The Hindu Business Line : `Foreign investors keen on developing malls in India'

OWNERS and developers of Indian malls need to consider the importance of controlling the management of their malls to maximise the value of their investment, said Mr Charles Grossman, Chairman, International Council of Shopping Centers Inc (ICSC).

This has been a major challenge for most of India's mall owners, who, until recently, have mostly developed properties and then sold it.

According to Mr Grossman, international investors were looking seriously at India.

However, he said that in the US rental values had appreciated significantly over a number of years and that it was essential to explore the right mix of tenants. He said that by controlling change (changing the mix of tenants) it was possible to maximise the value of the mall.

He was speaking at the Shopping Centers and Retail Conference in Mumbai.

He said that foreign investors would consider part-funding mall development in India, provided there was a similar commitment from Indian partners.

Mr V. Vaidyanathan, Country Head, Retail Banking, ICICI Bank, said that in 2000 there were three malls in India, this grew to about 25 in 2003 and this year there are close to 200 malls being developed or are on paper.

In the US, he said, most of the 1800 malls were owned by real estate mutual funds and were managed by professional mall managers, who were worried about positioning of the mall, its management and the use of professional practices.

In India, there are a number of serious issues for malls — long-term funding, development of retail infrastructure and planning.

Mr Vaidyanathan said that retailers and developers needed to consider details such as pacing mall development, zoning laws, positioning of specialty or entertainment malls.

However, the silver lining for the industry was that GDP growth was at 7 per cent for 2004-05, poverty had halved from the levels prevailing in the 1980s and consumers had higher purchasing power.

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