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.
6BANGALORE: RETAIL REAL ESTATE REPORT
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%
8BANGALORE: RETAIL REAL ESTATE REPORT
Figure: High-street Stacking: Brigade Road
BRIGADE ROAD
Brigade Road
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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
Others Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
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%
10BANGALORE: RETAIL REAL ESTATE REPORT
Figure: High-street Stacking: Commercial Street
COMMERCIAL STREET
Commercial Street
V D
as
& S
ons
Pan A
merica
Asw
an L
ifest
yle
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quare
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r E
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Apparel & Footwear
Others Personal Care / Watches / JewelleryElectronic & White Goods
Food & Beverages Books / Stationery / Gifts
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.
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
Operational Since 1950s
7Rental Values (INR/sqft/month) Ground Floor
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
8Average Annual Rental Appreciation 9%
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
Others Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
7Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%8Average annual rental appreciation figures are considered for the period between 2009 - 20129In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
12BANGALORE: RETAIL REAL ESTATE REPORT
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
Others Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
UB City
Sunny’sLa Cristaal
Limelight
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.
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
Operational Since 2000s
10Rental Values (INR/sqft/month) Ground Floor
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
11Average Annual Rental Appreciation 6%
12Capital Values (INR/sqft) 17,500 – 23,000
Lavelle Road and Vittal Mallya Road
Automobiles
Figure: Product Category Distribution: Lavelle Road andVittal Mallya Road
33%3%
25%
18%
9%
9%
Apparel & Footwear
Others Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
3%
10Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%11Average annual rental appreciation figures are considered for the period between 2009 - 201212In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
14BANGALORE: RETAIL REAL ESTATE REPORT
Figure: High-street Stacking: Indiranagar 100 Feet Road
Indiranagar 100 Feet Road
Old
Airport
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INDIRANAGAR 100 FEET ROAD
Apparel & Footwear
Others
Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
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.
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
14Average Annual Rental Appreciation 5%
15Capital Values (INR/sqft) 15,000 – 19,500
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
Others Personal Care / Watches / Jewellery
Electronic & White Goods
Food & Beverages
Books / Stationery / Gifts
13Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%14Average annual rental appreciation figures are considered for the period between 2009 - 201215In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
16BANGALORE: RETAIL REAL ESTATE REPORT
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.
18BANGALORE: RETAIL REAL ESTATE REPORT
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: RETAIL REAL ESTATE REPORT
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.
BANGALORE: RETAIL REAL ESTATE REPORT
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
Food & Beverages Books / Stationery / Gifts
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.
BANGALORE: RETAIL REAL ESTATE REPORT
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.
28BANGALORE: RETAIL REAL ESTATE REPORT
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
30BANGALORE: RETAIL REAL ESTATE REPORT
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%.
BANGALORE: RETAIL REAL ESTATE REPORT
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.
34BANGALORE: RETAIL REAL ESTATE REPORT
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
@
@
BANGALORE: RETAIL REAL ESTATE REPORT
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 REPORT
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