INRnews - Indian Real Estate News

The people of Punjab have always been an enterprising lot. Capable of much hard work, sweat and toil, it is they who must be given the credit for showing the way to abundance and prosperity with the ‘green’ and ‘white’ revolution. The land’s plentiful harvests have also meant plenty of money in the pocket and there is no doubt that farmers of Punjab are relatively more well off than their counterparts elsewhere in India. With more disposable money to burn, the people of Punjab have been seeking avenues to do so, thereby fuelling the retail boom in the State. With money to splurge, and brands to buy, can the Mall culture be far behind?

Over a short span of time, several builders have come up with blue prints and proposals highlighting their upcoming projects and there’s no doubt that these malls would add an unprecedented dimension to the retail boom in Punjab.

Let’s take an in-depth analysis of malls which are coming up in the region.

In the beginning of 2005, there were just two operational malls with a total area of 2.70 lakh sq.ft. It is now confirmed that this scenario will undergo a sea change with nine new projects slated to come up by the end of 2006 taking the total mall space to 31.80 lakh sq.ft. – that’s a twelve fold increase from the previous year ! It is predicted that some lesser malls would also come up in 2007, as the masses gradually get used to the mall culture. Even though some smart players and analysts are still waiting to gauge the nuances of scrapping the traditional methods of selling and purchasing, the mood remains quite upbeat about the money inflow to the state. About Rs. 600 billion is waiting to be made in the real estate sector in in Punjab over the next 3 years, and more investments are likely to follow soon. As many as 60 more malls are expected to come up in various cities. More than 30 would be operational in the coming two years. The state, which has been consuming more than others, has become a hot destination for those in this industry. Construction activity is in full swing in a number of projects a fact quite visible in most cities. Some of the cities & towns where developments are planned include Ludhiana, Mohali, Jalandhar and Amritsar, Patiala, Hoshiarpur, Khanna, Gurdaspur, Kapurthala, Nawanshahr, Ferozepore, Ropar, Faridkot, Muktsar, Moga, Bathinda, Rajpura, Mansa and Sangrur.

Why Punjab ?

Studies portray that consumer spending in Punjab is higher than the national average. Projections are equally positive for other cities as well. Punjab has been consuming more than most other states, and is significantly higher than the all-India average in almost every retailing category, says Images-CII study on “Retailing in Punjab: 2010 and Beyond”. These categories include food and beverages, footwear, clothing and communication. As per estimates, the average per person monthly consumption expenditure during 2004-05 in urban Punjab was Rs.1182.90, which is higher than the national average of Rs.1149.52.

As per study, unlike other states, the unique feature about Punjab is that it has an equal support from urban as well as rural consumers so far as growth in consumption is concerned. This factor points to a tremendous potential for organised retail, as the location choice would not act as a constraint here.

The average monthly consumption expenditure for rural consumers in Punjab is Rs 1,022.05 — only marginally lower in comparison to the state’s urban average, but much higher than the national average of Rs.635.72 per person per month, says the study.

With the highest per capita income in the country, that is nearly three-and-a-half times the all-India average, an excellent infrastructure to promote new industries and support the existing ones, coupled with high percentage of employment, Punjab stands second to none in fast becoming a favoured destination for the retail industry.

No wonder, investors are quite keen to tap this huge consumption potential in the state. The mood is thus, extremely upbeat as far as the retail options in Punjab are concerned.

Ludhiana

Shopping malls have turned out to be the next ‘in-thing’ in Ludhiana and the culture is spreading like the proverbial fire. Ludhiana known for its hosiery and sports goods industries is fast emerging as a favourite destination for shopping plazas and multiplexes as a dozen malls are rapidly up coming at a cost of Rs 600 crores (approx). Ludhiana has become a metropolis. And Retailers and developers, riding on a wave of retail boom in one of world's fastest growing economies, are adding new dimensions to the business to lure more customers.

Malls are pouring in Ludhiana one after the other with nearly 15 others are all set to come up on different roads in a span of two to three years. A large number of these are on the Ferozepur Raod and on the GT Road on the Ludhiana Jalandhar Segment. The largest mall in the city will be in the western part of the city- the Ludhiana City Centre of the City’s Improvement Trust and which is coming up on a huge 26 Acre site.

This has resulted in a sharp rise in the land prices which now ranges from Rs 5000 to Rs 10,000 per square yard. These Malls are roping in the leading brands in fashion, consumer and lifestyle products. A study has predicted good growth for all upcoming malls in and around Ludhiana with retail spending potential to increase from Rs 3864 crore in 2005 to Rs 5940 crore by the end of 2010.

Chandigarh

Located at the confluence of three prosperous states of North India, Chandigarh, with a population of 9,00,000 people, boasts of being the first city in the country in terms of human development index with a literacy rate of 82 %. Over the years, this planned city has been luring the best of professionals from all walks of life and from every nook and corner of the country. This has fuelled the rise of property prices in the city. The retail activities have also shown a parallel high rise in the city’s development graph with around 8-10 mall developments are known a few of which are coming up in the famous Sector -17 market.

Amritsar

The spiritual center of Punjab, Amritsar has attracted a number of developments in and around the city. Tourism, a major contributor to the city’s economy, is aiding the financial well being of the city’s residents thereby creating opportunities for the influx of brands and malls into the city. However, due to the lack of large areas within the city a few cinemas are being converted into malls and a few are coming up on the outskirts on Batala Raod and the GT road towards Jalandhar.

Mohali

In the past, the only demand for real estate development came in the form of commercial spaces for banks, technical institutes and local occupiers. The overall scenario is dramatically changing with the mall culture is slowly and steadily sneaking in. With soaring land prices in Chandigarh, Mohali & Panchkula, promoters have taken a fancy for the suburban areas with 2 areas especiall emerging as a hotbed for retail growth

The first is Zirakpur which Strategically located on the three busy highways — Chandigarh-Ambala, Kalka-Ambala and Zirakpur-Patiala, Zirakpur has at least seven shopping malls in the pipeline. The start of work on the four-laning of the Chandigarh-Ambala highway and building of thousands of apartments, which would be inhabited in the next couple of years, are the other reasons prompting the builders to come up with the shopping malls.

The second area is on the opposite side of town on the Kharar & Landran Roads. Here Atleast 8 proejcts have been announced and it remains to be seen how many actually take shape.

Jalandhar

Famous for its sporting good industry, Jalandhar is seeing a lot of development activity on the GT Road on the Ludhaina Jalandhar segment with around 4 projects having been announced. In the city, Jalandhar could see two to three malls in the next three years

Patiala

Famous for its Peg, Parandi & Jutti-the city of maharajas is also gearing up for the retail boom with 4 projects in the pipeline including the conversion of a few cinema halls.

Highways

Besides leading cities, the highways running through the state are of special interest to investors given the spending power of Punjabis, especially non-resident Indians (NRIs).A number of multiplexes, hotels and shopping mall projects have been approved by the government along highways - particularly the National highway No. 1 (old Grand Trunk Road) between Ambala and Amritsar as well as other highways linking Chandigarh with leading cities. The promoters of these highway shopping malls are eager to cash in on thousands of motorists, who travel on the highway daily.

Future Challenges

Punjab is all set to experience the phenomenon of a major retail boom, representing a grand opportunity to all the retailers at large to exploit its huge consumption potential.

However, there does seem to be an oversupply in most cities and the competition will heat up. The challenges for mall owners lie in not just roping the top-brands, but also retaining and sustaining their presence. The success of malls in the long run would depend on number of real customers generated as opposed to mere foot falls created. Apart from strong and reliable infrastructure, a right tenant mix needs to be ensured as also strategies that prove profitable for the tenants. The challenge here lies in attracting the middle-class and rural customer, who will look for better options not just in variety but in pricing as well. They will only succeed if the price factor is taken into consideration of whatever products are being sold, in direct proportion to income level of the masses, in and around the area. The developers that have a vision understand what it takes to setup and manage a mall will survive while those looking for a quick buck will surely bite the dust.

About EmGreen Projects Ltd.

EmGreen is the real estate division of the Imperial Group. EmGreen has today embarked into a number of upcoming projects including Shopping Malls, Group Housing and Residential Townships.