Developed with an approximate investment of Rs450 crore and spread across 15,80,000 sq.ft., Neptune Magnet Mall (NMM) became fully operational and opened with huge fanfare in the first quarter of 2012. However, it failed to meet the expectations of both people and industry. In conversation with SCN, Surjit Singh Rajpurohit, Director, IDEAS Consultancy & Advisory, talks about how he dealt with the challenge of converting the nonperforming status of NMM into a successful one in terms of occupancy and footfall.
When did you join NMM and how has been the experience till now?
Although the NMM was launched in 2008-09, it became fully operational in February 2012 and we joined the mall in August same year. Since then, it has been a roller coaster ride. However, since the day we joined and till now, the mall occupancy has reached to 66 percent from 40- 41 percent earlier. Even the footfalls have increased manifold. During December 2011, the total number of footfall was 3,000, while during the same period in 2012, it stood at around 25,000. The footfall is increasing 4-5 percent every week. The mall has witnessed this steep rise in the footfall even when the multiplex is not yet open and it is expected to come by theend of January 2013.
What could have been the possible reason behind the nonperformance of the mall?
The lack of professional approach was one major reason behind the lacklustre performance of the mall. NMM is a very big mall, specially the grandeur with which the opening of the mall was conducted. If I would have been the one heading the mall at that time, I would have opted for a phase-wise opening and would have never forced the mall to open all at once considering its size and occupancy. Even if the mall was opening all at once, an aggressive leasing would have done for at least the tenant mix that was required at that stage. Those were things that led to the non-performance of the mall but now it is in a better situation.
How have the things changed since you have joined NMM?
There are two important elements – the low occupancy which can only be filled by the tenants and the other is retaining the confidence of the existing retailers. We have done some good leasing like bringing the flagship store of the new format of Reliance Digital and DLF Ave.neu which are under fitouts. Future Group has signed many new brands with us including Fashion@Big Bazaar which is already operational. The other brands recently signed by the mall include The Mobile Store, Jashn Sarees, The Apple Store, and Planet Sports. Around 18-20 brands have been signed and are going to open in the next 2-3 months. All this has received a positive feedback from customers. We are doing lots of changes which will be visible from February 2013. We would be crossing around 85 percent of occupancy by that time. We have designed a weekend get away kind of positioning for our mall because it has the biggest family entertainment centre with a level restaurant, 26 kitchens and the best experience through 6-screen multiplex by Cinepolis. The multiplex would be equipped with new technology and more leg room space.
What were some of the major challenges faced by the mall?
NMM was badly slashed because of the downslide of the retail real estate industry. When we took the centre, a lot of challenges were faced. The occupancy and footfall were low. Tenants were in a double-minded situation regarding their continuation in the mall. The system and process of the mall management was totally unorganised. Manpower was another big issue. At that stage, the best strategy was to open the mall in a phased manner. I personally feel that multiplex, food court, and the anchors should have been opened in the first stage. While the multiplex was yet to open, there was a huge food court of which not even 20 percent was operational. There was nothing for which a customer would be coming in, neither for shopping nor for food. For me, these were the biggest challenges that had to be dealt with. Another major obstacle was to bring in the customers without making any “claim.” If my services are full, all my planned 11 restaurants are there, 26 kitchens in the food court and the multiplex is operational, then only I have a claim to make and can invite anyone.
What initiative you had taken to ensure the retailers about NMM’s successful future?
When I joined NMM, the existing retailers and those who just started the fitouts were not confident enough. Some of them were not even ready to start the operations despite completing the fitouts. It took me a good amount of time to convince them that NMM was into a right approach and things will soon become positive. We ensured them that the occupancy which is the most important thing for their survival is coming into the mall and improving on a daily basis. We also assured them of strong marketing. As a result, brands like Nike, Fila, Remanika, and Nirula’s have started the fitouts and almost 80 percent of the new brands are already operational. Both external brokers and in-house teams have taken care of the leasing. We as a mall developer are doing aggressive marketing of the new stores such as DLF Ave. neu along with the retailers through hoardings, fliers, advertisements, etc. We want to spread a message that NMM has a number of surprises which are coming up.
How has the developer-retailers relationship helped NMM to overcome its weakness?
We constantly keep in touch with all retailers and store managers in the mall to understand their problems. On a monthly basis, we organise joint meetings with the operations and marketing departments for any special activity that we plan to do. We share this with our tenants to get their feedback and many of them agree to become our partner in the initiative. We try to maintain a healthy relationship because we know what the retailers are going through and even they understand the amount of efforts we are putting in as a team. They can see the changes and also support us. During my tenure, not even a single store has been closed or even opted for it. In fact, all the stores which were closed down due to non-performance of the mall have re-opened.
What role the mall marketing and management has played to turn around NMM’s performance?
Prior to our joining of the mall, hardly any marketing initiatives were done except the Summer Carnival which was organised by the mall management. However, since August we are indulging in regular activities every month. Also, we are developing regular properties for this mall specifically. For example, people are very fond of kitty parties so we have developed a new property called “Gala Kitty.” We are also making acentre of art and excellence where the masters of different arts teach various art forms, which is helping us get the desired footfalls. As far as the mall management team is concerned, we have hired those who have been in the industry for long. Mall management plays a very important role as they decide the catchment-specific mall marketing. Strong brand recall is also very critical. Create the identity of the mall and then position it accordingly. All this can only be done through strong mall management keeping the tenant mix, catchment and zoning in mind. Most of the malls house the same brands. A customer will come back to NMM only for the experience exclusively offered by it. This starts from parking, staff dealing with customer, washrooms, changing room for kids, play rooms, ramp for handicaps, and many more.
What role the catchment of NMM plays in deciding the marketing activities?
NMM when launched was not catchment specific. The earlier mall management started with the leasing process when the market was going through a rough patch. There were a couple of brands which were not fit for the catchment but were still present. Because of all this, the character of the mall could not come up. I feel that all marketing activities should be catchment specific. We are devoting most of our time and energy on leasing and marketing activities. Apart from properties like Gala Kitty and Centre for Excellence,we are also doing a lot of activities for corporate crowd. We have a very big FEC and a lot of space for the corporates to come in and have their get together. We have also started the shuttle services which start from Powai to our mall and from there to Ghatkopar, Mulund, and Thane just to increase the footfall and brand awareness. Subtly we have also started doing our marketing on various online portals such as Facebook and Zomato.
Has the development of a number of malls in the nearby catchment affected the business of NMM?
Though there are no new developments, existing players are there in our catchment. As of now, we have taken the major chunk of the pie. I believe that it is our time as we have the offerings which the customers have not explored and experienced till now. Talking from the broader perspective, the way our aspirations have changed with the dual income and increase in the disposable income, retail real estate has a bright future. Two malls within a range of a kilometer should not offer the same hypermarket and similar stores. Every mall should have its own identity.
How do you think the mall industry is going to be affected with the approval of FDI in retail?
FDI will definitely bring in new international players which will help in catering to the aspirational needs of the customers. It is also a great news for the malls as new retailers will enter giving a different dimension to the retail mix of the malls. It is actually going to be a win-win situation for the retailers, mall developers and the customers.
What is your success mantra for a mall?
The success mantra for any mall is marketing, marketing and marketing. If your research and leasing are done properly, the only thing that needs to be done is aggressive marketing. The Indian customers are in a habit of shopping from high streets. To bring them to the mall, you need to offer them the experience. I would like to advise the developers coming up with huge malls to do their homework very well. The market is not that easy and is flooded with its own challenges. They should have a long-term vision for their development with an emphasis on research before getting into the business of retail real estate.
Name: Neptune Magnet Mall
Location: LBS Marg, Bhandup (W)
Date of opening: February 2012
Investment: Rs450 crore
Developed by: Neptune Ventures & Developers
Repositioning & marketing by: IDEAS Consultancy & Advisory
Exterior architect: Forrec (Canada)
Interior architect: VPCPL (Vijay Punjabi Consultants)
Lighting by: CD+M Lighting Design Group
Elevators/lifts by: Johnson
Landscaping by: Forrec (Canada)
No. of entry and exit points: Two Built-up area (sq.ft.): 15,80,000 GLA (sq.ft.): 10,56,000
Total no. of stores: Approx 280 inline stores
No. of floors: Ground plus three (four)
Anchor stores: Easyday (Bharti Wal-Mart hypermarket), Metro Cash & Carry, Cinepolis (sixscreen multiplex), GetLost (family entertainment centre), DLF Ave.Neu, Fashion@ Big Bazaar, Iconic
Food court: Two level, 31 kitchens and 10 restaurants
Type of parking space: Two basements (approx 5 lakh sq.ft.) Four-wheeler & two-wheeler parking
capacity: 1,800 and 800, respectively
Rental model: Minimum guarantee or revenue sharing CAM charges: On actual