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    Kochi: Preparing for retail renaissance

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    Once a lesser known city in the South Indian state of Kerala, Kochi opened its gates for retail renaissance in January 2006 when Bay Pride mall, one of Abad Builders’ constructions, became operational. The city soon witnessed the entry of brands including , Archies, Levi’s, , Koutons, Citizen, Metro, Spykar, Fabindia, Navigator, John Players, Provogue, Crocodile, and Hidesign through their exclusive brand stores. In October 2008, , a 350,000 square feet shopping mall by Oberon Edifices construction, became operational with almost all possible retail categories present and helped a new pool of retailers to join the league. Reliance Retail alone opened four store formats in the mall — Reliance Super, , Reliance Trends and Reliance Footprint. Besides, brands like Titan, Walk-in M&B, Woodland, Zapp!, Zodiac, , Baskin Robins and made their debut in the market.

    After gauging consumer sentiment in the city over the past three years, most retailers are now keen to expand through other parts of the city, and as a result real estate developers — some national and some overseas — including APK Builders, Emkay Group and Aerens International have ventured into Kochi to develop retail-oriented establishments. The latest inclusion in the league is Prestige Group, which has announced a 6-lakh square feet retail development called Forum Mall, to be completed in the next three years. With most of the forthcoming malls lined up to be operational in the next year, experts believe that a whirlwind of retail activity is set to hit Kochi.

    Location strategies

    The location which all the major constructions are centered on — Bypass Edapally — is more like a gateway to the city. Oberon Mall is located right on the National Highway (NH 47) Bypass at Edapally. Again, three other prime constructions that include the APK Builders-promoted 130,000 square feet mixed use project Grand Mall, Emkay Group promoted 1.5 million square feet and Aerens International promoted 270,000 square feet Gold Souk are also located at Bypass Edapally. Besides, high streets like MG Road and some other locations in close adjacencies to Edapally including NH Maradu, have also been witnessing retail development.

    JLL’s India Real Estate Market Maturity Index places Kochi ahead of cities such as Nashik, Jaipur and Mangalore on the basis of real estate market transparency and overall volumes of office, retail and hotel market activity.

    The catchment

    Elaborating the scope of retail developments in Kochi, Nisanth V K, marketing manager, Oberon Mall, stated, “Kochi is a virgin market and has a very good potential. It comprises consumers across segments, higher income to lower income groups. Once all the malls become operational, the place will be one of the biggest retail destinations in Kerala.”

    Sharing his thought on the catchment, Ahluwalia, president, Ltd said, “Kochi is an important destination for trade/port/sightseeing and thus eventually a good ground for retail development. The beautiful water bank of Kochi draws the attention of travelers across India and internationally.” He further stated that looking at the future potential across a combination of office, retail and hotel sectors together with an assessment of risk profiles, Kochi is believed to offer the most robust opportunity. “Kochi should not be ignored as opportunities continue to abound there for those savvy enough to understand the unique dynamics of its market,” he pointed out.

    Retail experience

    Koutons forayed into Kochi in 2006 and is operational in the city over the last three years with just a single store. However, the retailer finds the market impressive not only for his brand, but also for entertainment and fine dining chains. Speaking about the retail experience in Kochi, Ahluwalia said, “The market in the pan-India context is very good and it comprises defence personnel, civilians, traders/businessmen and tourists.” Elaborating further, he stated that he does not find any specific structure of customers for his brand in Kochi. However, he sees a very good prospect for his brand to grow in the market. “We are planning to open two to three stores in Kochi over the next year or two. But the locations has not yet been finalised,” he stated.

    Echoing this, Krish Kunda, VP, M&B Footwear, which operates one store in the city, said, “The store at Oberon mall is the only outlet of our brand at Kochi; it opened around 4-5 months ago. The mall is located slightly away from the city, but the store has been doing very well. We are interested in opening another high street store on MG Road, which is the retail hub in Kochi.”

    Sharing his thoughts on the kind of brands and formats of retail that have been doing especially well in Kochi, P V Arshad, CEO, APK Builders, the company developing Grand Mall, said that in Kochi, both high end and mid range products are doing well.

    Instant classical

    Total population: 1,519,000 with a density of 6,489 persons per square kilometre (as of 2007).

    Female-to-male ratio: 1,024:1,000, higher than the national average.

    Annual per capita income of city residents: USD 2,002 (in 2006), the fifth highest in India.

    Provides an enviable mix of low labour and operating costs, attractive real estate options and solid infrastructure.

    Most transparent real estate market of India’s emerging cities, with levels of transparency comparable to Mumbai, Bengaluru and Chennai.

    Development of technology parks and SEZs is drawing companies and employees to the city, besides its serene tourist locations, which are always a crowd puller.

    Prime retail locations of Kochi include Bypass Edappally, Bypass Bytilla, NH Maruda, Marine Drive and MG Road.

    Kochi topped the list in Jones Lang LaSalle’s (JLL’s) India 30 research in 2008, offering the most favourable prospects for retail.

    JLL’s India Real Estate Market Maturity Index places Kochi ahead of cities such as Nashik, Jaipur and Mangalore on the basis of real estate market transparency and overall volumes of office, retail and hotel market activity.

    Mall culture

    In Kochi, generally all sections of consumers visit malls. They come not only for shopping, but in most cases for window shopping and also for other entertainment programmes organised in malls. “Actually, the locals do not have any other avenues for entertainment other than coming to malls. For entertainment, watching movies and eating out — especially in areas outside the city limit where the traffic is less heavy – are the norm. But now, they are consciously nurturing the mall culture at their own level,” stated Arshad.

    Missing trend

    Despite the fact that the complementarities of a mall and multiplex have been proved successful time and again in any demography, this element is found missing in the operational malls in Kochi and in other under-construction projects as well. Though Nisanth confirmed that will open a four-screen multiplex at Oberon Mall in the next three months, Grand Mall has a different story to tell. “We do not have a multiplex; rather, we are looking at a very large food court as a main draw. Consumers in Kochi love to dine out and this gives us a very good opportunity to offer an elaborate food court to our customers,” Arshad stated.

    Industry expectations

    As of now, all retailers and developers operating this market are busy strategising their expansion plans. “There are at least four malls coming up in two years in Kochi. Though the market is a bit down these days due to economic slowdown, we are expecting a good revival in the next 6-8 months and are very hopeful about positive sentiments once our project is completed,” concluded Arshad.

    Sarimul Islam Choudhury