A mall and multiplex wave is set to sweep across Chennai, with over 20 malls planned in the next three years.
The city, where India’s first mall, Spencer Plaza, was set up in 1975, is expected to absorb over Rs 3,000 crore in the coming years.
Realty majors such as Prestige Group, Shriram Properties and DLF are in the forefront of mall development in the city and beyond.
Bangalore-based Prestige is drawing up plans for a second Forum mall in the city’s artery, Mount Road, while completing the first Rs 350-crore Forum mall at Vadapalani in Chennai, in collaboration with Vijaya Group.
The Vadapalani mall, spread over 17 lakh square feet, will feature a seven-screen multiplex, over 100 shops, two departmental stores, a 1,40,000 square feet hypermarket. The mall is expected to become operational in the first quarter of 2010.
“Vadapalani is a large residential catchment area, which is well connected by two important roads – Arcot Road and Nehru Road. Footfalls in this important location in the heart of the city will be higher compared to other areas,†said Muhammed Ali, DGM (mall leasing), Prestige Group.
While over the last year and a half, the attention of developers was focused on the residential sector, the feverish activity being raked up on the commercial and retail fronts is seen as a logical extension.
These have increased the demand for mall space even in areas such as Aminjikarai, Besant Nagar, Velachery, Mogappair, Sirusseri, Semmenchery and Perambur.
While Allied Housing & Development is planning a seven lakh square feet mall at Sirusseri on the Old Mahabalipuram Road, Chennai’s IT corridor, Ozone Group’s 14 lakh square feet Ozone Mall is coming up at its integrated township Metro Zone in Anna Nagar.
Company showrooms are expected to take up at least 90 per cent of the floor area in these malls, where the standard rentals are Rs 12-15 per square feet. This works out cheaper for companies, which would otherwise have to lease dedicated spaces at Rs 50-60 per square feet in retail hotbeds of the city like T-Nagar, Nungambakkam and Anna Nagar.
“While office rentals in the city are still on the higher side, they may not be attracted to rent spaces in malls. Malls are dedicated retail spaces, but it remains to be seen if the demand exists in Chennai,†cautioned Abdur Ravoof, a partner with Property Care.
But the action is on. River Side, a jumbo mall at Karapakkam near Chennai, when completed in the fourth quarter of 2008, would take up 11 lakh square feet of built-up space, including a mammoth parking area, according to industry sources. The mall is being set up at a cost of Rs 500 crore, with a Rs 100-crore loan from HUDCO. Marg Constructions, the project developer who has invested Rs 50 crore, is on the lookout for strategic investors to raise Rs 100 crore, and hopes to raise the rest through a mixture of debt and equity.
According to G R K Reddy, managing director, Marg Constructions, 30 per cent of the space at the new mall has already been booked. “The demand for organised retail in Chennai has been growing by leaps and bounds. Karapakkam is a good strategic location for our retail operations,†Reddy said.
Industry sources said the Fame Adlabs theatre chain, owned by Mumbai-based Shringar Cinemas, would start its south India operations with a four-screen multiplex at River Side.
Satyam, Inox and PVR, which have been operating theatre chains in Chennai, are likely to increase their footprint through these malls, along with new entrants such as Cinemax and Fame. While PVR is planning screens at the four lakh square feet Ampa Mall, Satyam is known to have leased space at the upcoming eight lakh square feet Express Mall, coming up on land formerly owned by Indian Express Group (Madurai). Westside is planning to set up flagship stores at both these malls once they become operational in mid-2008.
