Not too long ago, the Vasai–Virar region was on the list of “picnic destination” for the most in Mumbai. Majority of the inhabitants of this region back then (and still to an extent) belonged to the fishermen tribe. With the influx of population taking a toll on the city of Mumbai, eventually people started looking at this region for stationing themselves and travelling everyday to Mumbai for work and education. Things are changing now. The Vasai–Virar is rapidly developing in all spheres related to real estate – be it residential, commercial, retail, hospitality, entertainment and amusement We bring before you a complete analysis of this belt and how it could just be an apt location for you to consider for your next retail project!
With a growing population of 1.2 million residents, Vasai–Virar is the fifth largest city in Maharashtra. The population in the region was 1,94,262 during 1971 as per the census. Population growth rate of Vasai–Virar city has always been higher than Greater Mumbai and the MMRDA region. Emerging retail market with four upcoming malls spread over 2 million sq.ft. of retail space. It is 1 of the 10 cities in Maharashtra which are eligible for FDI in multi-brand retail. Presently, there are 2,40,082 residential and 36,277 commercial properties in 4 councils in the Vasai–Virar region. The incremental demand in this region would substantially increase from the current 2,76,359 units to 4,72,574 in 2021. Since its inception in 2012, the Vasai–Virar Municipal Corporation (VVMC) has been very instrumental in rapid development of the Vasai –Virar city. An annual budget of Rs1,266 crore for the further development of civic infrastructure in the region has been presented in 2012. The Ministry of Urban Development has taken Vasai–Virar under the Urban Infrastructure Development Scheme for satellite town, making it the only city from Maharashtra to be taken under this scheme.
Government has approved second largest SEZ project of more than 3,000 acres of land. MMRDA plans to build a business centre in the lines of BKC on 1,500 acres of land. IT hubs and an exhibition are created on 200 acres of land. The region has strong bus service network of Vasai Municipal Transport (VVMT). Approximately 60 acres of land is allotted to develop a tourist zone which will include a bird sanctuary and an international amusement park.
With the above setting the context for the potential this region presents, it is obvious that very soon we shall see a boom in the real estate development with retail walking at close lengths to the burgeoning residential development.
Why Consider the Vasai–Virar Belt?
Viva Group has been at the forefront of real estate development in this region. What gives them an advantage is the thorough background study they have conducted and the close tab that they are keeping on the initiatives being undertaken by the VVMC. Sharing his understanding on the region, Mehul Thakur, Director, Viva Group, says: “With good connectivity, the region now has facilities such as affordable housing, better infrastructure and better governance. The region has lot of infrastructure projects underway and a lot of scope for investors. The region is pollution free and away from the hustle bustle of Mumbai city life. In the present scenario, people want to live in places where they can breathe fresh air and have a sound sleep. Vasai-Virar is one of such regions and therefore a good place for living and leisure. It is one of the places that are close to Mumbai and have good connectivity. People can easily travel to the city by locals which take approximately 90 minutes to reach Churchgate Station (downtown Mumbai) or 30 minutes to reach suburbs of the city.” On what makes the region a sure shot success for retail developments, he adds: “The region is closer to trade townships such as Boisor, Palghar, MIDC and Gujarat, which makes it convenient for the retailers to acquire goods and services conveniently.”
Shubhranshu Pani, Managing Director, Retail Services – Jones Lang LaSalle India, states: “The population in this belt is certainly ready for retail. Most of the people living there work in Mumbai, with prices for homes of 1,000 sq.ft. ranging from Rs40 to Rs60 lakh. This makes it a Section A catchment for retail business. The Vasai-Virar belt has now become a municipality, with a population over 15 lakh. It has a well-established residential catchment and the population is growing at a fast pace. In other words, it is definitely a promising retail destination for the future. There are no organised shopping centres in this belt as yet, but the first few are being planned and some are already under construction.” According to him, the catchment holds the highest potential for mid-premium to value retail.
Do’s and Don’Ts
Sharing his views on what the developers need to consider before setting their goals on this region, Pani says: “Mall developers should bear in mind that three malls are already in the planning/construction stage in this belt. Unless they have a great location and sufficient tie-ups with anchors, they would be well-advised not to plan to launch in this belt. There is demand for retailers, so they should launch their retail destination only with the pre-commitment of retailers.” Elaborating on the challenges that the retailers could face and roadblocks that they would have to overcome, he feels that there would not be any serious challenges in this region’s growth as it has sufficient saturation in terms of population and the social infrastructure is good. “There is no retail infrastructure yet, which is precisely what makes it a promising destination for the right kind of retail in the foreseeable future,” Pani adds.
Adding a word of advice to his peers, Thakur suggests: “The primary reason for which people are migrating to this region is affordability and value offering in terms of real estate and the project amenities. We should keep residential prices in control and give momentum to the current growth. Vasai-Virar has bigger landmass compared to Mumbai, and this region has the potential to be developed into a metropolis in the coming years. There are plans to construct one of the biggest hospitals in Maharashtra, biggest educational campus in India on a 250 acre layout with infrastructure to train and educate students in the major sports which are played in Olypmics, to give a boost to the tourist. To give you the potential that this region offers, we are also planning a theme and entertainment park on a 200 acre layout.”
Insights into Retail Destination from Viva Group
According To Thakur: “Our group wants to provide the residents of the region with all the amenities as per their necessities. We plan to bring brands closer to their homes and give them a good shopping experience. One more reason is that Vasai-Virar belt has become a trading hub for micro markets such as Palghar, Boisar and Dahanu, which connects the travellers to the region so they can enjoy leisure and shopping requirements in the malls.” Elaborating on to the retail projects undertaken by the group, he adds: “Currently we are working on two major mall projects namely VIVA Swastik and VIVA Integra, located in Vasai East and Nalasopara West, respectively. VIVA Swastik will spread over 5 lakh sq.ft. with fine retail experience of atrium facing shops, 5-screen multiplex, 78 vanilla stores, 8 anchor/mini anchor shops, 51,000 sq.ft. hypermarket, 25,000 sq.ft. banquet hall and car parking for almost 400 four-wheelers and 300 two-wheelers. VIVA Integra on the other hand is also spread over 5 lakh sq.ft. with 107 vanilla stores, 8 anchor/mini anchor shops, 4-screen multiplex, 37,000 sq.ft. hypermarket, 15,000 sq.ft. entertainment zone and the same car space as of VIVA Swastik.” Vasai-Virar is an old market with already established strong local retailers who offer value offerings and local brands that have strong recall value and repetitive customers. Thakur states: “We plan to assimilate these established brands in our mall along with national brands and offer a holistic approach towards shopping.”
From a research that Viva Group carried out in association with Knight Frank, it has been observed that over 75 percent of the population consists of joint families and have at least two to three working members per family. Over 90 percent of the respondents surveyed during the research work had strong inclination to switch to malls for shopping and 80 percent of the surveyed watch movies at least once in a month.
Shares Thakur: “These are just some of the positive findings we have come across and that have been the major motivation factor for us to announce these projects. The residents regularly visit malls such as Inorbit and Infinity for their shopping and entertainment needs since the retail penetration is low. The customers here are price sensitive, so we are also open to introduce flea markets/local retailers and inculcate shopping habits and eventually making them repeat customers. Owing to upcoming residential units, there is strong demand for household and furnishing, electronics, home décor retailers. Also there is lack of entertainment facilities in this region, FEC and amusement parks have a huge market to cater to. Kidswear and baby products have been given high ranking as important category in our research, which indicates that children will be key influencers for visiting malls.”
He Reveals: “Based on the research we undertook, we have found that the awareness of malls in this catchment is very low. Approximately 20 percent of the respondents have never visited a mall. Therefore, we need to bear in mind that the upcoming malls are going to introduce the concept of organised retail to the resident population. Hence, the mall design, positioning and tenant mix need to be such that they create a comfort zone for the consumer and cater to their aspirations. It would be a good idea to include flea market areas, regular promotional events and other such initiatives that can help in this endeavour. There is also dearth of entertainment options in the catchment and this category can play an important role in driving footfalls. A strong multiplex player along with an FEC can serve this purpose.”
The research undertaken by Viva Group clearly points out that superior quality, availability of goods in one place and offers or discounts are the parameters that decide the consumer preference for one mall over another. Additionally it should be noted that service is not a key criteria, instead discounts and economically prices products are what the consumer seeks. Hence, value retail should form a substantial portion of the tenant mix. It was clearly pointed out that 99 percent of the respondents were keen to switch to organised retail from kirana stores. The reason why mall shopping has still not sunk in the daily habits of the inhabitants of this region is because the distance from their homes prevents them from visiting shopping centres. Proximity is a key parameter that decides the preference of outlets. For example, most groceries and personal care products are purchased from local retailers. The findings insist that the consumer of this region is price conscious and this should reflect in the tenant mix.
Talking about the tenant mix for food, the research pointed out that 61 percent of the respondents ranked Indian fast food as the most preferred cuisine. This was followed by South Indian and Punjabi cuisines. The F&B tenants should therefore constitute a significant number of fast food and Indian cuisine restaurants. A large majority of the population is non-vegetarian and this needs to be kept in mind while designing the tenant mix for the F&B and food court area of the mall.
Talking about residential projects from the stable of Viva Group, Thakur shares: “We have established many residential townships in the regions such as the Viva City, Durvas, Viva Swarangan, VIiva Vishnupuram and many more. Some more residential projects include Global City Virar, townships by Evershine Builders, residential projects closer to Global City, Rustomjee, and Upcoming projects by Viva.” The real estate market is on a boom in this region and real estate has appreciated by more than six times from 2007 to present. As Thakur states, residential apartments booked in the initial years have given good returns, with this the purchasing power has also increased and people have larger disposable income. He further adds that the growth of peripheral markets such as Palghar, Boisar, and Safala has also given rise to the retail development of Vasai-Virar region. Major developers from Mumbai like HDIL, Rustomjee, Ekta Group, Evershine, Anchor, Tata, andw Mahindra have already made their presence felt in this region and are adding units.
Keeping all the above in mind, without any iota of doubt it can be stated that the Vasai–Virar region offers a lot of scope for retail business and this seems to be the right time to take the leap.