“There is a humongous amount of ambiguity over the issue of common area maintenance (CAM),” said Pranay Sinha, president & CEO, Select Infrastructure, while giving an overview of the problem being faced by the industry, on the second day of India Shopping Centre Forum (ISCF) 2008. Citing CAM as the bone of contention, Shavak Srivastava, Square Feet Consulting, UAE, interacted with a panel consisting of retailers, developers and international expert to find a common ground beneficial to all.
Consumption of energy was seen as the biggest charge for CAM, and according to Lt Col. Ashutosh K Beri, it constituted close to about 45 per cent of the overall CAM charges. Yogesh Samat, MD, Foresight Retail, said, “Property tax should not be a part of CAM, and it should also not include the managerial cost and add-on expenses that occur during mall events.”
Giving a developer’s perspective, Neeraj Duggal, VP, Retail Development, Prestige Estates Projects, asked the retailers to devise standards that would force developers to discipline themselves; perhaps, this would bring in some kind of a consensus on CAM charges. Srivastava recommended a flat CAM fee at the time of signing of the lease agreement.
SBP Pattabhi Rama Rao, president, Cookie Man, brought forth the point that vanilla retailers ended up paying the highest CAM, and that is where the correction was needed as they were being put at par with other large-format stores in the fee structure.
While narrating the success stories of their respective malls, Rajiv Bhatia, CEO, Inorbit Malls, Sinha (Select Citywalk), and Duggal (Forum, Bengaluru) unanimously agreed that breakeven point for a mall in India would roughly be anywhere between 5 and 7 years, and if they had an option to turn back time, they would perhaps have built bigger malls than what they have with them now.