10 June 2022, Mumbai:
Malls have opened in locations like Bangalore and Chennai, and the reception has been tepid, as predicted.
To make matters worse, a rent dispute between mall owners and tenants during the lockout has caused several merchants to reassess their decision to maintain a presence in malls. Retail has been a silent tug of war to attract people between the high street and the malls.
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It's been a roller-coaster ride. Some argue that the high street is dead, while others say shopping malls are in a coma. Brands are moving their stores from high streets to malls in certain regions, while significant businesses ignore mall culture to stand out from the crowd in others.
In certain cities, mall rents outnumber high-street rentals, while the opposite is true in others.
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High street landlords have been significantly more tolerant than mall landlords, says Impressario Entertainment & Hospitality CEO Riyaz Amlani. According to Amlani, the high street also gives him more significant returns than malls.
Although most merchants' first reaction is that mall owners and brand owners must find fair ways to coexist, virtually all of them concede that the high street would be their preferred option in the new normal.
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High streets will fare better in the next 6-12 months, says Siddharth Bindra, MD of Biba India. Biba already has over 60% of its businesses on the high street.
Even though merchants favor the high street, the most significant difficulty they face is expensive rents and a shortage of good high street retail space, particularly in urban areas. Rentals at Khan Market in Delhi are as costly as Times Square in New York, but consumers' willingness to pay is not as high, Amlani argues.
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In reality, most retail firms lose money with rents as high as Rs 600-800 per sq. ft. in high-traffic areas like Mumbai's Linking Road. Retail companies are choosing high street outlets, but it will be in smaller towns where the leases are lower, says Anshuman Magazine, Chairman and CEO of CBRE in India, Southeast Asia, the Middle East, and Africa.
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