Mumbai: A city of spooky malls

What began as a dream run in 2003 to build these edifices of retail therapy into real estate gold mines has turned into a horrible nightmare, with developers in the satellite city collectively saddled with more than 1 million square feet of vacant retail space.

In Vashi alone, as many as five malls — City Centre, Palm Beach Galleria, Satra Plaza, Wedding City and Raghuleela — wear a deserted look, even as their managements struggle to keep the ventures afloat. “It all began when Navi Mumbai’s first mall, Center One, opened to a huge response in 2003. Malls were touted to be the temples of urban convergence, spaces where the young city’s new-economy professionals would eat, live and spend. And obviously, we read it all wrong,” admits Bhupendra Shah of Bhumiraj Group and president of Builders Association of Navi Mumbai, whose Full Stop mall on Palm Beach Road has been lying unoccupied for three years. In hindsight, Shah feels the malls in Navi Mumbai are one too many.

“There is demand for just three malls, and we have 35,” says Shah, adding that this has resulted in a huge oversupply of retail space and the satellite city just does not have the potential to absorb the volume. “The moment there was oversupply, brands and companies began arm-twisting mall managements to lower rates. It was just not feasible to be in the business,” he says.
Malls like Palm Beach Galleria, City Centre and Raghuleela, which witnessed near-stampedes on weekends during their heyday a couple of years ago, are now battling for survival. “The slide began during the slowdown in 2008, when some premium brands downed shutters in Navi Mumbai after revenues did not match their projections. While some big stores and international brands shut shop when the abysmal footfalls left them deeply in the red, others migrated to the newer, swankier Inorbit Mall that emerged as the hot destination for Navi Mumbaikars when it opened in late 2008,” says Vashi-based consultant Hiren Thakkar.

But just what went wrong with the mall model of growth? “The three key reasons for a mall’s failure are poor planning, inadequate research and sold-out models. Malls have to be perceived as long-term assets by developers, rather than short-term commercial projects,” says Susil Dungarwal, chief mall mechanic at mall advisory firm Beyond Squarefeet.

According to Dungarwal, before planning a mall, it’s very important to prepare an infrastructure accessibility report and do a catchment area analysis, failing which, even well planned malls can be failures. “By catchment area I mean the place where one may find a sizeable population of affluent people who do not mind spending a lot more on some of their smallest luxuries. The malls of Navi Mumbai are facing the consequences of not adhering to the basics,” he says, adding that there’s a lesson in this for Mumbai’s malls too, who face a similar risk.

According to industry estimates, 700 malls have been planned in the Mumbai Metropolitan Region, of which about 170 are already operational and barely a dozen are considered runaway commercial successes.

Seeing the once-operational malls facing rough weather, even upcoming malls in Navi Mumbai are having second thoughts. Ripplez, a mall in Sector 8 of Airoli, that was expected to change the way the residents of the node shop, is not even 50% occupied six months after completion. While two other ambitious projects, the Wedding City and Gold City theme malls, have been put on the back-burner, a handful of other malls are ready in nodes like Kharghar, Seawoods and Nerul, but there’s no news yet about their formal inauguration.