The real reason why Mumbai's high-end Atria mall failed to click

With more than 52 percent of the malls lying vacant in Mumbai,Mumbai’s high-end Atria Mall in Worli has two choices. Either a full blown revamp into a proper retail destination based on consumer preferences or an outright sale if the less than 2-acre property fetches the owners- Champalal Vardhan, Dalichand Shah and Bhupesh Jain- around Rs 1,000 crore.

According to a report in today’s Times of India ,Shoppers Stop is negotiating for 35,000 sq ft space in the mall currently but an insider was quoted as saying that the owners are open to an outright sale if it fetches them around Rs 1,000 crore.

It failed to bring sufficient returns since it opened in 2006, and over 50% of the mall has remained empty despite attracting top brands like Rolls Royce, BMW, Mango, Swatch and Tissot, the report said.

So why did the mall fail to take off despite its premium look?

It’s the location- an arterial road with poor access and no railway stationanywhereclose by to fetch large crowds. Add to that the absence of a theatre and not enough parking space.

An Assocham survey done in December last year, pointed out that more 52 % of the malls in Mumbai were vacantpartly due to economic slowdown, poor designing, lack of robust revenue generation model and located in unattractive locations. And whilereal estate prices and cThe onstruction costs are rising the retail business is not growing enough to absorb this. There are just not enough footfalls.

In fact low demand from retailers, lack of liquidity has also resulted in seven of nine mallsdeferringlaunchesin the third quarter of the current fiscal, according to a report b by commercial real estate services firm Cushman & Wakefield.

For instance, Bengaluru deferred two malls totalling 7,10,000 sqft- one of them due to construction delay and other due to liquidity issues. Chennai too deferred two malls- 4,61,000 sqft- due to delay in construction and lack of sufficient demand from retailers. Pune saw postponement of 430,000 sqft mall space due to slack demand from retailers caused by locational constraints while delays in acquiring necessary regulatory approvals for operation has resulted in 2,25,000 sqft mall spaced deferred in NCR.