Hyderabad is often referred to as Cyberabad because of all the information technology companies that have set up shop here. But how about a new moniker for the city --Mallabad?
In the next couple of years, at least 10 new malls will dot the city's landscape, in addition to the existing two or three. Today, malls cover just around four lakh square feet of space in Hyderabad. This, however, is slated to increase almost nine-fold to a whopping 35 lakh sq ft by the end of 2007.
Promoting the new malls are not just city-based companies like the Maheshwari group of companies (of MPM, The Mall fame) but also companies from other cities like the Bangalore-based IDEB Construction and Projects Limited which is setting up the Sigma mall in Secunderabad.
The Maheshwari group is looking at setting up at least three more malls in the city in the next few years. Babu Khan Estates is setting up a mall at Somajiguda (this is ready but not operational as yet). A GS 24 Carat mall is to come up near Panjagutta, the Sanali mall will be set up at Abids, and the GVK group is setting up a mall in Banjara Hills.
One reason malls are sprouting here is the growth in the information technology and information technology enabled industries in the city. With multinational companies entering the city and offering good salaries to the young fresh out of college, people now have more disposable income.
Girish Mallpani, chief executive officer of MPM-The Mall, says that more money is in circulation as well. "The lifestyles of people in the city have also changed. While earlier people used to be more focussed on saving, today they do not mind spending money. The increasing purchasing power coupled with the influence of foreign cultures where huge amounts are spent on leisure and entertainment are driving the setting up of malls," he adds.
S D Jha, executive director (real estate) at IDEB Construction and Projects Limited backs the point: "There is a market that can be exploited over here." Besides, he adds, in Mumbai, space is at a premium and the cost of land and its development is considerably higher in Delhi.
According to Cushman & Wakefield, the real estate consultancy firm, while the capital value of land for offices in suburban Hyderabad is around Rs 2,200 per sq ft (February 2005), it goes up to Rs 2,700 in high-end places like Begumpet (the central business district).
In Bangalore, the land in suburban areas itself costs around Rs 3,200 per sq ft and goes up to Rs 4,500 per sq ft at M G Road (the central business district).
In New Delhi, while the cost of commercial space in the micro markets in south Delhi is around Rs 6,300 per sq ft, the cost of prime land in the central business district is Rs 8,746 per sq ft.
"This means that if I buy a piece of land in Hyderabad for around Rs 20,000 per square yard, in Delhi a similar piece of land will cost me a whopping Rs 100,000 per square yard. Hyderabad, therefore, is the best bet," Jha explained.
Still, mall promoters confront several issues such as the floor space index in Hyderabad. "Here the FSI is restricted to 1:1.75. This means, for every one square yard of ground space you use, you are allowed vertical space of 1.75 square yards. In cities like Mumbai and Delhi it is higher. In fact, internationally, it is as high as 1:4," Mallpani says.
And in Mumbai, FSI is transferable. This means that a builder is allowed to transfer his unused FSI to other projects as well. Andhra Pradesh does not provide for this. Mallpani contends that if builders are allowed to transfer FSI they will not only obtain more flexibility in developing projects but be able to make optimum use of the available space.
"This apart, speedy approval of such projects should also be ensured through a single-window clearance system," Mallpani said. Jha says that one of the reasons for the delay in approvals is the issue of structural designs that in other cities are not required at the initial stages of approval.
He adds: "The market for malls has not saturated in the city today. So in spite of these issues we have decided to set up a mall in the city as we expect good revenues."
The mushrooming of malls in the city is a boon for multiplex owners. Vikas Sethia, project manager at MPM's upcoming mall, Bonsai, notes that each new mall that is slated to come in the city is sure to have a multiplex.
While Shringar Films Private Limited of the Fame brand of multiplex has been roped in to set up a three-screen multiplex at Bonsai, the Essel group's E-City Entertainment (India) Private Limited will be setting up the four-screen multiplex at IDEB's Sigma mall. Pantaloon Retail (India) Limited's seamless mall Hyderabad Central too is expected to set up a multiplex soon.
