Cover Story Select CITYWALK A new-age
shopping centre for the New India
While retailing in India is witnessing a boom like never before, an intriguing and exciting chapter in the retail landscape of the country is being written, very quietly (almost secretively!) by a mixed-use development in South Delhi, called Select CITYWALK. RETAIL ASIA’s Jayanthi Iyengar brings you the scoop on what is being seen as India’s most sought-after, upcoming shopping centre.
The key reason Select CITYWALK, a large, retail and mixed-use development in South Delhi, India, has generated such a tremendous interest in the international as well as the Indian retail community, without any advertising or brochures, is its unique concept and a radically fresh development approach.
The project, slated to open next year, has already changed the rules of the shopping-centre development business in India, leaving behind many an experienced developer, and might just become a trendsetter and benchmark of sorts for all of Asia.
The first development in Asia to adopt a retailer-friendly, turnover-based model with occupiers, it stands out with many other firsts in the Indian context to its credit, such as invitation-based leasing. An innovative concept, strong occupier demand, sound planning fundamentals, and a compelling trade and tenant mix have already led to an estimated occupancy of over 75%-80%.
Select CITYWALK is set in the heart of Indias most affluent residential catchment and most popular shopping district, South Delhi. This prime residential hub of South Delhi offers a catchment population of over 1.6 million SEC (socio-economic classification) A&B consumers. An overwhelming majority of the capitals high-networth individuals and families live and shop in South Delhi.
Select CITYWALK has one of the countrys largest upcoming shopping centres, with a carefully planned and religiously implemented tenant mix that reflects the lifestyle and aspirations of the upwardly mobile new-age urban Indian consumer as well as the international traveller. What, then, is the scheme all about and why is it a closely guarded secret when other mall developers in the country are scurrying for occupiers?
The high-end 1.3 million-sqf mixeduse development comprises a retail podium, cinemas, an office building and serviced apartments, with an estimated 2,000-car parking facility and world-class infrastructure. The centrepiece of a 54- acre, well-planned urban business district, District Centre Saket, the scheme is an interesting hybrid of a European High Street and an enclosed shopping mall, with a 240m facade overlooking a 100,000sqf outdoor plaza and a 4-acre landscaped park.
Delhi has traditionally been the heartbeat of India by virtue of being the countrys political capital, economic powerhouse, fashion capital and shopping hub. It is the countrys largest market in terms of size and economic profile, with a market size of over US$20 billion in terms of expenditure. Affluence, in Delhi, however, is mainly concentrated in Central and South Delhi.
In the absence of proper shopping centres, shopping in South Delhi takes place in busy, congested roadside retail markets, which are now crumbling due to inadequate infrastructure, lack of parking, legal/title ambiguities, electricity shortages, escalating costs and overall consumer-occupier inconvenience.
Of the 300-odd shopping centres coming up across India, it is not surprising that Delhi, together with its suburbs of Gurgaon and Noida, has the highest proliferation of upcoming shopping-centre projects, indicative of the strong occupier demand for quality space. However, most of these are being developed in Delhis far-flung suburbs and not many are located where the rich of Delhi actually live, South Delhi. This was due to lack of availability of quality land parcels, coupled with intense development controls and high land values.
In tune with the market trends, the Delhi Development Authority (DDA), in November 2003, stepped in and auctioned a 6-acre land parcel, where Select CITYWALK will stand. It will be the first international-format centre in such a premium location, and is expected to provide much needed respite to the shopping needs of what is probably the countrys wealthiest catchment area.
It is because of these factors that Select CITYWALK is being watched eagerly by the retail industry in India and internationally, and is being seen as the most promising of shopping centres being developed in India.
The largest, but one of the last, of South Delhis four such shopping malls to launch, Select CITYWALK has already won over occupiers like none other, by being very different in its development approach, as compared to other malls in Delhi as well as nationally. While Indian developers have adopted the strata-title sale model and pre-sell retail space, often to small-time investors, Select CITYWALK has broken away from this trend by adopting the lease/licence model.
Under the sale model, a developer acquires land, pre-sells individual shops to investors and/or anyone interested to own a shop, collects moneys, and then constructs the mall, regardless of occupancy concerns. Little control is possible on the trade and tenant mix of the property while the developers prerogative gets limited to commoditytype selling of the commercial real estate.
Once the mall space has been booked/sold, and the developers have made their killing, they move on to other properties. The model provides a safe haven for parking unaccounted cash, which invariably forms part of the transaction. Shopping-centre fundamentals or painstaking planning, therefore, becomes dispensable, as the buyers are not very aware of the same.
Under this model, while there is some semblance of managing the property while the commercial space is still to be sold, property management typically collapses when the developers have liquidated the asset to hundreds of individuals. It is because of this reason that many shopping centres have gone to seed within years of being put up.
Select CITYWALK stands out not only in this sold-mall culture, but also among leased-model malls, being one of the first shopping centres in Asia to adopt the turnover-based revenue model, which is becoming increasingly popular worldwide.
At the very onset, it is different to the extent that it is not merely the coming together of developers and retailers who bung together a project quickly. Instead, even at the implementation and execution stage, the project is a harmonious amalgam of developers, retailers, hospitality industry exponents, foreign and domestic architects, designers and decorators, who come together to showcase the best there is to the East and West in retail property design and execution.
The development is promoted by Select Infrastructure Pvt Ltd, a joint venture between the Select Group, pioneers in the travel and tourism industries, and a niche Delhi developer, Yograj Arora. The Select Group is chaired by Inder Sharma, who is a recipient of the Padmashree Award for promoting tourism in India.
Given the fact that the group was attempting such a high-profile project that very few in the country had much credible experience, the board of directors, in March last year, roped in consultants from across the world to help configure the project. The company brought in eminent shopping-centre expert Pranay Sinha, who was then country head (Retail & Leisure Advisory) of global real estate consulting firm Jones Lang LaSalle (JLL), to head Select Infrastructure as president and CEO.
Sinha, an architect by profession, has lived in and worked across Asia, in the field of shopping-centre development for over a decade, and is one of the few shopping-centre professionals in the country with a deep understanding of international trends, local markets, occupier sentiments and development economics. He was brought to India from Singapore by JLL five years ago to work with the retail sector in India.
Select CITYWALK is being developed as an upscale shopping centre, with a blend of successful international and local retail, similar in positioning terms to Pacific Place in Hong Kong and KLCC in Kuala Lumpur. It is envisaged to be a highquality urban shopping environment for the entire city but primarily focused on the affluent consumer.
The objective of the scheme, a modern-day urban town centre, is to become the first choice for shopping in the capital, and to become the citys pride, says managing director Arjun Sharma. Arjun is the former joint managing director of SITA World Travels and currently a director of Deutsche Equities and chairman of Le Passage to India, the second largest inbound tourism company in India.
The team seems to have cracked the code, combining the best of high-street shopping with the comforts of a mall. Select CITYWALK has a unique highstreet character, with an imposing, 787ftlong colonnaded facade overlooking a 100,000sqf outdoor plaza, but functions with all the comforts of a shopping mall, complete with large, well-lit car-parks, sophisticated building-management systems and high security.
Select CITYWALKs architecture, design detailing, infrastructure, amenities and, most importantly, its tenant mix, are all targeted at meeting these objectives.
Very discreet in its marketing and leasing, the centre has primarily been leased by invitation-only, based on a predetermined trade and tenant mix. The promoters have consciously been silent about the project, and have avoided media campaigns and publicity to differentiate the scheme and establish a distinct positioning for the centre.
It is exciting that almost every niche and high-profile Indian retailer and leading international brand present in the country, or looking to enter the market is either already a tenant at Select CITYWALK or in active discussions with the group.
The owners have successfully put together a tenant mix with a unique ensemble of retailers to cater to the shopping requirements of the catchment. The project has been rated highly by both international brands like Guess, Next, Esprit, Aftershock and Benetton, who have taken large footprints, and niche Indian retailers like Good Earth, Verandah, Laffaire, Art D Inox and Crossword Book store, among many others of similar genre.
Says Sinha: As a group with hospitality and tourism background, we strongly believe that creating any successful retail destination is an intense art and a science strengthened with a deep understanding of the culture and context. It is a complex model arrived at by factoring various concerns, which include external factors, along with core retail parameters.
At Select CITYWALK, our efforts have been to make a truly memorable retail destination with a world-class appeal. Presence of good management, planned tenant mix, a clear positioning, sufficient parking and an exciting design and architecture form the key ingredients of our development model.
A unique approach, probably for the first time in the country, a fully leased project with a turnover-based rental model, implies that at any given month the tenant pays either a monthly minimum guarantee or a percentage of sales, whichever may be higher. This model used in Europe and the US has proved to be extremely successful as it ensures a continued interest by the centre management to drive up the retailers sales.
Select CITYWALK is a hybrid concept, a well-integrated indoor shopping environment with an outdoor experience. The most special feature of the development is the well-designed open plaza with pedestrian walkways, extending into a vast four acres of green area. The open plaza, housing an openair theatre, water features and other attractions for the urban shopper, is proposed to be developed as a vibrant activity zone.
An immensely important business enabler in such an upscale development in a prime urban/downtown location, is its car-parking capacity. With an upscale positioning, we can only have as many shoppers in the scheme as the number of car parks we can provide for. says Sinha.
Select CITYWALKs 6,75,000sqf of basement area, spread across three levels, is being designed to accommodate over 16,000 cars in a day.
The project is being developed with integrated high-quality infrastructure for modern-day retail with professional shopping-centre management. It has high-performance central air-conditioning, 100% power backup, high-tech fire-fighting and security systems, intelligent building-management systems, high-speed data cabling, and other features to benefit all its users.
The trade-category zoning and tenant mix of the project has been established after extensive market research and understanding of the needs and requirements of the primary target audience. Our audience is extremely demanding, very well read and travelled, and spends extensively on lifestyle, fashion, food, home and entertainment. We are looking at a very brand and quality-conscious consumer who expects the best in both Indian and international names, affirms Sinha.
Select CITYWALK has three designated zones: Traditional retail, fashion segment called High-Voltage, and a central zone where the two amalgamate called Celebration Zone. Across these zones, the groupings range from mens formal wear, ethnic and wedding wear, unisex casual to youth/ street/college fashion, foreign labels, style-trendsetters, music stores, home and accessories, kids and infants, etc.
The development has been supported and recommended by the leaders in the Indian retail industry. Over 60,000sqf of space has been leased by the K Raheja Corp group that owns the Shoppers Stop department store. The group is setting up a new concept of category killers spread across four different levels at Select CITYWALK.
The Pantaloon Retail Group is setting up its new high-end fashion store called Mint, based on the concept of fresh fashion that puts together a new offering to the consumer every month.
The key entertainment anchor is a six-screen multiplex, seating over 1,400 people, operated by the countrys pioneering group called PVR Cinemas.
Select CITYWALK promises a food court set in al fresco style, overlooking a terrace, to be carried out by a leading operator from Singapore, along with Indian partners who have over 30 years experience in the sector.
Effective centre management is critical to the sustainable success of any shopping centre, especially in a context such as India, where the concept of such centres is still evolving.
According to Sinha, it is good management that ensures that the centre keeps pace with the times, fights competition aggressively, attracts high volumes of meaningful traffic year after year, instills discipline in the development and looks after the physical environment well.
With a fully-leased model, Select CITYWALK is geared to address these concerns to ensure a well-regulated and disciplined environment and a strategically controlled tenant mix with the shopper in focus. As per the promoters, trained and experienced professionals will manage Select CITYWALK, and the policies and procedures are already being put into place after studying the best practices in centre management worldwide.
The legal structures at the centre are also in coherence with the overall development philosophy and intent. For example, contrary to the market norm of only nine-year leases, Select CITYWALK is offering standard 3+3-year leases. It is difficult to say what the retail market would be like within three years, says Sinha.
This is a very potent statement when viewed against the fact that Indias organised retail market is expected to grow at a rapid pace of over 30%.
The promoters of the project are developing Select CITYWALK on a fast-track construction mode. The project managers have scientifically planned the entire construction in a clockwork fashion to meet the timeline for completion by March 2006.
Overall, the US$100-million project is addressing the business of fun, seriously, where design has met the planning functionality, where branding, operations, tenant mix, circulation, store sizing and public amenities all seem to blend into one experience. One would wait excitedly to experience Select CITYWALK and see how the development approach manifests itself into creating a world-class shopping experience for a new-age India.