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Bangalore:
Retail Market Report
BY SAYAN DAS
BY SAYAN DAS
BANGALORE RETAIL MARKET STATISTICS: 2013 AND BEYOND
7.65 million sqft
of operational shopping mall space
of which 7% is vacant
12%
5% to
is the avg. annual growth rate
of mall rentals since 2010
5.67 million sqft
of under-construction mall space of
which 45% is pre-booked
9%
5% to
is the avg. annual growth rate
of high-street rentals since 2009
13.79 million sqft
of planned mall space
16K
3K to
is the Annual Avg. Trading
Density per Useable Carpet Area
for shopping malls
1
EXECUTIVE SUMMARY
In past years, Bangalore’s retail journey has been
booming with several international & national brands setting-up
their stores in the city. Favourable demographics, robust
economy, rising per capita income, easy availability of credit &
large scale retail developments have fueled the growth of
Bangalore’s retail market.
Bangalore today houses large format retail malls catering to the
luxury segment as well as value shoppers. The city is a prefered
retail destination in the country after Mumbai and Calcutta. As of 2012,
total operational mall space in the city is added to be 7.65 million
sq.ft and the vacancy is 7%.
Significant residential activity & availability of land fuelled the
development of shopping malls in SBD & PBD locations of the
city. In terms of GLA, PBD and SBD respectively account for 48%
and 42% of the total shopping mall space while CBD locations
occupies 10% of the total mall space in the city.
Bangalore in present houses neighbourhood, community and regional
malls. Mantri Mall at Malleshwaram, Phoenix Mall at
Whitefield & Orion Mall at Dr. Rajkumar Road are key
regional malls while The Forum at Koramangala & Meenakshi Mall
at Bannerghatta Road are prominent malls in the city.
Among the PBD locations, residential micro-market
of ORR - Sarjapur has an opportunity for development of shopping
malls. Whitefield on the other hand has substantial operational mall
space and accounts for large percentage of total operational space
Amongst PBD . Location of Mysore Rd, Bannerghatta Rd,
Tumkur Rd & Hosur Road are in balanced state with retail
activity in these locations complementing the residential activities.
Retail activities across Bangalore North and Old Madras Road
(OMR) are booming and have retail infrastructure development
potential in the upcoming years.
BANGALORE: RETAIL MAKET REPORT 2
Malls across the city are essentially anchored around a
department store & / or a hyper-market or super-market chain.
Few years ago, entertainment in the shopping malls was
limited to multiplexes however; entertainment is now growing to a
status of being an important anchor. Brigade Orion at Rajajinagar
and Park Square in Whitefield along with multiplexes have roped in
various gaming retailers.
Wholesale retails is one of the emerging formats in Bangalore.
Conducive Government regulation have led to the entry of many
such players in the city and several new brands are
progressively venturing into the city’s retail market. Future Group
with Salarpuria Sattva Group is set to launch first of its kind
wholesale market - World Market on Old Madras Road in the city.
Luxury retail has come as a new concept here at the
establishment of UB City at Vittal Mallya Rd. This
segment has witnessed slow but steady growth. However, the
presence of luxury retail is expected to be restricted to the CBD &
SBD locations.
Shopping mall formats in the city continue to develope over time. One
MG Road, in CBD is designed as an enclosed strip mall and lately
Karle Properties is planning to develop a Town Center, which is a
combination of open-air / high-street and an enclosed mall format.
Rental values in shopping malls in the city are expected to
witness a steady growth within 1 - 3 years, owing primarily to a
steady increase in the metropolitan population and relaxation of
FDI rules.
High-street locations will carry on to coexist with the malls in the
city despite infrastructure issues and increase in mall space.
Rental values across high-street locations are likely to witness
nominal growth in short term.
HISTORY OF RETAIL DEVELOPMENT IN BANGALORE
Before 1949
Bangalore had two distinct
administrative bodies:
Bangalore City
Municipality (BCM) &
Bangalore City Military
Station Municipality
(BCMSM)
1950 - 1970
 Formation of Bangalore
City Corporation (BCC)
Retail developments in the city were mainly spread across two prominent
clusters :
Akkipet, Ballepet, Chickpet, Cubbonpet, Avenue Road and other markets in
petta region catered to the retail needs of people in old Bangalore
Shivajinagar, MG Road, Commercial Street and Ulsoor were key retail
destinations serving the Cantonment area
 Areas around Brigade Road gained prominence as key destinations for
entertainment mainly due to presence of Opera House. Various theatres
by integration of BCM and
BCMSM
1970 - 1990
Formation of Bangalore
Development Authority 
in 1976 led to
development of new
residential layouts namely
Jayanagar, HSR Layout
and BTM Layout
namely Galaxy, Blue Moon, Rex and Plaza theatre commenced operations
during this time.
BDA developed neighbourhood shopping centres (BDA complexes) with retail
shops to cater to the daily needs of residents within the layout. Jayanagar BDA
complex was the first BDA complex to commence operations in 1978, followed
by Indiranagar and Koramangala BDA Complexes.
3
1990 - 2005
Economic
Liberalization in 1991
In 1997, Government of
India (GoI) permitted
100% FDI in wholesale
cash and carry retail
format
2006 - 2012
Government of India
(GoI) allows 51% FDI in 
single brand retail in
2006
Completion of Bangalore 
International Airport at
Devanahalli in 2008 led 
to opening up of land
parcels for development
towards Bangalore North
2013
& Beyond
In 2012, Government of
India (GoI) allows
100% and 51% FDI in
single and multi-
brand retail
respectively
Economic Liberalization in 1991 led to entry of various international brands in
the city. Nike, Reebok, Adidas and KFC set-up their stores along high-street of
Brigade Road and Commercial Street.
Brigade Road started transforming in to a retail high street of the city; Mota Royal
Arcade and 5th Avenue were among the first few modern format retail
shopping centres to commence operations during this period
In 2003, Metro Cash and Carry opened its stores at Yeshwantpur and
Kanakpura Road
Bangalore’s first mall - The Forum Mall at Koramanagala was operational in
2004 .
Emergence of Indiranagar 100 Feet Road as a preferred high-street location
within SBD.
Increase in demand for mall space led to development of newer malls primarily in
CBD and SBD locations. Garuda Mall and Sigma Mall were among the
prominent malls to commence operations during 2006 - 07
UB City at Lavelle Road became Bangalore's first luxury shopping mall to
start operations in 2008. With completion of UB City, Lavelle Road graduated to
become a luxury high-street location in the city
In 2009, Bangalore witnessed completion of Forum Value Mall at Whitefield, the
city's first value format mall
Development of regional malls - Phoenix Market City at Whitefield, Mantri
Square at Malleshwaram and Brigade Orion at Dr. Rajkumar Road started
operations between 2009 - 11
FDI in retail paves way for entry of international retailers and funds
City expected to witness entry of major brands like Carrefour, Walmart,
IKEA
BANGALORE: RETAIL MAKET REPORT 4
GROWTH OF RETAIL SECTOR IN BANGALORE
5
In the past few years, Bangalore’s retail journey has been growing with several international and national brands setting-up their
retail stores in the city. Favorable demographics, robust economy, rising per capita income, easy availability of credit and large
scale retail developments have fueled the growth of Bangalore’s retail market.
Growth in the IT/ITeS industry has led to migration of the
educated middle-class to the city, consequently steering
residential developments as well. Bangalore’s residential
market witnessed an annual absorption of24,000
residential units during calendar year2012 and the
residential market is projected to grow at an annual growth
rate of 15%, making the city one of the most promising
residential markets in the country.
Growing Population
At 9.6 million, Bangalore urban district is the fifth most
populous urban district in India as of 2011. It registered a
decadal growth rate of 47% as compared to 2001. The city is
expected to continue its growth trajectory; and population
for the year 2021 is pegged at 14.0 million.
Robust Economy and Growing Per-capita Income:
Bangalore’s economic development is attributed to the
healthy growth of its IT/ITeS industry. Currently the sector
accounts for more than 1.0 million jobs in the city and will
continue to add over 100,000 jobs every year for next 3 - 5
years. Apart from IT/ITeS sector, the city is also witnessing
advancements in the field of biotechnology, aerospace and
aviation sectors.
Robust economy, growing population and high disposable
incomes have led to emergence of the city as a preferred
retail destination by both national and international brands
and over the years, retail spaces in the city have witnessed
an evolution in terms of design and quantum of spaces.
Bangalore today is the most sought after retail destination
in the country after Mumbai and Delhi mainly due to the
following reasons:
The growth in the IT/ITeS sector has been well supported
by the growth in the per-capita income of the city. As per
1
McKinsey , by 2030 Bangalore is likely to have the highest
per-capita GDP among all the Indian cities.
Shift from necessities to lifestyle products:
Retail growth in the city is linked to consumer needs and
behavior. Rising income levels and global exposure have
resulted in increased purchasing power. Additionally,
consumer spends have shifted to lifestyle products and
services from daily necessities.
1McKinsey - McKinsey Global Institute - India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth, published in April 2010.
BANGALORE: RETAIL MAKET REPORT 6
BANGALORE HIGH STREETS
Figure: Key High-Street locations of Bangalore
Byappanahalli
M G Road
1 M G Road
U B City
Bangalore Club
Existing Malls
Key high-street locations
Metro Station
Metro Rail Phase I - Reach 1 (Operational)
Metro Rail Phase I - UG2 (Under-Construction)
Garuda Mall
7
The high-street locations of Bangalore have captured the retail trends and over the years have adapted to changing retail needs
and consumer aspirations. Despite offering better brand visibility as against a shopping mall, key challenges faced by these
locations include traffic congestion, lack of parking space and unobstructed pedestrian walkways.
A high-street synonymous with a market or bazaar is a prime
retail hub in a city with street aligned retail stores. These are
predominant avenues for retail, trading and entertainment
activities. Early high-street locations of Brigade Road and
Commercial Street have been in existence since 1950s are
located in close proximity to the CBD.
With the spatial expansion of the city, the high-street locations
are no longer confined to the CBD area. During the last decade
prominent high street locations of Indiranagar 100 feet Road,
Jayanagar 11th Main Road, New BEL Road and Marathahalli
have emerged towards the Secondary Business Districts (SBD)
and Peripheral Business Districts (PBD).
The high-streets of the city exhibit distinct characteristics and
cater to a diverse target segment. Brigade Road and
Commercial Street continue to remain the most sought after
high-street locations in the city; Lavelle Road2attracts High
Networth Individuals (HNIs) and super rich of the city, offering
niche and exclusive products. Marathahalli over the years has
developed as a location for discount / outlet stores, whereas,
New BEL Road has emerged as an important high-street
location catering to residential areas of Sanjaynagar,
Sadashivnagar and Rajajinagar.
Of the SBD locations, Indiranagar 100 feet Road has evolved
from an upmarket plush residential location to one of the most
preferred retail destinations by both national and international
brands. High-street locations of Jayanagar and Malleshwaram
continue to interest retailers in the women’s apparel, gems and
jewelry segment.
Key areas witnessing increased retail activities in Bangalore
North include Kamanahalli Main Road and Sahakarnagar while
Marenahalli Road (JP Nagar - ORR stretch) towards south-
west of the city is gaining prominence as a retail high-street
mainly due to limited shopping mall space in the vicinity.
During 2009 - 12, rental values across high-street locations of
the city grew annually in the range of 5 - 9%mainly due to limited
upcoming supply and lower vacancy rates.
2Lavelle Road includes areas of Lavelle Road and Vittal Mallya Road
Bangalore’s high-street locations continue to attract national and
international retail brands regardless of increased mall space in
the city due to higher brand visibility and considerable footfalls.
However, traffic congestion, lack of unobstructed pedestrian
walkways and limited parking facilities are some of the basic
concerns that require improvement.
When profiling of tenants3in select high-street locations of the
city- a key observation was high-street locations are preferred
mainly by Apparel and Footwear Tenants followed by Food and
Beverages(F&B), and Electronic Goods, reason being
consumer buying trends and real estate cost.
Characteristics of four prominent high-street locations in the city -
two established high-streets and two having evolved in the last of
couple of years have been addressed in the study.
Figure: Product Category Distribution: High-Streets
7%
3%
9%
4%
54%
7%
16%
Apparel & Footwear Food & Beverages
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Automobiles
3Profiling of tenants is based on the number of stores and area of the stores has not been considered for the same.
BANGALORE: RETAIL MAKET REPORT 8
BRIGADE ROAD
Figure: High-street Stacking: Brigade Road
Brigade Road
Apparel & Footwear Food & Beverages Books / Stationery / Gifts
Electronic & White Goods Others Personal Care / Watches / Jewellery
Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time.
Map not to the scale.
9
Brigade Road forms the stretch between Cauvery Store on M.G.
Road and Opera House abutting Residency Road.
One of the most prominent high-street locations of Bangalore,
Brigade Road has been in existence since the British era.
During 1970 - 80s, this high-street gained prominence as an
entertainment hub of the city with existence of theatres namely
Opera House and Rex.
This high-street also boasts of first few shopping complexes in the
city; Mota Royal Arcade and Fifth Avenue are operational since
early 1990s.
Presence of shopping complexes strengthened Brigade Road as a
high-street location and over the years this location has emerged
as the most preferred location for any new brands venturing into
city. The high-street houses flagship stores of various retail brands
and is dominated largely by Apparel and Footwear brands.
This high-street in coming years will continue to attract retailers
owing to improved connectivity with the completion of Metro Rail
Phase I. This is certain to boost footfalls across this location. Due to
limited availability of new supply and low vacancy rates, rental
values across this high-street location are expected to increase
nominally in short to medium term.
Figure: Product Category Distribution: Brigade Road
6%
9%
7% 53%
7%
18%
Apparel & Footwear Food & Beverages
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Brigade Road
Operational Since
Driving Factor
Shop Size (sqft)
Existing Shopping Malls in proximity
Advantages
Concerns
Rental Values4(INR/sqft/month) Ground Floor
Average Annual Rental Appreciation 5
6
1980s
Location; proximity to MG Road; one of the early high-street locations
1,000 - 10,000
Garuda Mall (0.5 km), 1 MG Road (2 km)
Prime location, easily accessible, connectivity via Metro Rail
Limited parking space, one - way traffic allowed, no public
transport along the high-street
350 - 450
9%
Capital Values (INR/sqft) 30,000 - 40,000
4Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%
5Average annual rental appreciation figures are considered for the period between 2009 - 2012
6In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
BANGALORE: RETAIL MAKET REPORT 10
COMMERCIAL STREET
Figure: High-street Stacking: Commercial Street
Subanjali
Silks
Reliance
Trends
Commercial Street
Levis
Metro
Ice creams
Catwalk
Davanam
Apparel & Footwear Food & Beverages
Electronic & White Goods Others
Reid & TaylorBooks / Stationery / Gifts
Manyavar
Personal Care / Watches / Jewellery
Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time.
Map not to the scale.
11
Commercial Street emerged as a prominent retail street
serving the then Cantonment area mainly because of its
proximity to Shivaji Nagar. Earlier, this high-street was
essentially a traditional market characterized by small format
retail stores.
Commercial Street now accommodates contemporary brands
and modern format retail stores while simultaneously retaining
its character and the traditional bazaar feel. This high-street
endures sizeable retail stores mainly targeting women’s
apparel and accessories segment.
There are no operational or planned malls in this high-street;
existing department stores along this high-street include
Westside and Max.
Key challenges faced by this high-street is lack of availability of
parking slots leading to congestion during peak shopping hours
and weekends.
Rental values across this high-street location are likely to
continue to the existing growth trend mainly due to lack of
newer retail spaces and lower vacancy rates.
Figure: Product Category Distribution: Commercial Street
6%
5%
6%
2%
7%
74%
Apparel & Footwear Food & Beverages
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Commercial Street
Operational Since
Driving Factor
Shop Size (sqft)
Existing Shopping Malls in proximity
Advantages
Concerns
Rental Values7(INR/sqft/month)
Average Annual Rental Appreciation
9
Capital Values (INR/sqft)
1950s
Proximity to established markets - Shivajinagar and Russel Market
500 - 30,000
Garuda Mall (2.5 km), 1 MG Road (2.0 km)
Prime location, easily accessible
Smaller format retail stores, limited parking space, congested
during peak hours and no entertainment options
Ground Floor 300 - 325
8
9%
26,000 - 28,000
7Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%
8Average annual rental appreciation figures are considered for the period between 2009 - 2012
9In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
BANGALORE: RETAIL MAKET REPORT 12
LAVELLE ROAD AND VITTAL MALLYA ROAD
Figure: High-street Stacking: Lavelle Road and Vittal Mallya Road
Reward
Dolphin Kidswear
Scent
Cinebells
Le Creuset
Galleria Time & Space
I art
Harley Davidson Showroom
Kaya Skin Clinic
Vittal Mallya Road
Chemistry
Crisp
Oryza Spa
Hakims Aalim
Java City
Cloud Bar
The Biere Club
Cinnamon
Limelight
La Cristaal
Sunny’s
Ruosh, Bounce
Walton Road
UB City
N S Jewellers
Café Coffee Day,Forest Essential
Biguine Paris Saloon & Spa
Ferns N Petal
Porsche Showroom
Honda Showroom
Apparel & Footwear Food & Beverages Maruti Suzuki Showroom
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Automobiles
Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time.
Map not to the scale.
13
Lavelle Road high-street encompasses areas of Vittal Mallya
Road, Lavelle Road and Walton Road.
Once an upmarket, plush residential area, Lavelle Road
currently has established itself as a luxury high-street of
Bangalore.
In early 2000s, this high-street had a few exclusive restaurants
and lounges. Completion of UB City in 2008 and proximity to
affluent neighbourhood triggered the development of luxury
retail spaces along this high-street location.
An upmarket retail high-street, it is marked by the presence of
signature stores of various luxury apparel brands and luxury
spas & salons. Additionally it is also witnessing the opening up
of luxury automobile showrooms namely BMW Cars, Porsche
and Harley Davidson.
Key under-construction retail buildings in this high-street
include Bagmane Ventures (0.02 million sqft).
Lavelle Road will continue to remain a luxury destination of the
city with various luxury brands eyeing to enter Bangalore.
Rentals across this high-street are likely to retain the past growth
trend in short term.
Figure: Product Category Distribution: Lavelle Road and
Vittal Mallya Road
9%
9%
33%
3%
18%
3% 25%
Apparel & Footwear Food & Beverages
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Automobiles
Lavelle Road and Vittal Mallya Road
Operational Since
Driving Factor
Shop Size (sqft)
Existing Shopping Malls in proximity
Advantages
Concerns
10
2000s
Development of UB City and proximity to affluent locality
2,000 - 12,000
UB City
Prime Location and an upmarket neighbourhood, pedestrian friendly
Non - availability of public transportation
Rental Values (INR/sqft/month) Ground Floor 200 - 265
11Average Annual Rental Appreciation 6%
Capital Values (INR/sqft) 12
17,500 - 23,000
10Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%
11Average annual rental appreciation figures are considered for the period between 2009 - 2012
12In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
BANGALORE: RETAIL MAKET REPORT 14
INDIRANAGAR 100 FEET ROAD
Figure: High-street Stacking: Indiranagar 100 Feet Road
Indiranagar 100 Feet Road
Apparel & Footwear Personal Care / Watches / Jewellery Food & Beverages
Electronic & White Goods Others Books / Stationery / Gifts
Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time.
Map not to the scale.
15
Indiranagar 100 feet Road constitutes the stretch between
Domlur Junction (Stanley Boutique) and the Old Madras Road
Junction.
During its inception, this area was conceptualized as a
residential area. Post amendment in the zoning regulations
that facilitated development of commercial / retail properties,
this area started witnessing an increase in retail activity
primarily opening of restaurants, cafes and lounges.
Over the years, the high-street has witnessed penetration of
various brands in Apparel and Footwear, Electronic Goods
segment apart from the F&B segment.
As compared to other high-streets of Bangalore, Indiranagar
100 feet Road has a better planned layout, well laid pedestrian
walkways as well as free parking facility.
Areas around 12th Main command higher rents as opposed to
areas around Domlur flyover or near CMH Road. Additionally,
completion of Metro Rail Phase I in this region has improved
connectivity between CMH Road to Domlur Junction.
However, it has adversely impacted the stores between Old
Madras Road and CMH Road by reducing their visibility.
In the coming year rental values across this high-street are
likely to continue the past growth trend.
Figure: Product Category Distribution: Indiranagar 100 feet Road
11%
7%
37%
10%
9%
26%
Apparel & Footwear Food & Beverages
Electronic & White Goods Books / Stationery / Gifts
Others Personal Care / Watches / Jewellery
Indiranagar 100 Feet Road
Operational Since
Driving Factor
Shop Size (sqft)
Existing Shopping Malls in proximity
Advantages
Concerns
13
1990s
Proximity to an affluent residential catchment
1,500 - 12,000
Gopalan Signature Mall (3 km)
Easily Accessible, connectivity via metro, free car-parking and
affluent catchment
Traffic Congestion during peak hours; limited availability of car parks
Rental Values (INR/sqft/month) Ground Floor 175 - 220
Average Annual Rental Appreciation 14
5%
Capital Values (INR/sqft)
15
15,000 - 19,500
13Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80%
14Average annual rental appreciation figures are considered for the period between 2009 - 2012
15In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11%
BANGALORE: RETAIL MAKET REPORT 16
BANGALORE: SHOPPING MALL STATISTICS
Table: Shopping Mall Space Inventory (GLA in million sqft)
*
Micro-market
Total Mall Space
CBD
SBD
North - East
South - East
South - West
North - West
PBD
Whitefield
ORR - Sarjapur
Bannerghatta Road
Kanakpura Road
Mysore Road
Tumkur Road
Bangalore North
Hosur Road
Old Madras Road
Operational Area
Stock Vacancy
7.65 0.50
0.78 0.07
3.19 0.14
0.41 0.06
0.69 0.03
0.40 0.03
1.69 0.02
3.68 0.29
2.53 0.24
0.31 -
0.38 -
- -
0.34 -
- -
0.12 0.05
- -
- -
Under-construction Area
Planned Mall
Space
Stock Vacancy
5.67 3.06 13.79
0.31 0.31 -
1.46 0.79 1.82
0.32 0.20 0.80
0.42 0.02 -
0.72 0.57 0.62
- - 0.40
3.90 1.96 11.97
0.87 0.30 1.58
- - 2.50
- - 0.80
0.45 0.28 2.27
- - 0.45
0.25 0.15 0.30
0.80 0.60 2.45
1.35 0.45 0.80
0.18 0.18 0.82
Figure: Shopping Mall Space Statistics
14 Vestian Estimate
12
10
8
7.65 13.79
6
4 7.15
5.67
2
2.61
0
Operational Under-Construction Planned
Mall Space Mall Space Mall Space
Stock Occupied
*The city has been categorized into three major micro-markets - CBD, SBD and PBD. Please refer Terms of Reference for spatial classification of the city.
17
As of 2012, operational shopping mall space in the city is 7.65 million sqft; projected to double by 2016.
Emergence of Bangalore as a preferred retail destination led to
entry of several national and regional developers. Key
developers including Phoenix Mills Limited, Brigade Group
and Mantri Group continue to expand their retail portfolio in the
city. The city today has more than 20 operational shopping
malls accounting for 7.6516million sqft.
Non-availability of large land parcels in CBD locations and
significant residential activity in PBD locations has led to
increased development of shopping malls along PBD
locations. In terms of Gross Leasable Area (GLA)17, PBD and
SBD account for 48% and 42% respectively of the total
shopping mall space and CBD locations contribute to 10% of
total mall space in the city.
Secondary Business District (SBD) locations over the past few
years have witnessed increased supply of large land parcels
for redevelopment paving the way for development of
shopping malls. Retail activity in this micro-market is expected
to continue the growth trajectory mainly due to growing
catchment area, limited mall space in CBD locations,
availability of large land parcels for development and
enhanced connectivity via Metro Rail phase I. Key malls that
commenced operations in last one year in SBD locations
include Brigade Orion (0.75 million sqft) at Dr. Rajkumar Road
and Mantri Square (0.93 million sqft) at Malleshwaram.
Amongst the PBD locations, established residential location of
ORR - Sarjapur provides opportunity for development of
shopping malls in short term, while Whitefield on the other
hand has witnessed substantial penetration of retail activity.
Locations of Hosur Road, Bannerghatta Road, Kanakpura
Road, Mysore Road andTumkur Road support retail
infrastructure complementing the residential activities. Retail
activity in Bangalore North and Old Madras Road (OMR) is
burgeoning and these micro-markets have high potential for
development of shopping malls in medium to long term.
Whitefield accounts for highest mall space; it constitutes nearly
69% of total mall space in PBD locations. Whitefield over the
years has emerged as a self-sustaining location with
commercial, residential and retail developments. Key
operational malls in this location include Inorbit Mall (0.34
million sqft), Phoenix Market City (0.97 million sqft) and Park
Square Mall (0.45 million sqft). Owing to significant existing
and impending mall space, Whitefield exhibits lesser potential
for development of new malls in short to medium term.
Although ORR-Sarjapur stretch is one of the most promising
residential locations of Bangalore, the location is currently
dependent on SBD locations for its retail needs. Soul Space
Spirit(0.3 million sqft) is the only operational mall in this
location. With no malls under construction, this location is
highly suitable for development of shopping malls in short
term.
Kanakpura Road currently lacks presence of shopping malls,
but has substantial under-construction and planned mall
space. Key shopping malls in advanced stage of planning
include Mantri Arena (0.82 million sqft), and Puravanakara
Mall (0.45 million sqft).
Lack of availability of land for development, restricted land-
use zoning and proximity to SBD locations of Koramangala
and Jayanagar are key reasons that have restricted the
development of malls in Bannerghatta Road. Currently the
location has one operational mall Royal Meenakshi Mall (0.34
million sqft). This location has limited potential for
development of malls mainly due to significant mall supply in
SBD locations.
Mysore Road currently accounts for nearly 0.5 million sqft of
operational mall space. The malls here mainly cater to daily
requirements, lacking entertainment and fine-dining options.
Limited residential activity in this location has restricted
development of malls in this micro-market and has limited
upcoming and planned mall space.
Growth in residential activity over the past few years has led to
increased retail demand along Tumkur Road and this location
is a potential destination for mall activity. Currently, the
location does not have any operational mall, but houses Metro
Cash and Carry Outlet (Cash and Carry format). Vaishnavi
Sapphire (0.25 million sqft) is one of the key malls likely to be
operational by2013 end and BIG Shopping Center is
expected to open their flagship store BIG (0.42 million sqft) in
this location.
Limited residential activities along Hosur Road has restricted
the development of malls in this region. Presently, there are no
operational malls, however, with a few large-scale residential
projects coming up and with the proposed Metro Rail phase II-
this location is set to witness increased retail activity. Neo Mall
(1.35 million sqft) at Patel Neo Town is among the key
upcoming malls in this location.
Old Madras Road, of-late has witnessed increased residential
activity with major Class A developers launching their
residential projects. Currently, not many retail projects are
planned in this micro-market however; retail activity across
this micro-market is anticipated to gain momentum in the
medium to long term. Salapuria Sattva Group is set to launch
the World Market (1.0 million sqft) in this location.
Despite commercial activity in Bangalore North being in
nascent stage, this region has witnessed increased residential
supply. Shift in the developers’ interest towards this location
has made way for many planned retail projects. Key
developers including Brigade Group, MFAR Holdings,
Century Group and Ozone Group have planned shopping
malls in Bangalore North.
16Indicates Gross Leasble Area (GLA); unless and otherwise mentioned in the report mall size is indicated in terms of GLA
17GLA is the total floor area designed for a tenant’s occupancy and exclusive use, including basements, mezzanines, or upper floors measured from the
center-line of joint partitions and from outside wall faces. It is the space, including sales area and integral stock areas for which tenants pay rent.
BANGALORE: RETAIL MAKET REPORT 18
BANGALORE: SHOPPING MALLS
Malls in CBD
Operational Under Construction Planned
1 G Corp 1 MG Road 6 Suraj Cambridge Mall
2 EVA Mall 7 Embassy Galaxy Mall
3 Garuda Mall
4 The Collection
5 Sigma Mall
Malls in SBD
Operational Under Construction Planned
8 Salarpuria Oasis Mall 17 Vega Mall 21 Sobha Grand Mall
9 The Forum 18 City View 22 Karle Mall
10 Swagath Garuda 19 Orion Mall - 2 23 Nitesh Mall
11 Gopalan Innovation Mall 20 World GT Mall
12 Mantri Junction
13 Mantri Square
14 Orion Mall
15 Gopalan Signature Mall
16 Leela Galleria
Malls in PBD
Operational Under Construction Planned
24 Soul Space Arena 35 Grand Mall & Towers 44 Gopalan Destination Mall
25 Phoenix Market City 36 Virtuous Xander Mall 45 Prestige Technostar
26 Inorbit Mall 37 Forum Shantiniketan Mall 46 MBD Zephyr
27 Park Square 38 Salarpuria World Market 47 Mantri Mall, Agara
28 The Forum Value Mall 39 Neo Mall 48 Raheja INXS Mall
29 Cosmos Mall 40 Gardens Galleria 49 Perk In Mall
30 Soul Space Spirit 41 Vaishnavi Sapphire 50 Prestige Falcon City
31 Royal Meenakshi Mall 42 MSR Regallia Elements 51 Mantri Mall, Kanakpura
32 Gopalan Arcade Mall 43 RMZ Galleria 52 Puravankara Mall
33 Gopalan Legacy Mall 53 Lotus Mall
34 Esteem Mall 54 Karle Town Center
55 Monarch Celestial
56 Century Istana High Street
19
Bangalore: Shopping Mall Snapshot
NH 7: To Hyderabad
56
Bangalore International Airport
55
Yelahanka
43
NH 4: To Mumbai
BIEC
HMT
Township
Hesaraghatta
Cross
22
41 RMV
Extension
Peenya Industrial Area 14
18
Malleshwaram
34
Hebbal 42
54
NH 4: To Chennai
Nagawara
38
Palace
13
Rajaji Nagar
20
Grounds
Banaswadi
19Frazer Town
Byppanahalli
5 1
MG Road
6 23
Krishnarajapuram
36
25
37
15 27
45
44 ITPB
46 26
21
Vijayanagar
33
7 Indiranagar
Bangalore City 4 24C.V.Raman
Railway Station Richmond Nagar
Town 3 2
8 16
Brookefield EPIP ZONE
WHITEFIELD
29
35 28
Marathahalli
Varthur
Mysore Road
53
32 Banashankari
Kengeri
SH 17:
To Mysore
12
Puttenahalli
40
51
52
Jayanagar Koramangala
9
10
J.P. Nagar
11
17 BTM Layout
50
31
30
47 Bellandur
48 Sarjapur Road
HSR Layout
Begur
49
Thalagattapura
Gottigere
NH 209: To Coimbatore
ELECTRONIC CITY
PHASE I & II
39Bommasandra
NH 7: To Salem
Outer Ring Road Metro Rail Under Construction Key Residential Areas
NICE Ring Road Proposed Peripheral Ring Road
Metro Rail Operational Elevated Express Highway
BANGALORE: RETAIL MAKET REPORT 20
SHOPPING MALL: CLASSIFICATION
21
Shopping malls in Bangalore can be predominantly categorized as neighbourhood, community and regional malls based on the
anchor tenant, GLA and size of the trade area it serves.
International Council of Shopping Centers (ICSC) defines a
shopping mall as a group of retail establishments that is
planned, developed, owned and managed as a single property
with on-site and basement parking. Shopping mall’s size and
orientation are generally determined by the market
characteristics of the trade area served by the mall.
Shopping malls can be classified based on its tenancy mix and
size of the trade area it serves, not solely on the GLA of the
mall. Adapting from the definition as suggested by Urban Land
Institute(ULI) and ICSC, shopping malls in the city can
essentially be categorized as:
Neighbourhood Mall: Neighbourhood mall focuses on
convenience goods that meet the daily needs of an immediate
neighbourhood. Usually anchored by a super-market,
neighbourhood malls tend to serve a trade area within 2 - 3 km
radius and GLA for these malls range between 100,000 -
300,000 sqft of GLA.
Gopalan Arcade Mall (0.16 million sqft) and Gopalan Legacy
Mall (0.18 million sqft)are prominent neighbourhood malls in
the city. Elements Mall with Auchan hyper-market as one of its
anchor tenant and Vaishnavi Sapphire Mall with More super-
market as its anchor tenant are among the key upcoming
neighbourhood malls.
Community Mall: Community mall while providing daily
necessities also offer a wider range of merchandise, home
furnishings and entertainment options than the neighbourhood
mall.
Forum Mall (0.36 million sqft) at Koramangala, Royal
Meenakshi Mall at Bannerghatta Road (0.38 million sqft) are
among the operational community malls in the city.
Forthcoming Vega City Mall (0.42 million sqft) on Bannerghatta
Road is likely to evolve as a community mall.
Regional Mall: A regional mall offers a wider range in terms of
retail category, entertainment and food. This kind of a retail
development depending on its tenancy mix has a potential to
cater to the trade area ranging from 5 - 15 km.
Brigade Orion at Dr. Rajkumar Road (0.75 million sqft), Mantri
Square at Malleshwaram(0.933 million sqft) and Phoenix Market
City (0.97 million sqft) at Whitefield are categorized as regional
malls. Planned mall by Nitesh Estates at Indiranagar (0.8 million
sqft) and Mantri Mall (1.20 million sqft) at Agara Junction are
likely to be positioned as regional malls by virtue of its size
thereby catering to a larger catchment.
Specialty Mall: A specialty mall employs a unifying theme that is
carried out by the retail stores in their merchandize. These malls
may rely on discretionary income expenditures and provide one-
stop shopping experience for a specific product type or price
segment. These malls could be anchored by an upmarket /
premium Multi-Brand Outlet (MBO) format while fine dinning and
leisure also play a key anchor role.
The Collection - UB City at Vittal Mallya Road can be categorized
as a Specialty mall designed as a Luxury Mall. Upcoming malls
with alike theme in the city include Galaxy (0.19 million sqft) by
Embassy Group at Residency Road and City View by Westcourt
Real Estate (0.06 million sqft) on Bellary Road.
However, specialty malls focusing exclusively on sale of home
and furnishing products, cars and auto-accessories, gold or
electronic and white goods are currently un-explored in the city.
Table below compares the broad indicators to define the shopping
malls.
Table: Basic characteristics of Shopping Malls
Type of Mall
Neighbourhood Mall
Community Mall
Regional Mall
Anchor Tenants
Super-market /
Hyper-market chain
Department Store /
Hyper-market / Multiplex
1 or 2 Department Store /
Multiplex / Entertainment Retailers
GLA (sqft) Trade Area Radius
100,000 - 300,000 2 - 3 km
200,000 - 500,000 3 - 5 km
600,000 - 10,00,000 5 - 15 km
BANGALORE: RETAIL MAKET REPORT 22
SHOPPING MALL: CLASSIFICATION
2
Until the last decade, development of malls was at a nascent stage. However, with the progress of the city’s retail infrastructure
towards a differential phase, Bangalore is expected to see entry of new mall formats including a Strip Mall and a Town Center.
Over the years, shopping malls in the city have continually
invented a variety of additional real estate products to
accommodate advancing trends in retailing. As a result,
shopping malls based on their configuration, can be further
categorized as follows:
Enclosed Mall: These are enclosed malls, with a climate-
controlled walkway between two facing strips of stores.
Most of the malls in the city are enclosed mall with department
stores, super-market or a hyper-market chain, food-court and
fine dining options as well as entertainment retailers.
Open-air malls:
Strip center: A strip center is a single or multi level row of
stores or service outlets managed as a coherent retail entity,
with on-site or basement parking. A strip mall usually designed
on a strip of land is configured in a straight line, or has an "L"
shape depending on the dimensions of the land parcel.
One MG Road (0.18 million sqft) by G-Corp despite being an
enclosed mall has incorporated design elements inherent to a
Strip mall with retail stores facing the street. This mall has been
designed as a combination of open-air / high-street format and
an enclosed mall like format.
Emerging Retail Format: Organized Wholesale Retail
Town Center: A town center is defined as an open-air center
with public space and street front retailing on at least two
pedestrian streets. Town centers are essentially parts of
integrated developments with residential, office and civic uses
along with retail component thereby creating an ambience of
dowtown.
Proposed shopping mall by Karle Properties - Karle Town
Center (1.4 million sqft) is expected to be a community mall
designed as a Town Center having a combination of open-air /
high-street and an enclosed mall like format.
Before economic liberalization, wholesale markets in the city were restricted to the “petta” regions. Areas of
Chikpet, Ballepet, Akkipet , Cubbonpet - continued to cater to the wholesale retail demands of the city ranging
from grocery to stationery items to textiles.
In 1997, with Government of India (GoI) permitting 100% FDI in Cash and Carry formats, the city witnessed entry
of major cash and carry players in the organized retail sector and prominent retailers like Metro Cash and Carry
and Decathlon set-up their stores in the city.
Going forward, the wholesale market in Bangalore is expected to witness entry of many international players
such as Best Price by Bharti Walmart, Carrefour and expansion of existing players including Metro Cash and
Carry and Decathlon. Salarpuria Sattva in collaboration with Future Group is set to launch a World Market (1.0
million sqft) on Old Madras Road in PBD.
BANGALORE: RETAIL MAKET REPORT 24
SHOPPING MALL: PRODUCT CATEGORY DISTRIBUTION
25
Malls in the city are largely anchored around an Apparel and Footwear brand and / or a Hyper-market chain. Entertainment and
Food & Beverage (F&B) retailers are also among the predominant anchors in shopping malls.
In community malls anchor tenants usually occupy 40 - 50% of
the total mall space and for a regional mall it ranges between
50% and 55%.
Department Stores or Apparel and Footwear brands are one of
the prominent anchors in shopping malls. Other significant
anchor tenants include multiplexes closely followed by hyper-
market chains like Star Bazaar, Hypercity, Big Bazaar, Spar
and restaurants. Restaurants / food-courts also attract sizeable
consumers to malls.
Figure: Product Category Distribution: Anchor Stores
5%
Till recent past, entertainment in the retail malls was confined to
Multiplexes; however, today it is growing to a status of an
important anchor. Brigade Orion at Rajajinagar and Park
Square in Whitefield have roped in various gaming retailers-
the likes of Blu O, Amoeba and Time Zone apart from eminent
multiplexes.
Vanilla stores across the malls in the city are dominated by
Apparel and Footwear retailers followed by Food and
Beverage (F&B) tenants. Other categories like electronic
goods, home furnishings books & stationery items are also
among the noticeable retailers occupying vanilla stores.
Figure: Product Category Distribution: Vanilla Stores
5%
4%
19%
16%
Apparels & Footwear
Food & Beverages
Multiplex
Luxury Malls
40%
16%
Home & Life Style
Hyper market / Super market
Others
4%
20%
55%
9%
7%
Fashion & Apparel Personal Care / Watches / Jewellery
Food & Beverages Books / Stationery / Gifts
Electronic & Whitegoods Others
As per AT Kearney, the Indian luxury market is growing at 20% a year and is expected to grow to USD 14.7 billion by
2015 from USD 5.8 billion today. In addition, 100% FDI in single brand retail is expected to facilitate entry of
international retailers in the city.
Owing to a healthy economic growth, the city has witnessed an increase in population of High-Net Worth
Individuals (HNI) and Super rich. The city accounts for the third largest population of HNIs after Mumbai and Delhi.
Luxury retail in Bangalore is confined to high-street of Lavelle Road and five-star hotels. UB City at Lavelle Road
and Leela Galleria at Leela Palace are amongst the key operational luxury malls in the city. UB City has become a
preferred destination for luxury brands mainly due to availability of necessary infrastructure and brand visibility that
it offers. Key luxury brands operational in the city include Burberry, Jimmy Choo, Louis Vuitton, Canali,
BottegaVeneta, Tag Heuer, Paul Smith and Tumi.
Upcoming malls in this category is Embassy Group’s shopping mall at Residency Road.
Prevailing luxury mall rentals range between INR 350 and 420 per sqft per month for UB City and between INR 150
and 250 per sqft per month for Leela Galleria.
BANGALORE: RETAIL MAKET REPORT 26
SHOPPING MALL: RENTALS
27
Shopping mall in SBD offer an advantage as compared to malls in CBD owing to high ATD, substantial footfalls, better mall
infrastructure and lesser rentals.
Shopping mall rentals mainly depend on the location of the mall
and the size and location of the store in the mall.
Total occupancy cost for a retail outlet includes both rent as well
18
Post 2009, shopping mall rentals across CBD witnessed no
major change due to increased mall space supply in the SBD
locations. Malls rentals in SBD locations witnessed marginal
appreciation in rental values in the range of 10 - 12% during
2009 - 12.as the Common Area Maintenance (CAM) charges . CAM
charges across malls in Bangalore range between INR 20 - 26
per sqft per month on Super built-up area.
19
Annual ATD on Useable Carpet Area (UCA) across SBD malls
range from INR 8,000 to 16,000 higher than the ATD for CBD
malls, which ranges from INR 5,000 to 9,000 . Higher ATD in
SBD is attributed to growing catchment area and availability of
better mall infrastructure as against CBD. Comparable rentals
and higher ATD offer an advantage to shopping malls in SBD
locations when compared to CBD locations.
Of the SBD locations, Forum Mall at Koramangala charges a
higher rent of INR 420 - 450 per sqft mainly due to higher foot
falls and higher ATD. The Forum not only attracts the highest
foot falls but also accounts for the highest ATD of nearly INR
16,000 per year per UCA20
Table: Prevailing Mall Rentals
Rentals
Amongst the PBD locations, mall rentals in Bannerghatta Road
increased by 8 - 10%, but were insignificant in Whitefield and
Mysore Road.
Shopping mall rentals across CBD locations of Bangalore to
witness nominal growth in the short term mostly due to
increased mall space supply and better infrastructure in SBD
locations.
Rentals across SBD locations are expected to sustain this
growth trend within the next three years, owing to minimal
prevailing vacancy rates and moderate pre-commitments.
High impending mall space supply in PBD locations likely to
contain the rental values at current levels for the next 1 year.
Table: Average Trading Density (INR/year/UCA)
(INR/sqft/month)
Anchor Tenants
Multiplex
Vanilla Tenants 21
Ground Floor
First Floor
Other Floors
CBD SBD PBD
55 - 90 45 - 75 35 - 50
50 - 70 45 - 60 40 - 50
185 - 400 220 - 450 120 - 200
150 - 350 180 - 325 80 - 175
120 - 300 150 - 275 65 - 150
Based on Micro-market
CBD 7,800
SBD 9,800
PBD 6,300
18Please refer annexure for the scope of work covered under Common Area Maintenance
19Source: Vestian Research
20Source: Vestian Research
21Rental Values indicated are on carpet area for a 1,000 sqft vanilla store with an efficiency of 65%
BANGALORE: RETAIL MAKET REPORT 28
OUTLOOK
By 2015, Bangalore is expected to witness an addition of nearly
5.60 million sqft; PBD locations account for nearly 70% of this
upcoming supply.
The attractive micro market for development of a shopping
mall in short term is ORR - Sarjapur due to the lack of existing and
under-construction mall space. Meanwhile Bangalore North and
Old Madras Road have potential for development of malls in
medium to long term.
Owing to significant existing and impending mall space, Whitefield
does not have potential for development of new malls in short to
medium term.
Shift in the developers’ interest towards Bangalore North has made
way for many planned retail projects in this micro-market.
Consequently, this is a potential choice for mall activity in the
coming 3 - 5 years.
Retail activity in Old Madras Road is expected to gain momentum
in medium to long term, mainly due to increase in residential
supply, improved connectivity and economic development towards
Hoskote Industrial Area.
As against the last decade wherein development of malls was still
in a nascent stage, the city is currently witnessing a differentiation
phase with the development of newer formats of malls and retail
infrastructure. Previously malls in the city were primarily
community malls. However, entry of national developers and
availability of larger land parcels have led to the development of
regional malls in the city.
Malls in the city are largely anchored around an Apparel and
Footwear brand, F&B, entertainment and / or a hyper-market
chain. Till the recent past, entertainment in the retail malls was
confined to multiplexes however; going forward other forms of
entertainment are going to be an important part of the anchor.
With significant luxury brands planning to foray in to the city’s
market, demand for luxury malls is likely to remain strong.
Despite increasing mall space in the city, key high-street locations
of the city shall continue to attract retailers mainly due to better
brand visibility, optimum catchment area reach and convenience of
access.
In light of 51% FDI allowance for multi—brand retail by
Government of Karnataka - the demand for retail space in the city is
expected to strengthen in the coming years. Prevailing low
vacancy rates, high footfalls and strong economic outlook are likely
to positively impact the rental values across both shopping malls
and high street locations.
29
TERMS OF REFERENCE
CLASSIFICATION of the city: To understand the characteristics of the retail spaces across Bangalore, the city has been sub-divided
spatially in to three major zones:
Micro-markets
Central Business District (CBD)
Secondary Business District (SBD)
North East
South East
South West
North West
Peripheral Business District (PBD)
Areas covered within the micro-markets
M.G. Road, Brigade Road, Magrath Road, Richmond Road, Lavelle Road, Cunningham Road,
Langford Town, Brunton Road and Residency Road
SBD locations based on the geographic boundaries have been further categorized in to four
quadrants:
Indirangar, CMH Road, Old Madras Road (till K.R.Puram Bridge), Banaswadi, Bellary Road (till ORR)
Koramangala, few locations of Bannerghatta Road and Hosur Road (till Silk Board Junction)
Kanakpura Road (till ORR), Jayanagar, JP Nagar, Vijaynagar and few locations of Rajajinagar
Sadashiv Nagar, New BEL Road, Sanjay Nagar, Malleswaram and few locations of Rajajinagar and
Yeshwanthpur
Peripheral locations of Whitefield, ORR - Sarjapur, Electronics City and Hosur Road, Bannerghatta
Road, Kanakpura Road, Mysore Road, Old Madras Road, Tumkur Road and Bangalore North
31
TERMS OF REFERENCE
Definitions
High-Street
Shopping Malls
Areas covered within the micro-markets
A high-street refers to the retail street in a city with street lined retail stores.
A shopping mall is a group of retail establishments that is planned, developed, owned and managed
as a single property with on-site and basement parking
Tenant Category in Shopping Malls
Anchor Tenant
Vanilla Store
Unit of Measurement
Gross Leaseable Area (GLA)
Useable Carpet Area (UCA)
Common Area
Useable Carpet Area (UCA)
The major chain/s or department store/s in a shopping mall positioned to produce traffic for smaller
stores in the facility
Smaller format retail stores in a mall are call
Retail spaces are measured on the following three bases:
GLA is the total floor are designed for a tenant’s occupancy and exclusive use, including basements,
mezzanines or upper floors measured from the centerline of joint partitions and from outside wall
faces. It is generally expressed in square feet (sqft) and rents for shopping malls is payable on the
GLA.
Useable carpet area or the carpet area is the total area of the premises measured from internal walls
Common Area include usable consumer horizontal and vertical circulation areas. In some cases a portion
of landscaped / outdoor piazza would also constitute to common areas.
Loading Factor is the ratio of Loss Factor and UCA. Loading factor across shopping malls in
Bangalore for,
 Anchor tenants varies between 20% and 30%
 Vanilla stores vary between 50% and 60%.
 High-street locations ranges between 15% and 25%.
BANGALORE: RETAIL MAKET REPORT 32
TERMS OF REFERENCE
Operating Costs
Tenants follow the following rental models:
Rent
Maintenance Charges
Utilities
Insurance
Car Parking
Stamp Duty
Registration Charges
Lease Terms
Lease Period
Security Deposit
Hours of Operation
Rent Escalation
 Fixed rental with annual escalation
 Revenue Sharing Model which involves a fixed component (Minimum Guarantee) and a
variable component which is based on a percentage earned on the retailer’s sale.
Maintenance of the common areas namely upkeep of the corridors, Annual Maintenance Contracts
(AMC) for all the equipment provided by the developer is under the purview of the developer or the
landlord; however expenses towards the same are borne by the tenant and is payable on the GLA.
For both high-street and malls, the tenant is accountable for the payment of electricity, water and
telecommunications within their premises which is charged at actuals.
Insurance for the building / mall is under the purview of the developer or the landlord.
As per market practice, shopping malls across Bangalore offer minimum 1 car park for every 750
sqft leased; charges for which are included in the rent. Any additional car parks required by the
tenant over and above this attracts an additional charge.
Stamp Duty for the premises shall be borne by the tenant. Based on the tenure of the lease Stamp
Duty is applicable as follows:
0 - 10 years : 1% on annualized Average rentals of total lease tenure and Security Deposit
10 - 20 years : 2% on annualized Average rentals of total lease tenure and Security Deposit
Registration charge for the premises shall also be borne by the tenant. Based on the tenure of the
lease registration charges are applicable as follows:
0 - 10 years : 0.5% on annualized Average rentals of total lease tenure and security deposit
10 - 20 years : 0.5% on annualized Average rentals of total lease tenure and security deposit
Typically lease period is as follows
 15 - 21 years for Anchor stores
 6 - 9 years for Vanilla stores
As a market practice, the landlord / developer charges an equivalent of 6 - 8 months rent as interest
free security deposit.
For both high-street and malls, maintenance charges are computed considering the hours of
operations to be in the range of 10 - 12 hours
As per the current practice, rental values for malls or high-streets are escalated by 5% every year
or by 15% every three years
33
GLOSSARY
IT Information Technology
ITeS Information Technology enabled Services
INR Indian Rupee
BCC Bangalore City Corporation
CITB City Improvement Trust Board
BDA Bangalore Development Authority
FDI Foreign Direct Investment
BIAL Bangalore International Airport Limited
GLA Gross Leasable Area
ORR Outer Ring Road
MBO Multi-Brand Outlet
GDP Gross Domestic Product
HNI High Net Worth Individual
UCA Usable Carpet Area
ATD Average Trading Density
34
CBD Central Business District
SBD Secondary Business District
PBD Peripheral Business District
Bangalore Retail Market

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Bangalore Retail Market

  • 1. Bangalore: Retail Market Report BY SAYAN DAS BY SAYAN DAS
  • 2. BANGALORE RETAIL MARKET STATISTICS: 2013 AND BEYOND 7.65 million sqft of operational shopping mall space of which 7% is vacant 12% 5% to is the avg. annual growth rate of mall rentals since 2010 5.67 million sqft of under-construction mall space of which 45% is pre-booked 9% 5% to is the avg. annual growth rate of high-street rentals since 2009 13.79 million sqft of planned mall space 16K 3K to is the Annual Avg. Trading Density per Useable Carpet Area for shopping malls 1
  • 3. EXECUTIVE SUMMARY In past years, Bangalore’s retail journey has been booming with several international & national brands setting-up their stores in the city. Favourable demographics, robust economy, rising per capita income, easy availability of credit & large scale retail developments have fueled the growth of Bangalore’s retail market. Bangalore today houses large format retail malls catering to the luxury segment as well as value shoppers. The city is a prefered retail destination in the country after Mumbai and Calcutta. As of 2012, total operational mall space in the city is added to be 7.65 million sq.ft and the vacancy is 7%. Significant residential activity & availability of land fuelled the development of shopping malls in SBD & PBD locations of the city. In terms of GLA, PBD and SBD respectively account for 48% and 42% of the total shopping mall space while CBD locations occupies 10% of the total mall space in the city. Bangalore in present houses neighbourhood, community and regional malls. Mantri Mall at Malleshwaram, Phoenix Mall at Whitefield & Orion Mall at Dr. Rajkumar Road are key regional malls while The Forum at Koramangala & Meenakshi Mall at Bannerghatta Road are prominent malls in the city. Among the PBD locations, residential micro-market of ORR - Sarjapur has an opportunity for development of shopping malls. Whitefield on the other hand has substantial operational mall space and accounts for large percentage of total operational space Amongst PBD . Location of Mysore Rd, Bannerghatta Rd, Tumkur Rd & Hosur Road are in balanced state with retail activity in these locations complementing the residential activities. Retail activities across Bangalore North and Old Madras Road (OMR) are booming and have retail infrastructure development potential in the upcoming years. BANGALORE: RETAIL MAKET REPORT 2 Malls across the city are essentially anchored around a department store & / or a hyper-market or super-market chain. Few years ago, entertainment in the shopping malls was limited to multiplexes however; entertainment is now growing to a status of being an important anchor. Brigade Orion at Rajajinagar and Park Square in Whitefield along with multiplexes have roped in various gaming retailers. Wholesale retails is one of the emerging formats in Bangalore. Conducive Government regulation have led to the entry of many such players in the city and several new brands are progressively venturing into the city’s retail market. Future Group with Salarpuria Sattva Group is set to launch first of its kind wholesale market - World Market on Old Madras Road in the city. Luxury retail has come as a new concept here at the establishment of UB City at Vittal Mallya Rd. This segment has witnessed slow but steady growth. However, the presence of luxury retail is expected to be restricted to the CBD & SBD locations. Shopping mall formats in the city continue to develope over time. One MG Road, in CBD is designed as an enclosed strip mall and lately Karle Properties is planning to develop a Town Center, which is a combination of open-air / high-street and an enclosed mall format. Rental values in shopping malls in the city are expected to witness a steady growth within 1 - 3 years, owing primarily to a steady increase in the metropolitan population and relaxation of FDI rules. High-street locations will carry on to coexist with the malls in the city despite infrastructure issues and increase in mall space. Rental values across high-street locations are likely to witness nominal growth in short term.
  • 4. HISTORY OF RETAIL DEVELOPMENT IN BANGALORE Before 1949 Bangalore had two distinct administrative bodies: Bangalore City Municipality (BCM) & Bangalore City Military Station Municipality (BCMSM) 1950 - 1970  Formation of Bangalore City Corporation (BCC) Retail developments in the city were mainly spread across two prominent clusters : Akkipet, Ballepet, Chickpet, Cubbonpet, Avenue Road and other markets in petta region catered to the retail needs of people in old Bangalore Shivajinagar, MG Road, Commercial Street and Ulsoor were key retail destinations serving the Cantonment area  Areas around Brigade Road gained prominence as key destinations for entertainment mainly due to presence of Opera House. Various theatres by integration of BCM and BCMSM 1970 - 1990 Formation of Bangalore Development Authority  in 1976 led to development of new residential layouts namely Jayanagar, HSR Layout and BTM Layout namely Galaxy, Blue Moon, Rex and Plaza theatre commenced operations during this time. BDA developed neighbourhood shopping centres (BDA complexes) with retail shops to cater to the daily needs of residents within the layout. Jayanagar BDA complex was the first BDA complex to commence operations in 1978, followed by Indiranagar and Koramangala BDA Complexes. 3
  • 5. 1990 - 2005 Economic Liberalization in 1991 In 1997, Government of India (GoI) permitted 100% FDI in wholesale cash and carry retail format 2006 - 2012 Government of India (GoI) allows 51% FDI in  single brand retail in 2006 Completion of Bangalore  International Airport at Devanahalli in 2008 led  to opening up of land parcels for development towards Bangalore North 2013 & Beyond In 2012, Government of India (GoI) allows 100% and 51% FDI in single and multi- brand retail respectively Economic Liberalization in 1991 led to entry of various international brands in the city. Nike, Reebok, Adidas and KFC set-up their stores along high-street of Brigade Road and Commercial Street. Brigade Road started transforming in to a retail high street of the city; Mota Royal Arcade and 5th Avenue were among the first few modern format retail shopping centres to commence operations during this period In 2003, Metro Cash and Carry opened its stores at Yeshwantpur and Kanakpura Road Bangalore’s first mall - The Forum Mall at Koramanagala was operational in 2004 . Emergence of Indiranagar 100 Feet Road as a preferred high-street location within SBD. Increase in demand for mall space led to development of newer malls primarily in CBD and SBD locations. Garuda Mall and Sigma Mall were among the prominent malls to commence operations during 2006 - 07 UB City at Lavelle Road became Bangalore's first luxury shopping mall to start operations in 2008. With completion of UB City, Lavelle Road graduated to become a luxury high-street location in the city In 2009, Bangalore witnessed completion of Forum Value Mall at Whitefield, the city's first value format mall Development of regional malls - Phoenix Market City at Whitefield, Mantri Square at Malleshwaram and Brigade Orion at Dr. Rajkumar Road started operations between 2009 - 11 FDI in retail paves way for entry of international retailers and funds City expected to witness entry of major brands like Carrefour, Walmart, IKEA BANGALORE: RETAIL MAKET REPORT 4
  • 6. GROWTH OF RETAIL SECTOR IN BANGALORE 5
  • 7. In the past few years, Bangalore’s retail journey has been growing with several international and national brands setting-up their retail stores in the city. Favorable demographics, robust economy, rising per capita income, easy availability of credit and large scale retail developments have fueled the growth of Bangalore’s retail market. Growth in the IT/ITeS industry has led to migration of the educated middle-class to the city, consequently steering residential developments as well. Bangalore’s residential market witnessed an annual absorption of24,000 residential units during calendar year2012 and the residential market is projected to grow at an annual growth rate of 15%, making the city one of the most promising residential markets in the country. Growing Population At 9.6 million, Bangalore urban district is the fifth most populous urban district in India as of 2011. It registered a decadal growth rate of 47% as compared to 2001. The city is expected to continue its growth trajectory; and population for the year 2021 is pegged at 14.0 million. Robust Economy and Growing Per-capita Income: Bangalore’s economic development is attributed to the healthy growth of its IT/ITeS industry. Currently the sector accounts for more than 1.0 million jobs in the city and will continue to add over 100,000 jobs every year for next 3 - 5 years. Apart from IT/ITeS sector, the city is also witnessing advancements in the field of biotechnology, aerospace and aviation sectors. Robust economy, growing population and high disposable incomes have led to emergence of the city as a preferred retail destination by both national and international brands and over the years, retail spaces in the city have witnessed an evolution in terms of design and quantum of spaces. Bangalore today is the most sought after retail destination in the country after Mumbai and Delhi mainly due to the following reasons: The growth in the IT/ITeS sector has been well supported by the growth in the per-capita income of the city. As per 1 McKinsey , by 2030 Bangalore is likely to have the highest per-capita GDP among all the Indian cities. Shift from necessities to lifestyle products: Retail growth in the city is linked to consumer needs and behavior. Rising income levels and global exposure have resulted in increased purchasing power. Additionally, consumer spends have shifted to lifestyle products and services from daily necessities. 1McKinsey - McKinsey Global Institute - India's Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth, published in April 2010. BANGALORE: RETAIL MAKET REPORT 6
  • 8. BANGALORE HIGH STREETS Figure: Key High-Street locations of Bangalore Byappanahalli M G Road 1 M G Road U B City Bangalore Club Existing Malls Key high-street locations Metro Station Metro Rail Phase I - Reach 1 (Operational) Metro Rail Phase I - UG2 (Under-Construction) Garuda Mall 7
  • 9. The high-street locations of Bangalore have captured the retail trends and over the years have adapted to changing retail needs and consumer aspirations. Despite offering better brand visibility as against a shopping mall, key challenges faced by these locations include traffic congestion, lack of parking space and unobstructed pedestrian walkways. A high-street synonymous with a market or bazaar is a prime retail hub in a city with street aligned retail stores. These are predominant avenues for retail, trading and entertainment activities. Early high-street locations of Brigade Road and Commercial Street have been in existence since 1950s are located in close proximity to the CBD. With the spatial expansion of the city, the high-street locations are no longer confined to the CBD area. During the last decade prominent high street locations of Indiranagar 100 feet Road, Jayanagar 11th Main Road, New BEL Road and Marathahalli have emerged towards the Secondary Business Districts (SBD) and Peripheral Business Districts (PBD). The high-streets of the city exhibit distinct characteristics and cater to a diverse target segment. Brigade Road and Commercial Street continue to remain the most sought after high-street locations in the city; Lavelle Road2attracts High Networth Individuals (HNIs) and super rich of the city, offering niche and exclusive products. Marathahalli over the years has developed as a location for discount / outlet stores, whereas, New BEL Road has emerged as an important high-street location catering to residential areas of Sanjaynagar, Sadashivnagar and Rajajinagar. Of the SBD locations, Indiranagar 100 feet Road has evolved from an upmarket plush residential location to one of the most preferred retail destinations by both national and international brands. High-street locations of Jayanagar and Malleshwaram continue to interest retailers in the women’s apparel, gems and jewelry segment. Key areas witnessing increased retail activities in Bangalore North include Kamanahalli Main Road and Sahakarnagar while Marenahalli Road (JP Nagar - ORR stretch) towards south- west of the city is gaining prominence as a retail high-street mainly due to limited shopping mall space in the vicinity. During 2009 - 12, rental values across high-street locations of the city grew annually in the range of 5 - 9%mainly due to limited upcoming supply and lower vacancy rates. 2Lavelle Road includes areas of Lavelle Road and Vittal Mallya Road Bangalore’s high-street locations continue to attract national and international retail brands regardless of increased mall space in the city due to higher brand visibility and considerable footfalls. However, traffic congestion, lack of unobstructed pedestrian walkways and limited parking facilities are some of the basic concerns that require improvement. When profiling of tenants3in select high-street locations of the city- a key observation was high-street locations are preferred mainly by Apparel and Footwear Tenants followed by Food and Beverages(F&B), and Electronic Goods, reason being consumer buying trends and real estate cost. Characteristics of four prominent high-street locations in the city - two established high-streets and two having evolved in the last of couple of years have been addressed in the study. Figure: Product Category Distribution: High-Streets 7% 3% 9% 4% 54% 7% 16% Apparel & Footwear Food & Beverages Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Automobiles 3Profiling of tenants is based on the number of stores and area of the stores has not been considered for the same. BANGALORE: RETAIL MAKET REPORT 8
  • 10. BRIGADE ROAD Figure: High-street Stacking: Brigade Road Brigade Road Apparel & Footwear Food & Beverages Books / Stationery / Gifts Electronic & White Goods Others Personal Care / Watches / Jewellery Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time. Map not to the scale. 9
  • 11. Brigade Road forms the stretch between Cauvery Store on M.G. Road and Opera House abutting Residency Road. One of the most prominent high-street locations of Bangalore, Brigade Road has been in existence since the British era. During 1970 - 80s, this high-street gained prominence as an entertainment hub of the city with existence of theatres namely Opera House and Rex. This high-street also boasts of first few shopping complexes in the city; Mota Royal Arcade and Fifth Avenue are operational since early 1990s. Presence of shopping complexes strengthened Brigade Road as a high-street location and over the years this location has emerged as the most preferred location for any new brands venturing into city. The high-street houses flagship stores of various retail brands and is dominated largely by Apparel and Footwear brands. This high-street in coming years will continue to attract retailers owing to improved connectivity with the completion of Metro Rail Phase I. This is certain to boost footfalls across this location. Due to limited availability of new supply and low vacancy rates, rental values across this high-street location are expected to increase nominally in short to medium term. Figure: Product Category Distribution: Brigade Road 6% 9% 7% 53% 7% 18% Apparel & Footwear Food & Beverages Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Brigade Road Operational Since Driving Factor Shop Size (sqft) Existing Shopping Malls in proximity Advantages Concerns Rental Values4(INR/sqft/month) Ground Floor Average Annual Rental Appreciation 5 6 1980s Location; proximity to MG Road; one of the early high-street locations 1,000 - 10,000 Garuda Mall (0.5 km), 1 MG Road (2 km) Prime location, easily accessible, connectivity via Metro Rail Limited parking space, one - way traffic allowed, no public transport along the high-street 350 - 450 9% Capital Values (INR/sqft) 30,000 - 40,000 4Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80% 5Average annual rental appreciation figures are considered for the period between 2009 - 2012 6In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11% BANGALORE: RETAIL MAKET REPORT 10
  • 12. COMMERCIAL STREET Figure: High-street Stacking: Commercial Street Subanjali Silks Reliance Trends Commercial Street Levis Metro Ice creams Catwalk Davanam Apparel & Footwear Food & Beverages Electronic & White Goods Others Reid & TaylorBooks / Stationery / Gifts Manyavar Personal Care / Watches / Jewellery Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time. Map not to the scale. 11
  • 13. Commercial Street emerged as a prominent retail street serving the then Cantonment area mainly because of its proximity to Shivaji Nagar. Earlier, this high-street was essentially a traditional market characterized by small format retail stores. Commercial Street now accommodates contemporary brands and modern format retail stores while simultaneously retaining its character and the traditional bazaar feel. This high-street endures sizeable retail stores mainly targeting women’s apparel and accessories segment. There are no operational or planned malls in this high-street; existing department stores along this high-street include Westside and Max. Key challenges faced by this high-street is lack of availability of parking slots leading to congestion during peak shopping hours and weekends. Rental values across this high-street location are likely to continue to the existing growth trend mainly due to lack of newer retail spaces and lower vacancy rates. Figure: Product Category Distribution: Commercial Street 6% 5% 6% 2% 7% 74% Apparel & Footwear Food & Beverages Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Commercial Street Operational Since Driving Factor Shop Size (sqft) Existing Shopping Malls in proximity Advantages Concerns Rental Values7(INR/sqft/month) Average Annual Rental Appreciation 9 Capital Values (INR/sqft) 1950s Proximity to established markets - Shivajinagar and Russel Market 500 - 30,000 Garuda Mall (2.5 km), 1 MG Road (2.0 km) Prime location, easily accessible Smaller format retail stores, limited parking space, congested during peak hours and no entertainment options Ground Floor 300 - 325 8 9% 26,000 - 28,000 7Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80% 8Average annual rental appreciation figures are considered for the period between 2009 - 2012 9In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11% BANGALORE: RETAIL MAKET REPORT 12
  • 14. LAVELLE ROAD AND VITTAL MALLYA ROAD Figure: High-street Stacking: Lavelle Road and Vittal Mallya Road Reward Dolphin Kidswear Scent Cinebells Le Creuset Galleria Time & Space I art Harley Davidson Showroom Kaya Skin Clinic Vittal Mallya Road Chemistry Crisp Oryza Spa Hakims Aalim Java City Cloud Bar The Biere Club Cinnamon Limelight La Cristaal Sunny’s Ruosh, Bounce Walton Road UB City N S Jewellers Café Coffee Day,Forest Essential Biguine Paris Saloon & Spa Ferns N Petal Porsche Showroom Honda Showroom Apparel & Footwear Food & Beverages Maruti Suzuki Showroom Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Automobiles Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time. Map not to the scale. 13
  • 15. Lavelle Road high-street encompasses areas of Vittal Mallya Road, Lavelle Road and Walton Road. Once an upmarket, plush residential area, Lavelle Road currently has established itself as a luxury high-street of Bangalore. In early 2000s, this high-street had a few exclusive restaurants and lounges. Completion of UB City in 2008 and proximity to affluent neighbourhood triggered the development of luxury retail spaces along this high-street location. An upmarket retail high-street, it is marked by the presence of signature stores of various luxury apparel brands and luxury spas & salons. Additionally it is also witnessing the opening up of luxury automobile showrooms namely BMW Cars, Porsche and Harley Davidson. Key under-construction retail buildings in this high-street include Bagmane Ventures (0.02 million sqft). Lavelle Road will continue to remain a luxury destination of the city with various luxury brands eyeing to enter Bangalore. Rentals across this high-street are likely to retain the past growth trend in short term. Figure: Product Category Distribution: Lavelle Road and Vittal Mallya Road 9% 9% 33% 3% 18% 3% 25% Apparel & Footwear Food & Beverages Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Automobiles Lavelle Road and Vittal Mallya Road Operational Since Driving Factor Shop Size (sqft) Existing Shopping Malls in proximity Advantages Concerns 10 2000s Development of UB City and proximity to affluent locality 2,000 - 12,000 UB City Prime Location and an upmarket neighbourhood, pedestrian friendly Non - availability of public transportation Rental Values (INR/sqft/month) Ground Floor 200 - 265 11Average Annual Rental Appreciation 6% Capital Values (INR/sqft) 12 17,500 - 23,000 10Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80% 11Average annual rental appreciation figures are considered for the period between 2009 - 2012 12In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11% BANGALORE: RETAIL MAKET REPORT 14
  • 16. INDIRANAGAR 100 FEET ROAD Figure: High-street Stacking: Indiranagar 100 Feet Road Indiranagar 100 Feet Road Apparel & Footwear Personal Care / Watches / Jewellery Food & Beverages Electronic & White Goods Others Books / Stationery / Gifts Note: High-street stacking map indicated above represents the brand layout as of December 2012 and is subject to change with time. Map not to the scale. 15
  • 17. Indiranagar 100 feet Road constitutes the stretch between Domlur Junction (Stanley Boutique) and the Old Madras Road Junction. During its inception, this area was conceptualized as a residential area. Post amendment in the zoning regulations that facilitated development of commercial / retail properties, this area started witnessing an increase in retail activity primarily opening of restaurants, cafes and lounges. Over the years, the high-street has witnessed penetration of various brands in Apparel and Footwear, Electronic Goods segment apart from the F&B segment. As compared to other high-streets of Bangalore, Indiranagar 100 feet Road has a better planned layout, well laid pedestrian walkways as well as free parking facility. Areas around 12th Main command higher rents as opposed to areas around Domlur flyover or near CMH Road. Additionally, completion of Metro Rail Phase I in this region has improved connectivity between CMH Road to Domlur Junction. However, it has adversely impacted the stores between Old Madras Road and CMH Road by reducing their visibility. In the coming year rental values across this high-street are likely to continue the past growth trend. Figure: Product Category Distribution: Indiranagar 100 feet Road 11% 7% 37% 10% 9% 26% Apparel & Footwear Food & Beverages Electronic & White Goods Books / Stationery / Gifts Others Personal Care / Watches / Jewellery Indiranagar 100 Feet Road Operational Since Driving Factor Shop Size (sqft) Existing Shopping Malls in proximity Advantages Concerns 13 1990s Proximity to an affluent residential catchment 1,500 - 12,000 Gopalan Signature Mall (3 km) Easily Accessible, connectivity via metro, free car-parking and affluent catchment Traffic Congestion during peak hours; limited availability of car parks Rental Values (INR/sqft/month) Ground Floor 175 - 220 Average Annual Rental Appreciation 14 5% Capital Values (INR/sqft) 15 15,000 - 19,500 13Rental Values indicated are on carpet area for a 1,000 sqft store on Ground Floor with an efficiency of 80% 14Average annual rental appreciation figures are considered for the period between 2009 - 2012 15In the event of non-availability of sale transactions Capital Values have been derived considering average annual rent and yield rate of 11% BANGALORE: RETAIL MAKET REPORT 16
  • 18. BANGALORE: SHOPPING MALL STATISTICS Table: Shopping Mall Space Inventory (GLA in million sqft) * Micro-market Total Mall Space CBD SBD North - East South - East South - West North - West PBD Whitefield ORR - Sarjapur Bannerghatta Road Kanakpura Road Mysore Road Tumkur Road Bangalore North Hosur Road Old Madras Road Operational Area Stock Vacancy 7.65 0.50 0.78 0.07 3.19 0.14 0.41 0.06 0.69 0.03 0.40 0.03 1.69 0.02 3.68 0.29 2.53 0.24 0.31 - 0.38 - - - 0.34 - - - 0.12 0.05 - - - - Under-construction Area Planned Mall Space Stock Vacancy 5.67 3.06 13.79 0.31 0.31 - 1.46 0.79 1.82 0.32 0.20 0.80 0.42 0.02 - 0.72 0.57 0.62 - - 0.40 3.90 1.96 11.97 0.87 0.30 1.58 - - 2.50 - - 0.80 0.45 0.28 2.27 - - 0.45 0.25 0.15 0.30 0.80 0.60 2.45 1.35 0.45 0.80 0.18 0.18 0.82 Figure: Shopping Mall Space Statistics 14 Vestian Estimate 12 10 8 7.65 13.79 6 4 7.15 5.67 2 2.61 0 Operational Under-Construction Planned Mall Space Mall Space Mall Space Stock Occupied *The city has been categorized into three major micro-markets - CBD, SBD and PBD. Please refer Terms of Reference for spatial classification of the city. 17
  • 19. As of 2012, operational shopping mall space in the city is 7.65 million sqft; projected to double by 2016. Emergence of Bangalore as a preferred retail destination led to entry of several national and regional developers. Key developers including Phoenix Mills Limited, Brigade Group and Mantri Group continue to expand their retail portfolio in the city. The city today has more than 20 operational shopping malls accounting for 7.6516million sqft. Non-availability of large land parcels in CBD locations and significant residential activity in PBD locations has led to increased development of shopping malls along PBD locations. In terms of Gross Leasable Area (GLA)17, PBD and SBD account for 48% and 42% respectively of the total shopping mall space and CBD locations contribute to 10% of total mall space in the city. Secondary Business District (SBD) locations over the past few years have witnessed increased supply of large land parcels for redevelopment paving the way for development of shopping malls. Retail activity in this micro-market is expected to continue the growth trajectory mainly due to growing catchment area, limited mall space in CBD locations, availability of large land parcels for development and enhanced connectivity via Metro Rail phase I. Key malls that commenced operations in last one year in SBD locations include Brigade Orion (0.75 million sqft) at Dr. Rajkumar Road and Mantri Square (0.93 million sqft) at Malleshwaram. Amongst the PBD locations, established residential location of ORR - Sarjapur provides opportunity for development of shopping malls in short term, while Whitefield on the other hand has witnessed substantial penetration of retail activity. Locations of Hosur Road, Bannerghatta Road, Kanakpura Road, Mysore Road andTumkur Road support retail infrastructure complementing the residential activities. Retail activity in Bangalore North and Old Madras Road (OMR) is burgeoning and these micro-markets have high potential for development of shopping malls in medium to long term. Whitefield accounts for highest mall space; it constitutes nearly 69% of total mall space in PBD locations. Whitefield over the years has emerged as a self-sustaining location with commercial, residential and retail developments. Key operational malls in this location include Inorbit Mall (0.34 million sqft), Phoenix Market City (0.97 million sqft) and Park Square Mall (0.45 million sqft). Owing to significant existing and impending mall space, Whitefield exhibits lesser potential for development of new malls in short to medium term. Although ORR-Sarjapur stretch is one of the most promising residential locations of Bangalore, the location is currently dependent on SBD locations for its retail needs. Soul Space Spirit(0.3 million sqft) is the only operational mall in this location. With no malls under construction, this location is highly suitable for development of shopping malls in short term. Kanakpura Road currently lacks presence of shopping malls, but has substantial under-construction and planned mall space. Key shopping malls in advanced stage of planning include Mantri Arena (0.82 million sqft), and Puravanakara Mall (0.45 million sqft). Lack of availability of land for development, restricted land- use zoning and proximity to SBD locations of Koramangala and Jayanagar are key reasons that have restricted the development of malls in Bannerghatta Road. Currently the location has one operational mall Royal Meenakshi Mall (0.34 million sqft). This location has limited potential for development of malls mainly due to significant mall supply in SBD locations. Mysore Road currently accounts for nearly 0.5 million sqft of operational mall space. The malls here mainly cater to daily requirements, lacking entertainment and fine-dining options. Limited residential activity in this location has restricted development of malls in this micro-market and has limited upcoming and planned mall space. Growth in residential activity over the past few years has led to increased retail demand along Tumkur Road and this location is a potential destination for mall activity. Currently, the location does not have any operational mall, but houses Metro Cash and Carry Outlet (Cash and Carry format). Vaishnavi Sapphire (0.25 million sqft) is one of the key malls likely to be operational by2013 end and BIG Shopping Center is expected to open their flagship store BIG (0.42 million sqft) in this location. Limited residential activities along Hosur Road has restricted the development of malls in this region. Presently, there are no operational malls, however, with a few large-scale residential projects coming up and with the proposed Metro Rail phase II- this location is set to witness increased retail activity. Neo Mall (1.35 million sqft) at Patel Neo Town is among the key upcoming malls in this location. Old Madras Road, of-late has witnessed increased residential activity with major Class A developers launching their residential projects. Currently, not many retail projects are planned in this micro-market however; retail activity across this micro-market is anticipated to gain momentum in the medium to long term. Salapuria Sattva Group is set to launch the World Market (1.0 million sqft) in this location. Despite commercial activity in Bangalore North being in nascent stage, this region has witnessed increased residential supply. Shift in the developers’ interest towards this location has made way for many planned retail projects. Key developers including Brigade Group, MFAR Holdings, Century Group and Ozone Group have planned shopping malls in Bangalore North. 16Indicates Gross Leasble Area (GLA); unless and otherwise mentioned in the report mall size is indicated in terms of GLA 17GLA is the total floor area designed for a tenant’s occupancy and exclusive use, including basements, mezzanines, or upper floors measured from the center-line of joint partitions and from outside wall faces. It is the space, including sales area and integral stock areas for which tenants pay rent. BANGALORE: RETAIL MAKET REPORT 18
  • 20. BANGALORE: SHOPPING MALLS Malls in CBD Operational Under Construction Planned 1 G Corp 1 MG Road 6 Suraj Cambridge Mall 2 EVA Mall 7 Embassy Galaxy Mall 3 Garuda Mall 4 The Collection 5 Sigma Mall Malls in SBD Operational Under Construction Planned 8 Salarpuria Oasis Mall 17 Vega Mall 21 Sobha Grand Mall 9 The Forum 18 City View 22 Karle Mall 10 Swagath Garuda 19 Orion Mall - 2 23 Nitesh Mall 11 Gopalan Innovation Mall 20 World GT Mall 12 Mantri Junction 13 Mantri Square 14 Orion Mall 15 Gopalan Signature Mall 16 Leela Galleria Malls in PBD Operational Under Construction Planned 24 Soul Space Arena 35 Grand Mall & Towers 44 Gopalan Destination Mall 25 Phoenix Market City 36 Virtuous Xander Mall 45 Prestige Technostar 26 Inorbit Mall 37 Forum Shantiniketan Mall 46 MBD Zephyr 27 Park Square 38 Salarpuria World Market 47 Mantri Mall, Agara 28 The Forum Value Mall 39 Neo Mall 48 Raheja INXS Mall 29 Cosmos Mall 40 Gardens Galleria 49 Perk In Mall 30 Soul Space Spirit 41 Vaishnavi Sapphire 50 Prestige Falcon City 31 Royal Meenakshi Mall 42 MSR Regallia Elements 51 Mantri Mall, Kanakpura 32 Gopalan Arcade Mall 43 RMZ Galleria 52 Puravankara Mall 33 Gopalan Legacy Mall 53 Lotus Mall 34 Esteem Mall 54 Karle Town Center 55 Monarch Celestial 56 Century Istana High Street 19
  • 21. Bangalore: Shopping Mall Snapshot NH 7: To Hyderabad 56 Bangalore International Airport 55 Yelahanka 43 NH 4: To Mumbai BIEC HMT Township Hesaraghatta Cross 22 41 RMV Extension Peenya Industrial Area 14 18 Malleshwaram 34 Hebbal 42 54 NH 4: To Chennai Nagawara 38 Palace 13 Rajaji Nagar 20 Grounds Banaswadi 19Frazer Town Byppanahalli 5 1 MG Road 6 23 Krishnarajapuram 36 25 37 15 27 45 44 ITPB 46 26 21 Vijayanagar 33 7 Indiranagar Bangalore City 4 24C.V.Raman Railway Station Richmond Nagar Town 3 2 8 16 Brookefield EPIP ZONE WHITEFIELD 29 35 28 Marathahalli Varthur Mysore Road 53 32 Banashankari Kengeri SH 17: To Mysore 12 Puttenahalli 40 51 52 Jayanagar Koramangala 9 10 J.P. Nagar 11 17 BTM Layout 50 31 30 47 Bellandur 48 Sarjapur Road HSR Layout Begur 49 Thalagattapura Gottigere NH 209: To Coimbatore ELECTRONIC CITY PHASE I & II 39Bommasandra NH 7: To Salem Outer Ring Road Metro Rail Under Construction Key Residential Areas NICE Ring Road Proposed Peripheral Ring Road Metro Rail Operational Elevated Express Highway BANGALORE: RETAIL MAKET REPORT 20
  • 23. Shopping malls in Bangalore can be predominantly categorized as neighbourhood, community and regional malls based on the anchor tenant, GLA and size of the trade area it serves. International Council of Shopping Centers (ICSC) defines a shopping mall as a group of retail establishments that is planned, developed, owned and managed as a single property with on-site and basement parking. Shopping mall’s size and orientation are generally determined by the market characteristics of the trade area served by the mall. Shopping malls can be classified based on its tenancy mix and size of the trade area it serves, not solely on the GLA of the mall. Adapting from the definition as suggested by Urban Land Institute(ULI) and ICSC, shopping malls in the city can essentially be categorized as: Neighbourhood Mall: Neighbourhood mall focuses on convenience goods that meet the daily needs of an immediate neighbourhood. Usually anchored by a super-market, neighbourhood malls tend to serve a trade area within 2 - 3 km radius and GLA for these malls range between 100,000 - 300,000 sqft of GLA. Gopalan Arcade Mall (0.16 million sqft) and Gopalan Legacy Mall (0.18 million sqft)are prominent neighbourhood malls in the city. Elements Mall with Auchan hyper-market as one of its anchor tenant and Vaishnavi Sapphire Mall with More super- market as its anchor tenant are among the key upcoming neighbourhood malls. Community Mall: Community mall while providing daily necessities also offer a wider range of merchandise, home furnishings and entertainment options than the neighbourhood mall. Forum Mall (0.36 million sqft) at Koramangala, Royal Meenakshi Mall at Bannerghatta Road (0.38 million sqft) are among the operational community malls in the city. Forthcoming Vega City Mall (0.42 million sqft) on Bannerghatta Road is likely to evolve as a community mall. Regional Mall: A regional mall offers a wider range in terms of retail category, entertainment and food. This kind of a retail development depending on its tenancy mix has a potential to cater to the trade area ranging from 5 - 15 km. Brigade Orion at Dr. Rajkumar Road (0.75 million sqft), Mantri Square at Malleshwaram(0.933 million sqft) and Phoenix Market City (0.97 million sqft) at Whitefield are categorized as regional malls. Planned mall by Nitesh Estates at Indiranagar (0.8 million sqft) and Mantri Mall (1.20 million sqft) at Agara Junction are likely to be positioned as regional malls by virtue of its size thereby catering to a larger catchment. Specialty Mall: A specialty mall employs a unifying theme that is carried out by the retail stores in their merchandize. These malls may rely on discretionary income expenditures and provide one- stop shopping experience for a specific product type or price segment. These malls could be anchored by an upmarket / premium Multi-Brand Outlet (MBO) format while fine dinning and leisure also play a key anchor role. The Collection - UB City at Vittal Mallya Road can be categorized as a Specialty mall designed as a Luxury Mall. Upcoming malls with alike theme in the city include Galaxy (0.19 million sqft) by Embassy Group at Residency Road and City View by Westcourt Real Estate (0.06 million sqft) on Bellary Road. However, specialty malls focusing exclusively on sale of home and furnishing products, cars and auto-accessories, gold or electronic and white goods are currently un-explored in the city. Table below compares the broad indicators to define the shopping malls. Table: Basic characteristics of Shopping Malls Type of Mall Neighbourhood Mall Community Mall Regional Mall Anchor Tenants Super-market / Hyper-market chain Department Store / Hyper-market / Multiplex 1 or 2 Department Store / Multiplex / Entertainment Retailers GLA (sqft) Trade Area Radius 100,000 - 300,000 2 - 3 km 200,000 - 500,000 3 - 5 km 600,000 - 10,00,000 5 - 15 km BANGALORE: RETAIL MAKET REPORT 22
  • 25. Until the last decade, development of malls was at a nascent stage. However, with the progress of the city’s retail infrastructure towards a differential phase, Bangalore is expected to see entry of new mall formats including a Strip Mall and a Town Center. Over the years, shopping malls in the city have continually invented a variety of additional real estate products to accommodate advancing trends in retailing. As a result, shopping malls based on their configuration, can be further categorized as follows: Enclosed Mall: These are enclosed malls, with a climate- controlled walkway between two facing strips of stores. Most of the malls in the city are enclosed mall with department stores, super-market or a hyper-market chain, food-court and fine dining options as well as entertainment retailers. Open-air malls: Strip center: A strip center is a single or multi level row of stores or service outlets managed as a coherent retail entity, with on-site or basement parking. A strip mall usually designed on a strip of land is configured in a straight line, or has an "L" shape depending on the dimensions of the land parcel. One MG Road (0.18 million sqft) by G-Corp despite being an enclosed mall has incorporated design elements inherent to a Strip mall with retail stores facing the street. This mall has been designed as a combination of open-air / high-street format and an enclosed mall like format. Emerging Retail Format: Organized Wholesale Retail Town Center: A town center is defined as an open-air center with public space and street front retailing on at least two pedestrian streets. Town centers are essentially parts of integrated developments with residential, office and civic uses along with retail component thereby creating an ambience of dowtown. Proposed shopping mall by Karle Properties - Karle Town Center (1.4 million sqft) is expected to be a community mall designed as a Town Center having a combination of open-air / high-street and an enclosed mall like format. Before economic liberalization, wholesale markets in the city were restricted to the “petta” regions. Areas of Chikpet, Ballepet, Akkipet , Cubbonpet - continued to cater to the wholesale retail demands of the city ranging from grocery to stationery items to textiles. In 1997, with Government of India (GoI) permitting 100% FDI in Cash and Carry formats, the city witnessed entry of major cash and carry players in the organized retail sector and prominent retailers like Metro Cash and Carry and Decathlon set-up their stores in the city. Going forward, the wholesale market in Bangalore is expected to witness entry of many international players such as Best Price by Bharti Walmart, Carrefour and expansion of existing players including Metro Cash and Carry and Decathlon. Salarpuria Sattva in collaboration with Future Group is set to launch a World Market (1.0 million sqft) on Old Madras Road in PBD. BANGALORE: RETAIL MAKET REPORT 24
  • 26. SHOPPING MALL: PRODUCT CATEGORY DISTRIBUTION 25
  • 27. Malls in the city are largely anchored around an Apparel and Footwear brand and / or a Hyper-market chain. Entertainment and Food & Beverage (F&B) retailers are also among the predominant anchors in shopping malls. In community malls anchor tenants usually occupy 40 - 50% of the total mall space and for a regional mall it ranges between 50% and 55%. Department Stores or Apparel and Footwear brands are one of the prominent anchors in shopping malls. Other significant anchor tenants include multiplexes closely followed by hyper- market chains like Star Bazaar, Hypercity, Big Bazaar, Spar and restaurants. Restaurants / food-courts also attract sizeable consumers to malls. Figure: Product Category Distribution: Anchor Stores 5% Till recent past, entertainment in the retail malls was confined to Multiplexes; however, today it is growing to a status of an important anchor. Brigade Orion at Rajajinagar and Park Square in Whitefield have roped in various gaming retailers- the likes of Blu O, Amoeba and Time Zone apart from eminent multiplexes. Vanilla stores across the malls in the city are dominated by Apparel and Footwear retailers followed by Food and Beverage (F&B) tenants. Other categories like electronic goods, home furnishings books & stationery items are also among the noticeable retailers occupying vanilla stores. Figure: Product Category Distribution: Vanilla Stores 5% 4% 19% 16% Apparels & Footwear Food & Beverages Multiplex Luxury Malls 40% 16% Home & Life Style Hyper market / Super market Others 4% 20% 55% 9% 7% Fashion & Apparel Personal Care / Watches / Jewellery Food & Beverages Books / Stationery / Gifts Electronic & Whitegoods Others As per AT Kearney, the Indian luxury market is growing at 20% a year and is expected to grow to USD 14.7 billion by 2015 from USD 5.8 billion today. In addition, 100% FDI in single brand retail is expected to facilitate entry of international retailers in the city. Owing to a healthy economic growth, the city has witnessed an increase in population of High-Net Worth Individuals (HNI) and Super rich. The city accounts for the third largest population of HNIs after Mumbai and Delhi. Luxury retail in Bangalore is confined to high-street of Lavelle Road and five-star hotels. UB City at Lavelle Road and Leela Galleria at Leela Palace are amongst the key operational luxury malls in the city. UB City has become a preferred destination for luxury brands mainly due to availability of necessary infrastructure and brand visibility that it offers. Key luxury brands operational in the city include Burberry, Jimmy Choo, Louis Vuitton, Canali, BottegaVeneta, Tag Heuer, Paul Smith and Tumi. Upcoming malls in this category is Embassy Group’s shopping mall at Residency Road. Prevailing luxury mall rentals range between INR 350 and 420 per sqft per month for UB City and between INR 150 and 250 per sqft per month for Leela Galleria. BANGALORE: RETAIL MAKET REPORT 26
  • 29. Shopping mall in SBD offer an advantage as compared to malls in CBD owing to high ATD, substantial footfalls, better mall infrastructure and lesser rentals. Shopping mall rentals mainly depend on the location of the mall and the size and location of the store in the mall. Total occupancy cost for a retail outlet includes both rent as well 18 Post 2009, shopping mall rentals across CBD witnessed no major change due to increased mall space supply in the SBD locations. Malls rentals in SBD locations witnessed marginal appreciation in rental values in the range of 10 - 12% during 2009 - 12.as the Common Area Maintenance (CAM) charges . CAM charges across malls in Bangalore range between INR 20 - 26 per sqft per month on Super built-up area. 19 Annual ATD on Useable Carpet Area (UCA) across SBD malls range from INR 8,000 to 16,000 higher than the ATD for CBD malls, which ranges from INR 5,000 to 9,000 . Higher ATD in SBD is attributed to growing catchment area and availability of better mall infrastructure as against CBD. Comparable rentals and higher ATD offer an advantage to shopping malls in SBD locations when compared to CBD locations. Of the SBD locations, Forum Mall at Koramangala charges a higher rent of INR 420 - 450 per sqft mainly due to higher foot falls and higher ATD. The Forum not only attracts the highest foot falls but also accounts for the highest ATD of nearly INR 16,000 per year per UCA20 Table: Prevailing Mall Rentals Rentals Amongst the PBD locations, mall rentals in Bannerghatta Road increased by 8 - 10%, but were insignificant in Whitefield and Mysore Road. Shopping mall rentals across CBD locations of Bangalore to witness nominal growth in the short term mostly due to increased mall space supply and better infrastructure in SBD locations. Rentals across SBD locations are expected to sustain this growth trend within the next three years, owing to minimal prevailing vacancy rates and moderate pre-commitments. High impending mall space supply in PBD locations likely to contain the rental values at current levels for the next 1 year. Table: Average Trading Density (INR/year/UCA) (INR/sqft/month) Anchor Tenants Multiplex Vanilla Tenants 21 Ground Floor First Floor Other Floors CBD SBD PBD 55 - 90 45 - 75 35 - 50 50 - 70 45 - 60 40 - 50 185 - 400 220 - 450 120 - 200 150 - 350 180 - 325 80 - 175 120 - 300 150 - 275 65 - 150 Based on Micro-market CBD 7,800 SBD 9,800 PBD 6,300 18Please refer annexure for the scope of work covered under Common Area Maintenance 19Source: Vestian Research 20Source: Vestian Research 21Rental Values indicated are on carpet area for a 1,000 sqft vanilla store with an efficiency of 65% BANGALORE: RETAIL MAKET REPORT 28
  • 30. OUTLOOK By 2015, Bangalore is expected to witness an addition of nearly 5.60 million sqft; PBD locations account for nearly 70% of this upcoming supply. The attractive micro market for development of a shopping mall in short term is ORR - Sarjapur due to the lack of existing and under-construction mall space. Meanwhile Bangalore North and Old Madras Road have potential for development of malls in medium to long term. Owing to significant existing and impending mall space, Whitefield does not have potential for development of new malls in short to medium term. Shift in the developers’ interest towards Bangalore North has made way for many planned retail projects in this micro-market. Consequently, this is a potential choice for mall activity in the coming 3 - 5 years. Retail activity in Old Madras Road is expected to gain momentum in medium to long term, mainly due to increase in residential supply, improved connectivity and economic development towards Hoskote Industrial Area. As against the last decade wherein development of malls was still in a nascent stage, the city is currently witnessing a differentiation phase with the development of newer formats of malls and retail infrastructure. Previously malls in the city were primarily community malls. However, entry of national developers and availability of larger land parcels have led to the development of regional malls in the city. Malls in the city are largely anchored around an Apparel and Footwear brand, F&B, entertainment and / or a hyper-market chain. Till the recent past, entertainment in the retail malls was confined to multiplexes however; going forward other forms of entertainment are going to be an important part of the anchor. With significant luxury brands planning to foray in to the city’s market, demand for luxury malls is likely to remain strong. Despite increasing mall space in the city, key high-street locations of the city shall continue to attract retailers mainly due to better brand visibility, optimum catchment area reach and convenience of access. In light of 51% FDI allowance for multi—brand retail by Government of Karnataka - the demand for retail space in the city is expected to strengthen in the coming years. Prevailing low vacancy rates, high footfalls and strong economic outlook are likely to positively impact the rental values across both shopping malls and high street locations. 29
  • 31. TERMS OF REFERENCE CLASSIFICATION of the city: To understand the characteristics of the retail spaces across Bangalore, the city has been sub-divided spatially in to three major zones: Micro-markets Central Business District (CBD) Secondary Business District (SBD) North East South East South West North West Peripheral Business District (PBD) Areas covered within the micro-markets M.G. Road, Brigade Road, Magrath Road, Richmond Road, Lavelle Road, Cunningham Road, Langford Town, Brunton Road and Residency Road SBD locations based on the geographic boundaries have been further categorized in to four quadrants: Indirangar, CMH Road, Old Madras Road (till K.R.Puram Bridge), Banaswadi, Bellary Road (till ORR) Koramangala, few locations of Bannerghatta Road and Hosur Road (till Silk Board Junction) Kanakpura Road (till ORR), Jayanagar, JP Nagar, Vijaynagar and few locations of Rajajinagar Sadashiv Nagar, New BEL Road, Sanjay Nagar, Malleswaram and few locations of Rajajinagar and Yeshwanthpur Peripheral locations of Whitefield, ORR - Sarjapur, Electronics City and Hosur Road, Bannerghatta Road, Kanakpura Road, Mysore Road, Old Madras Road, Tumkur Road and Bangalore North 31
  • 32. TERMS OF REFERENCE Definitions High-Street Shopping Malls Areas covered within the micro-markets A high-street refers to the retail street in a city with street lined retail stores. A shopping mall is a group of retail establishments that is planned, developed, owned and managed as a single property with on-site and basement parking Tenant Category in Shopping Malls Anchor Tenant Vanilla Store Unit of Measurement Gross Leaseable Area (GLA) Useable Carpet Area (UCA) Common Area Useable Carpet Area (UCA) The major chain/s or department store/s in a shopping mall positioned to produce traffic for smaller stores in the facility Smaller format retail stores in a mall are call Retail spaces are measured on the following three bases: GLA is the total floor are designed for a tenant’s occupancy and exclusive use, including basements, mezzanines or upper floors measured from the centerline of joint partitions and from outside wall faces. It is generally expressed in square feet (sqft) and rents for shopping malls is payable on the GLA. Useable carpet area or the carpet area is the total area of the premises measured from internal walls Common Area include usable consumer horizontal and vertical circulation areas. In some cases a portion of landscaped / outdoor piazza would also constitute to common areas. Loading Factor is the ratio of Loss Factor and UCA. Loading factor across shopping malls in Bangalore for,  Anchor tenants varies between 20% and 30%  Vanilla stores vary between 50% and 60%.  High-street locations ranges between 15% and 25%. BANGALORE: RETAIL MAKET REPORT 32
  • 33. TERMS OF REFERENCE Operating Costs Tenants follow the following rental models: Rent Maintenance Charges Utilities Insurance Car Parking Stamp Duty Registration Charges Lease Terms Lease Period Security Deposit Hours of Operation Rent Escalation  Fixed rental with annual escalation  Revenue Sharing Model which involves a fixed component (Minimum Guarantee) and a variable component which is based on a percentage earned on the retailer’s sale. Maintenance of the common areas namely upkeep of the corridors, Annual Maintenance Contracts (AMC) for all the equipment provided by the developer is under the purview of the developer or the landlord; however expenses towards the same are borne by the tenant and is payable on the GLA. For both high-street and malls, the tenant is accountable for the payment of electricity, water and telecommunications within their premises which is charged at actuals. Insurance for the building / mall is under the purview of the developer or the landlord. As per market practice, shopping malls across Bangalore offer minimum 1 car park for every 750 sqft leased; charges for which are included in the rent. Any additional car parks required by the tenant over and above this attracts an additional charge. Stamp Duty for the premises shall be borne by the tenant. Based on the tenure of the lease Stamp Duty is applicable as follows: 0 - 10 years : 1% on annualized Average rentals of total lease tenure and Security Deposit 10 - 20 years : 2% on annualized Average rentals of total lease tenure and Security Deposit Registration charge for the premises shall also be borne by the tenant. Based on the tenure of the lease registration charges are applicable as follows: 0 - 10 years : 0.5% on annualized Average rentals of total lease tenure and security deposit 10 - 20 years : 0.5% on annualized Average rentals of total lease tenure and security deposit Typically lease period is as follows  15 - 21 years for Anchor stores  6 - 9 years for Vanilla stores As a market practice, the landlord / developer charges an equivalent of 6 - 8 months rent as interest free security deposit. For both high-street and malls, maintenance charges are computed considering the hours of operations to be in the range of 10 - 12 hours As per the current practice, rental values for malls or high-streets are escalated by 5% every year or by 15% every three years 33
  • 34. GLOSSARY IT Information Technology ITeS Information Technology enabled Services INR Indian Rupee BCC Bangalore City Corporation CITB City Improvement Trust Board BDA Bangalore Development Authority FDI Foreign Direct Investment BIAL Bangalore International Airport Limited GLA Gross Leasable Area ORR Outer Ring Road MBO Multi-Brand Outlet GDP Gross Domestic Product HNI High Net Worth Individual UCA Usable Carpet Area ATD Average Trading Density 34 CBD Central Business District SBD Secondary Business District PBD Peripheral Business District