Saturday, October 14, 2006

Realizing their clout, malls raise rentals

The Economic Times reports that as malls are realizing their clout and that they don’t have to rent anchor spaces at throw-away rates just to get the big names in the mall, and so are now raising rents. While earlier a mall’s success depended on at least one big name as a tenant, it is not the case anymore. Abijit Das, head of Ansal Plaza Mall Management Company says that,
“Low rental offers by anchor stores have also forced developers to try their luck through revenue share agreements where they may earn more.”
Increasingly, malls are realizing the importance of creating a strong brand for themselves, and therefore are not depending on only big retailers to pull in customers to the mall anymore. Raman Mangalorkar, a principal at AT Kearney, adds,
“Earlier, the presence of retail chains was the key factor that determined footfalls in a mall. Not any more. Now malls are independently recognised and are marketing themselves aggressively.”
Contrasting to malls focus on big anchor tenants, now many developers now prefer a more varied mix of stores, including department stores and small format stores rather than only large retailers. Ajay Khanna, executive director of DLF Retail Developers says,
“New innovative mid-sized formats are becoming popular as they take less space and cater to everyone’s needs.”

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