Phoenix replaces mall plans with residential

Phoenix Mills Ltd, the Mumbai-based retail centre developer, is restructuring some of its mixed-use developments in south India.
Citing oversupply of commercial space in the southern region, Phoenix has decided to turn about 3 million square feet development originally planned for pure retail/office development into residential one with some or no retail component.

The projects being restructured include two developments in Bangalore and one in Chennai. The company’s first residential development is Phoenix Towers, which is in the vicinity of its High Street Phoenix development in Mumbai.

Shishir Shrivastava, executive director, Phoenix Mills, said the company had acquired these land parcels primarily for large retail-led mixed use developments.

“However, the market scenario has changed drastically from the time we acquired these sites. While the earlier plan was to develop office complex within our projects in Bangalore and Chennai, we now see that the offtake for such spaces will be fairly low going forward,” Shrivastava said.

The two Bangalore sites being restructured measure 1.8 million sq ft in Bangalore West and 6.5 lakh sq ft in Bangalore East.
As for the Chennai site, in addition to retail space in phase I, around 2.5 lakh sq ft will now be for residential development and another 3 lakh sq ft will follow suit.

While construction at Bangalore East and Chennai has commenced, the company is understood to have incorporated the residential elements in the architectural plans without much increase in the overall project cost.

As for the Bangalore West site, based on the changed market environment and increased competition in the vicinity, the management has deferred its plans of building a million- and-a-half square feet mall and will do a residential development
instead.

The residential developments of Phoenix will be in the ultra-premium category.

Pradumna Kanodia, group chief financial officer, said the company will look at the possibility of an upscale housing product that will carry a price tag of Rs6,000 per sq ft in Bangalore and around Rs 7,000 per sq ft in Chennai.

“We should, in the coming months, have a clearer picture on the exact positioning and configuration of housing developments at both the sites,” Kanodia said.