long term. Salapuria Sattva Group is set to launch

the World Market (1.0 million sqft) in this location.

Despite commercial activity in Bangalore North being in

nascent stage, this region has witnessed increased residential

supply. Shift in the developers’ interest towards this location

has made way for many planned retail projects. Key

developers including Brigade Group, MFAR Holdings,

Century Group and Ozone Group have planned shopping

malls in Bangalore North.

16Indicates Gross Leasble Area (GLA); unless and otherwise mentioned in the report mall size is indicated in terms of GLA 17GLA is the total floor area designed for a tenant’s occupancy and exclusive use, including basements, mezzanines, or upper floors measured from the center-line of joint partitions and from outside wall faces. It is the space, including sales area and integral stock areas for which tenants pay rent.


Malls in CBD

1 G Corp 1 MG Road

Operational

6

72

3

4

5

Suraj Cambridge Mall

Embassy Galaxy MallEVA Mall

Garuda Mall

The Collection

Sigma Mall

Under Construction Planned

Malls in SBD

Operational Under Construction Planned

8

9

10

11

12

Salarpuria Oasis Mall

The Forum

Swagath Garuda

Gopalan Innovation Mall

Mantri Junction

13

14

Mantri Square

Orion Mall

15 Gopalan Signature Mall

16 Leela Galleria

17 Vega Mall Sobha Grand Mall

World GT Mall

21

18

19

Karle MallCity View

Orion Mall - 2 Nitesh Mall23

22

Malls in PBD

Operational Under Construction Planned

35

36

24

25

29

26

27

28

37

Grand Mall & TowersSoul Space Arena Gopalan Destination Mall

Virtuous Xander MallPhoenix Market City Prestige Technostar

MBD ZephyrInorbit Mall

Park Square

Forum Shantiniketan Mall

Salarpuria World Market

The Forum Value Mall

Cosmos Mall

46

47

48

38

30

39

40

Soul Space Spirit

Mantri Mall, Agara

Perk In Mall

Neo Mall

44

45

49

Royal Meenakshi Mall31

41

Gardens Galleria

32

42

Gopalan Arcade Mall

Vaishnavi Sapphire

43

MSR Regallia Elements

50

33 Gopalan Legacy Mall

34 Esteem Mall

RMZ Galleria

Mantri Mall, Kanakpura

Puravankara Mall

51

52

Lotus Mall53

Prestige Falcon City

54

55 Monarch Celestial

Century Istana High Street56

Karle Town Center

BANGALORE: SHOPPING MALLS

20

19

Raheja INXS Mall

Jayanagar

Bangalore International Airport

Yelahanka

Outer Ring Road

Frazer Town

Out

er R

ing

Roa

d

EPIP ZONEWHITEFIELD

Outer Ring R

oad

HSR Layout

HMTTownship

NH 7: To Hyderabad

Propo

sed

Perip

hera

l Rin

g Roa

d

Proposed Peripheral Ring Road

NH 4: To Chennai

NH 4: To Mumbai

Hebbal

BIEC

HesaraghattaCross

Peenya Industrial Area

NIC

E R

ing R

oad

NIC

E Ring R

oad

NICE Ring Road

Nagawara

Banaswadi

MG Road

Krishnarajapuram

Byppanahalli

J.P. Nagar

Bangalore CityRailway Station

Rajaji Nagar

Malleshwaram

RMVExtension

Vijayanagar

Mysore Road

Kengeri

Banashankari

Puttenahalli

Thalagattapura

Kanakp

ura

Road

NH 209: To Coimbatore

SH 17:To Mysore

Proposed Peripheral Ring Road

BTM Layout

Gottigere

Begur

RichmondTown

Koramangala

NH 7: To Salem

Bellandur

Brookefield

ITPB

Pro

pose

d P

erip

hera

lR

ing R

oad

Magadi RoadPalace

Grounds

56

55

43

42

54

34

41

33

32

53

52

51

4050

31

39

49

47

48

30

2928

38

37

2646

45

2536

44

24

35

16

23

15

18

22

14

13

21

12

1711

10

9

8

5

4

3 2

6

1

Proposed Peripheral Ring RoadNICE Ring Road

Outer Ring Road Metro Rail Under Construction

Metro Rail Operational

Key Residential Areas

19

20

20

Elevated Express Highway


Bangalore: Shopping Mall Snapshot

Old Madras Road

Bannerg

hatta R

oad

Marathahalli

Varthur

Old Airport Road

Indiranagar

Hen

nur R

oadTha

nnis

andr

a R

oad

Sarjapur Road

ELECTRONIC CITYPHASE I & II

Bommasandra

27

7

C.V.RamanNagar

Bella

ry R

oad

Tumkur Road

Mys

ore R

oad

Hosur R

oad

21

SHOPPING MALL: CLASSIFICATION

Shopping malls in Bangalore can be predominantly categorized as neighbourhood, community and regional malls based on the anchor tenant, GLA and size of the trade area it serves.

Table: Basic characteristics of Shopping Malls

Neighbourhood Mall

Community Mall

Regional Mall

GLA (sqft) Trade Area RadiusAnchor Tenants

100,000 – 300,000 2 - 3 kmSuper-market / Hyper-market chain

Department Store /Hyper-market / Multiplex

1 or 2 Department Store /Multiplex / Entertainment Retailers

Type of Mall

Table below compares the broad indicators to define the shopping

malls.

Neighbourhood Mall: Neighbourhood mall focuses on

convenience goods that meet the daily needs of an immediate

neighbourhood. Usually anchored by a super-market,

neighbourhood malls tend to serve a trade area within 2 – 3 km

radius and GLA for these malls range between 100,000 –

300,000 sqft of GLA.

Gopalan Arcade Mall (0.16 million sqft) and Gopalan Legacy

Mall (0.18 million sqft)are prominent neighbourhood malls in

the city. Elements Mall with Auchan hyper-market as one of its

anchor tenant and Vaishnavi Sapphire Mall with More super-

market as its anchor tenant are among the key upcoming

neighbourhood malls.

Community Mall: Community mall while providing daily

necessities also offer a wider range of merchandise, home

furnishings and entertainment options than the neighbourhood

mall.

Forum Mall (0.36 million sqft) at Koramangala, Royal

Meenakshi Mall at Bannerghatta Road (0.38 million sqft) are

among the operational community malls in the city.

Forthcoming Vega City Mall (0.42 million sqft) on Bannerghatta

Road is likely to evolve as a community mall.

Regional Mall: A regional mall offers a wider range in terms of

retail category, entertainment and food. This kind of a retail

development depending on its tenancy mix has a potential to

cater to the trade area ranging from 5 – 15 km.

Brigade Orion at Dr. Rajkumar Road (0.75 million sqft), Mantri

Square at Malleshwaram(0.933 million sqft) and Phoenix Market

City (0.97 million sqft) at Whitefield are categorized as regional

malls. Planned mall by Nitesh Estates at Indiranagar (0.8 million

sqft) and Mantri Mall (1.20 million sqft) at Agara Junction are

likely to be positioned as regional malls by virtue of its size

thereby catering to a larger catchment.

Shopping malls can be classified based on its tenancy mix and

size of the trade area it serves, not solely on the GLA of the

mall. Adapting from the definition as suggested by Urban Land

Institute (ULI) and ICSC, shopping malls in the city can

essentially be categorized as:

Specialty Mall: A specialty mall employs a unifying theme that is

carried out by the retail stores in their merchandize. These malls

may rely on discretionary income expenditures and provide one-

stop shopping experience for a specific product type or price

segment. These malls could be anchored by an upmarket /

premium Multi-Brand Outlet (MBO) format while fine dinning and

leisure also play a key anchor role.

The Collection - UB City at Vittal Mallya Road can be categorized

as a Specialty mall designed as a Luxury Mall. Upcoming malls

with alike theme in the city include Galaxy (0.19 million sqft) by

Embassy Group at Residency Road and City View by Westcourt

Real Estate (0.06 million sqft) on Bellary Road.

However, specialty malls focusing exclusively on sale of home

and furnishing products, cars and auto-accessories, gold or

electronic and white goods are currently un-explored in the city.

200,000 – 500,000

600,000 – 10,00,000

3 - 5 km

5 - 15 km

International Council of Shopping Centers (ICSC) defines a

shopping mall as a group of retail establishments that is

planned, developed, owned and managed as a single property

with on-site and basement parking. Shopping mall’s size and

orientation are generally determined by the market

characteristics of the trade area served by the mall.

BANGALORE: RETAIL REAL ESTATE REPORT 22

23

SHOPPING MALL: CLASSIFICATION

Over the years, shopping malls in the city have continually

invented a variety of additional real estate products to

accommodate advancing trends in retailing. As a result,

shopping malls based on their configuration, can be further

categorized as follows:

Enclosed Mall: These are enclosed malls, with a climate-

controlled walkway between two facing strips of stores.

Until the last decade, development of malls was at a nascent stage. However, with the progress of the city’s retail infrastructure towards a differential phase, Bangalore is expected to see entry of new mall formats including a Strip Mall and a Town Center.

Open-air malls:

Strip center: A strip center is a single or multi level row of

stores or service outlets managed as a coherent retail entity,

with on-site or basement parking. A strip mall usually designed

on a strip of land is configured in a straight line, or has an "L"

shape depending on the dimensions of the land parcel.

Town Center: A town center is defined as an open-air center

with public space and street front retailing on at least two

pedestrian streets. Town centers are essentially parts of

integrated developments with residential, office and civic uses

along with retail component thereby creating an ambience of

dowtown.

One MG Road (0.18 million sqft) by G-Corp despite being an

enclosed mall has incorporated design elements inherent to a

Strip mall with retail stores facing the street. This mall has been

designed as a combination of open-air / high-street format and

an enclosed mall like format.

Proposed shopping mall by Karle Properties - Karle Town

Center (1.4 million sqft) is expected to be a community mall

designed as a Town Center having a combination of open-air /

high-street and an enclosed mall like format.

Emerging Retail Format: Organized Wholesale Retail

Before economic liberalization, wholesale markets in the city were restricted to the “petta” regions. Areas of Chikpet, Ballepet, Akkipet , Cubbonpet - continued to cater to the wholesale retail demands of the city ranging from grocery to stationery items to textiles.

In 1997, with Government of India (GoI) permitting 100% FDI in Cash and Carry formats, the city witnessed entry of major cash and carry players in the organized retail sector and prominent retailers like Metro Cash and Carry and Decathlon set-up their stores in the city.

Going forward, the wholesale market in Bangalore is expected to witness entry of many international players such as Best Price by Bharti Walmart, Carrefour and expansion of existing players including Metro Cash and Carry and Decathlon. Salarpuria Sattva in collaboration with Future Group is set to launch a World Market (1.0 million sqft) on Old Madras Road in PBD.

24

Most of the malls in the city are enclosed mall with department

stores, super-market or a hyper-market chain, food-court and

fine dining options as well as entertainment retailers.


Convenience Mall

Neighbourhood Mall

Community Mall

Regional Mall

20,000 – 30,000

Type of Mall Size Catchment Area Key Anchor Tenant

30,000 – 100,000

100,000 – 400,000

300,000 – 900,000

1 KM

1 - 2 KM

1.5 - 5 KM

5 - 10 KM

NA

Super-market ora hyper-market chain

Department Store /Hyper-market

1 or 2 full-linedepartment stores

SHOPPING MALL: PRODUCT CATEGORY DISTRIBUTION

25

In community malls anchor tenants usually occupy 40 – 50% of

the total mall space and for a regional mall it ranges between

50% and 55%.

Malls in the city are largely anchored around an Apparel and Footwear brand and / or a Hyper-market chain. Entertainment and Food & Beverage (F&B) retailers are also among the predominant anchors in shopping malls.

Department Stores or Apparel and Footwear brands are one of

the prominent anchors in shopping malls. Other significant

anchor tenants include multiplexes closely followed by hyper-

market chains like Star Bazaar, Hypercity, Big Bazaar, Spar

and restaurants. Restaurants / food-courts also attract sizeable

consumers to malls.

Vanilla stores across the malls in the city are dominated by

Apparel and Footwear retailers followed by Food and

Beverage (F&B) tenants. Other categories like electronic

goods, home furnishings books & stationery items are also

among the noticeable retailers occupying vanilla stores.

Luxury Malls

As per AT Kearney, the Indian luxury market is growing at 20% a year and is expected to grow to USD 14.7 billion by 2015 from USD 5.8 billion today. In addition, 100% FDI in single brand retail is expected to facilitate entry of international retailers in the city.

Owing to a healthy economic growth, the city has witnessed an increase in population of High-Net Worth Individuals (HNI) and Super rich. The city accounts for the third largest population of HNIs after Mumbai and Delhi.

Luxury retail in Bangalore is confined to high-street of Lavelle Road and five-star hotels. UB City at Lavelle Road and Leela Galleria at Leela Palace are amongst the key operational luxury malls in the city. UB City has become a preferred destination for luxury brands mainly due to availability of necessary infrastructure and brand visibility that it offers. Key luxury brands operational in the city include Burberry, Jimmy Choo, Louis Vuitton, Canali, BottegaVeneta, Tag Heuer, Paul Smith and Tumi.

Upcoming malls in this category is Embassy Group’s shopping mall at Residency Road.

Prevailing luxury mall rentals range between INR 350 and 420 per sqft per month for UB City and between INR 150 and 250 per sqft per month for Leela Galleria.

Apparels & Footwear Home & Life Style

Multiplex

Food & Beverages

Figure: Product Category Distribution: Anchor Stores

40%

5%4%

16%

16%

19%

Fashion & Apparel

OthersElectronic & Whitegoods


Figure: Product Category Distribution: Vanilla Stores

Others

55%

5%4%

7%

9%

20%

Hyper market / Super market

Personal Care / Watches / Jewellery

26

Till recent past, entertainment in the retail malls was confined to

Multiplexes; however, today it is growing to a status of an

important anchor. Brigade Orion at Rajajinagar and Park

Square in Whitefield have roped in various gaming retailers-

the likes of Blu O, Amoeba and Time Zone apart from eminent

multiplexes.


SHOPPING MALL: RENTALS

27

Shopping mall rentals mainly depend on the location of the mall

and the size and location of the store in the mall.

19Annual ATD on Useable Carpet Area (UCA) across SBD malls

range from INR 8,000 to 16,000 higher than the ATD for CBD

malls, which ranges from INR 5,000 to 9,000 . Higher ATD in

SBD is attributed to growing catchment area and availability of

better mall infrastructure as against CBD. Comparable rentals

and higher ATD offer an advantage to shopping malls in SBD

locations when compared to CBD locations.

Shopping malls in SBD offer an advantage as compared to malls in CBD owing to high Average Trading Density (ATD), substantial footfalls, better mall infrastructure and comparable rentals.

Table: Prevailing Mall Rentals

Anchor Tenants 55 - 90

Multiplex

21Vanilla Tenants

Ground Floor

45 - 75 35 - 50

Of the SBD locations, Forum Mall at Koramangala charges a

higher rent of INR 420 - 450 per sqft mainly due to higher foot

falls and higher ATD. The Forum not only attracts the highest

foot falls but also accounts for the highest ATD of nearly INR 2016,000 per year per UCA .

Total occupancy cost for a retail outlet includes both rent as well 18as the Common Area Maintenance (CAM) charges . CAM

charges across malls in Bangalore range between INR 20 - 26

per sqft per month on Super built-up area. Amongst the PBD locations, mall rentals in Bannerghatta Road

increased by 8 - 10%, but were insignificant in Whitefield and

Mysore Road.

Shopping mall rentals across CBD locations of Bangalore to

witness nominal growth in the short term mostly due to

increased mall space supply and better infrastructure in SBD

locations.

Rentals across SBD locations are expected to sustain this

growth trend within the next three years, owing to minimal

prevailing vacancy rates and moderate pre-commitments.

High impending mall space supply in PBD locations likely to

contain the rental values at current levels for the next 1 year.

18Please refer annexure for the scope of work covered under Common Area Maintenance19Source: Vestian Research20Source: Vestian Research21Rental Values indicated are on carpet area for a 1,000 sqft vanilla store with an efficiency of 65%

Rentals(INR/sqft/month) CBD SBD PBD

First Floor

Other Floors

50 - 70 45 - 60 40 - 50

185 - 400 220 - 450 120 - 200

150 - 350 180 - 325 80 - 175

120 - 300 150 - 275 65 - 150

Table: Average Trading Density (INR/year/UCA)

CBD 7,800

SBD

PBD

Based on Micro-market

9,800

6,300

Post 2009, shopping mall rentals across CBD witnessed no

major change due to increased mall space supply in the SBD

locations. Malls rentals in SBD locations witnessed marginal

appreciation in rental values in the range of 10 - 12% during

2009 - 12.


OUTLOOK

29

By 2016, Bangalore is expected to witness an addition of nearly

5.67 million sqft; PBD locations account for nearly 70% of this

upcoming supply.

The most attractive micro market for development of a shopping

mall in short term is ORR - Sarjapur due to the lack of existing and

under-construction mall space. Meanwhile Bangalore North and

Old Madras Road have potential for development of malls in

medium to long term.

Owing to significant existing and impending mall space, Whitefield

does not have potential for development of new malls in short to

medium term.

Shift in the developers’ interest towards Bangalore North has made

way for many planned retail projects in this micro-market.

Consequently, this is a potential choice for mall activity in the

coming 3 - 5 years.

As against the last decade wherein development of malls was still

in a nascent stage, the city is currently witnessing a differentiation

phase with the development of newer formats of malls and retail

infrastructure. Previously malls in the city were primarily

community malls. However, entry of national developers and

availability of larger land parcels have led to the development of

regional malls in the city.

Malls in the city are largely anchored around an Apparel and

Footwear brand, F&B, entertainment and / or a hyper-market

chain. Till the recent past, entertainment in the retail malls was

confined to multiplexes however; going forward other forms of

entertainment are going to be an important part of the anchor.

With significant luxury brands planning to foray in to the city’s

market, demand for luxury malls is likely to remain strong.

Despite increasing mall space in the city, key high-street locations

of the city shall continue to attract retailers mainly due to better

brand visibility, optimum catchment area reach and convenience of

access.

Retail activity in Old Madras Road is expected to gain momentum

in medium to long term, mainly due to increase in residential

supply, improved connectivity and economic development towards

Hoskote Industrial Area.

In light of 51% FDI allowance for multi—brand retail by

Government of Karnataka - the demand for retail space in the city is

expected to strengthen in the coming years. Prevailing low

vacancy rates, high footfalls and strong economic outlook are likely

to positively impact the rental values across both shopping malls

and high street locations.

VESTIAN INSIGHTS


A new shopping mall can -

Attract customers from the existing business within or beyond the trade area because existing retail developments do not meet

market expectations

Provide a more convenient location to serve the market or establish a leading position in an emergent area by anticipating

competition

Anticipate increase in demand due to increase in population / households to capture the benefits over a long term

Thus each new shopping mall development based on its location

must be justified by careful study of the existing retail

developments, current demographics and anticipated growth of

trade area.

PRELIMINARY CHECKLIST FOR RETAILERS:

A new retailer when considering a city entry needs to assess -

Target trade areas by way of Consumer Demographics

Availability of supply in relevant high streets or shopping malls

Performance of similar retail categories in the trade area / city

Minimum number of stores required to gain a foothold and spread in the target market

Optimum store size for each micro market

PRELIMINARY CHECKLIST FOR DEVELOPERS:

When planning a new shopping mall, developer needs to evaluate -

DEVELOPMENT POSITIONINGEvaluate mall positioning based on location and demographics of the trade area

ACTIVITY MIXAnalyze the activity mix (for instance shopping + entertainment + leisure + dining) for the proposed

development.

TENANCY MIXEvaluate the trade mix and the tenancy mix based on the identified activity mix.

Prepare concept drawings: Based on the type of tenants recognized for the subject development, developer can initiate

the process of preparation of concept drawings for the shopping

mall taking in to consideration the requirements of the identified

tenants.

SPATIAL CLASSIFICATION of the city: To understand the characteristics of the retail spaces across Bangalore, the city has been sub-divided

spatially in to three major zones:

TERMS OF REFERENCE

31

Micro-markets

Secondary Business District (SBD)

North East

South East

North West

Peripheral Business District (PBD)

South West

Areas covered within the micro-markets

Central Business District (CBD)M.G. Road, Brigade Road, Magrath Road, Richmond Road, Lavelle Road, Cunningham Road,Langford Town, Brunton Road and Residency Road

SBD locations based on the geographic boundaries have been further categorized in to fourquadrants:

Indirangar, CMH Road, Old Madras Road (till K.R.Puram Bridge), Banaswadi, Bellary Road (till ORR)

Koramangala, few locations of Bannerghatta Road and Hosur Road (till Silk Board Junction)

Kanakpura Road (till ORR), Jayanagar, JP Nagar, Vijaynagar and few locations of Rajajinagar

Sadashiv Nagar, New BEL Road, Sanjay Nagar, Malleswaram and few locations of Rajajinagar andYeshwanthpur

Peripheral locations of Whitefield, ORR – Sarjapur, Electronics City and Hosur Road, Bannerghatta Road, Kanakpura Road, Mysore Road, Old Madras Road, Tumkur Road and Bangalore North

TERMS OF REFERENCE

32

Definitions Areas covered within the micro-markets

High-Street A high-street refers to the retail street in a city with street lined retail stores.

Shopping MallsA shopping mall is a group of retail establishments that is planned, developed, owned and managedas a single property with on-site and basement parking

Tenant Category in Shopping Malls

Vanilla Store

Anchor TenantThe major chain/s or department store/s in a shopping mall positioned to produce traffic for smallerstores in the facility

Smaller format retail stores in a mall are call

Unit of Measurement

Gross Leaseable Area (GLA)

Retail spaces are measured on the following three bases:

GLA is the total floor are designed for a tenant’s occupancy and exclusive use, including basements,

mezzanines or upper floors measured from the centerline of joint partitions and from outside wall

faces. It is generally expressed in square feet (sqft) and rents for shopping malls is payable on the

GLA.

Useable carpet area or the carpet area is the total area of the premises measured from internal wallsUseable Carpet Area (UCA)

Common Area include usable consumer horizontal and vertical circulation areas. In some cases a portionof landscaped / outdoor piazza would also constitute to common areas.

Common Area

Loading Factor is the ratio of Loss Factor and UCA. Loading factor across shopping malls inBangalore for,

Useable Carpet Area (UCA)

Anchor tenants varies between 20% and 30%

Vanilla stores vary between 50% and 60%.

High-street locations ranges between 15% and 25%.


TERMS OF REFERENCE

33

Tenants follow the following rental models:

Rent Fixed rental with annual escalation

Revenue Sharing Model which involves a fixed component (Minimum Guarantee) and a

variable component which is based on a percentage earned on the retailer’s sale.

Operating Costs

Maintenance ChargesMaintenance of the common areas namely upkeep of the corridors, Annual Maintenance Contracts(AMC) for all the equipment provided by the developer is under the purview of the developer or thelandlord; however expenses towards the same are borne by the tenant and is payable on the GLA.

UtilitiesFor both high-street and malls, the tenant is accountable for the payment of electricity, water andtelecommunications within their premises which is charged at actuals.

Insurance Insurance for the building / mall is under the purview of the developer or the landlord.

Car ParkingAs per market practice, shopping malls across Bangalore offer minimum 1 car park for every 750sqft leased; charges for which are included in the rent. Any additional car parks required by thetenant over and above this attracts an additional charge.

Stamp Duty

Stamp Duty for the premises shall be borne by the tenant. Based on the tenure of the lease StampDuty is applicable as follows:

0 – 10 years :

10 – 20 years :

1% on annualized Average rentals of total lease tenure and Security Deposit

2% on annualized Average rentals of total lease tenure and Security Deposit

Registration Charges

Registration charge for the premises shall also be borne by the tenant. Based on the tenure of thelease registration charges are applicable as follows:

0 – 10 years :

10 – 20 years :

0.5% on annualized Average rentals of total lease tenure and security deposit

0.5% on annualized Average rentals of total lease tenure and security deposit

Lease Terms

Security Deposit

Lease Period

Typically lease period is as follows

As a market practice, the landlord / developer charges an equivalent of 6 – 8 months rent as interestfree security deposit.

For both high-street and malls, maintenance charges are computed considering the hours ofoperations to be in the range of 10 – 12 hours

As per the current practice, rental values for malls or high-streets are escalated by 5% every yearor by 15% every three yearsRent Escalation

Hours of Operation

15 - 21 years for Anchor stores

6 - 9 years for Vanilla stores

GLOSSARY

IT Information Technology

ITeS Information Technology enabled Services

INR Indian Rupee

BCC Bangalore City Corporation

CITB City Improvement Trust Board

BDA Bangalore Development Authority

FDI Foreign Direct Investment

BIAL Bangalore International Airport Limited

GLA Gross Leasable Area

ORR Outer Ring Road

MBO Multi-Brand Outlet

GDP Gross Domestic Product

HNI High Net Worth Individual

UCA Usable Carpet Area

ATD Average Trading Density

Acknowledgment

The Vestian Strategic Advisory team would like to take this opportunity to extend

our gratitude towards all those who have helped us in our endeavor to produce

this report. We would like to especially thank the developers in Bangalore who

have extended their valuable support and market information which has helped

us in ensuring authenticity of the report. A special mention for our Retail and

Corporate Communications Teams, as well as Chandra Mohan Reddy and Manoj

Joseph for their continued support & cooperation.


Michael serves as Chairman and is responsible for strategic

oversight. He is a recognized leader in the field of workplace

services. He has established and led the growth of a large

occupier focused services corporation.

In 2006, he received the Ernst and Young Entrepreneur of the

Year Award. He is also an active member of the YPO (Young

Presidents' Organization) and WPO (World Presidents'

Organization).

Michael SilverChairman, Vestian

Shrinivas Rao, MRICSCEO, Vestian

Shrinivas serves as Chief Executive Officer for Asia Pacific.

With over 20 years of experience in working with global clients

throughout India, he is well-versed in delivering solutions that

work in India's very challenging workplace services markets.

Amongst the pioneers of professional workplace consulting

services in India, he successfully established and led

operations of three multinational corporations in India. He is

widely recognized as a change leader and known for his keen

insights into workplace services trends and innovative

structuring services.

GLOBAL MANAGEMENT

35

BANGALORE: RETAIL REPORT

As a part of Strategic Advisory Group, Dhara contributes to

property market reports, research papers as well as client

assignments. She has over 5 years of experience and has

worked on consultancy assignments across commercial,

residential, hospitality, retail and industrial sector. She

holds an engineering degree with M. Tech in planning from

CEPT University, Ahmedabad.

Dhara Dalal

Sr. Manager, Strategic Advisory Group

dhara vestianglobal.com +91 80 40620100

Shailendra contributes to property market reports,

research papers as well as client assignments.

Shailendra has over 5 years of experience in real estate

and has worked on consultancy assignments across

varied sectors namely commercial, residential,

hospitality, retail and industrial. He is an engineer and

holds an MBA degree from Ohio University, USA.

Shailendra H Chandrasekar

Sr. Manager, Strategic Advisory Group

shailendra vestianglobal.com +91 80 40620100

Gorakh serves as Vice President and heads the Strategic

Advisory Group. He guides the team and is responsible for

research output as well as client assignments. With over

10 years of work experience in consulting and advisory

domain, he has executed and delivered assignments

across asset classes. Gorakh pursued his master’s degree

from Indian Institute of Technology, Delhi and holds a

bachelor’s degree in Architecture.

Gorakh Jhunjhunwala, MRICS

VP, Strategic Advisory Group

gorakh vestianglobal.com, +91 80 40620100

@

@

@

36

Ashwin, with 7 years of experience in the industry heads

the retail division for South India. He has been

instrumental in successfully driving transactions for

Departmental Stores, Hypermarkets and EBO clients. He

manages some of the key Shopping mall projects

mandated to Vestian. Ashwin’s varied experience and

proficient skill set makes him a client favourite.

Ashwin Kunder

Director, Retail (South)ashwin vestianglobal.com +91 80 40620100

Raj brings over 8 years of relevant experience in the retail

and hospitality sectors. Based in Mumbai, Raj is

responsible for assisting retailers in their expansion across

shopping malls and high-street for the Western region.

Rajkiran Naik

Director, Retail (West)raj vestianglobal.com +91 022 42153060

Vivek brings more than 12 years of retail services

experience. He has been known to deliver strategic

solutions to both retailers and developers across India in

his previous roles in the industry. He is a member of the

Institution of Engineers (MIE) and also a Fellow of the

Institution of Valuers (FIV).

Vivek Nair

Executive Vice Presidentvivek vestianglobal.com, +91 80 40620100

@

@

@

Sr. Manager, Retail (North)

Ravinder has over 4 years of experience in retail real

estate and is responsible for providing solutions across

key cities in North India. Prior to Vestian, he has worked

with Realistic Realtors.

Ravinder Choudhary

ravinder vestianglobal.com +91 0124 4208423

With over 7 years of experience, Chandini has an in depth

understanding of the retail industry across India and brings

to the table her expertise in retail operations. She has inked

lucrative business propositions for over 150 clients; and is

extremely popular with retailers for her proficient retail

strategies. Her previous assignments include Celio,

Colliers International.

Chandini J Bathija

Director, Business Developmentchandini vestianglobal.com, +91 80 40620100

@

@


AUTHORSRETAIL TEAM

ABOUT US

Strategic Advisory

Vestian Global Workplace Services’ Strategic Advisory Group is the Research arm of Vestian. They align business

strategies of corporate clients with their real estate portfolio strategy. Property market intelligence, economic, urban

& space planning principles and analytical methods all come together to provide strategic insights to real estate

occupiers. This approach guarantees recommendations that are thorough and meets not only the needs of today, but

of the future as well. We primarily cater to Developers, Builders, Investors and Occupiers.

Our studies span a spectrum of sectors:Commercial, Residential, Industrial, Institutional, Hospitality.

Retail Business Solutions

Vestian Retail Business Solutions is the full-service retail arm of Vestian Global. We work with each client to

understand their objectives and associated risks, establish achievable goals, develop and implement effective

solutions. Vestian Retail Business Solutions provide end to end services which include Retailer Expansion Strategy,

Real Estate Services, Occupier Representation, Retail Concept Development & Consulting, Retail Project

Management.

Project Services

The Vestian Project Services team is a one-stop solution for clients opting for Project Management solutions. We are

focused on delivering functional facilities that meet the clients’ space requirements. We provides supervisory & co-

ordination services to the client. We deliver consistent, reliable and viable solutions for local and international

markets. Our delivery process involves Preparation of design documents, co-ordination with architects & consultants

for design, finalization of vendors, supervision of the project, Project closure.

Facilities Management Services

Vestian’s Facility Management Services team helps clients focus on their core business activities,. We act on

behalf of the client to preserve the value of the property, while generating income. We, effectively oversee property

performance and maintenance following international best practices, using high end technology and precision

processes. We manage the administration of residential, commercial, retail and/or industrial real estate.

Transaction Advisory

Vestian’s competent Transaction team provides an array of services focused on optimizing workplace solutions that

enhance the client’s workplace services portfolio. We handle varied workplace related transactions such as

purchase, lease, disposal, lease management, lease renegotiations and restructuring. We provide solutions that are

aligned to the business objectives of our clients.

Vestian Global Workplace Services, a contemporary workplace services firm, specializes in providing occupier-

focused solutions for commercial, residential, industrial, retail and hospitality sectors. Our service portfolio

includes Strategic Advisory, Retail Business Solutions, Transaction Advisory, Integrated Service Delivery, Project

Services and Facilities Management Services.

We measure key deliverables of our business and align it to the clients’ strategic business goals. Our commitment

to achieve excellence and consistency in our service delivery models has helped us attain high standards of

quality and raised the bar for the industry.

Our experienced team has the required expertise and exposure in different sectors. Combining global best

practices and local knowledge, the team provides an integrated solution for all real estate requirements. Moreover,

the belief in our corporate philosophy - Delivering Measurable Results - helps us in providing solutions in keeping

with global delivery standard.

37

CONTACTS

India Management

Shrinivas Rao MRICSCEO - Asia [email protected]+91 80 40620102

Strategic Advisory Group

Gorakh Jhunjhunwala MRICSVice [email protected]+91 80 40620100

Retail Business Solutions

Vivek NairExecutive Vice [email protected]+91 80 40620100

Transaction Advisory

Joseph ThilakAssistant Vice [email protected]+91 044 39159351

Project Services

Sanjay PurbeyVice [email protected]+91 80 40620100

Facilities Management Services

Col. Ramesh KumarVice [email protected]+91 80 40620100

Operations

Capt. Kunal AsirvadamExecutive Vice [email protected]+91 80 40620100

Offices

38

Bangalore (Corporate Office)First Floor, West Wing,DuParc Trinty,#17, MG Road,Bangalore 560 001T: +91 80 4062 0100

MumbaiAcme PlazaUnit No.501, 5th floorAndheri Kurla RoadAndheri (East)Mumbai - 400059T: 022 42153060

ChennaiSuite No # 403MLS Business CenterKuppu Arcade4, Venkatanarayana RoadT. Nagar, Chennai- 600017T: +91 44 39159351/ 66659351

Hyderabad2nd Floor, N.N.R Arcade,Plot 13, Road No. 10, Banjara HillsHyderabad - 500034Telephone: +91 40 33782100

GurgaonAmSoft Systems Pvt. Ltd.Unitech Trade CentreSector-43, Sushant Lok-1(Near Huda City Metro Station)Gurgaon, Haryana – 122002T: 0124 4208423

INDIA

Chicago (Head Office)300 N. LaSalle StreetSuite 1850Chicago, IL 60654Telephone: +1 312 920 0290Telephone: +86 21 3255 6366

USA

CHINA (Regional Office)Unit 1207, No.546Changning Road,Changning District,Shanghai 200 042Telephone: +86 21 3255 6366

CHINA


Bangalore: Retail Real Estate Market ReportJayanagar 11th Main Road, New BEL Road and Marathahalli...

Documents

Transcript of Bangalore: Retail Real Estate Market ReportJayanagar 11th Main Road, New BEL Road and Marathahalli...