Shoppers Stop to pull out of Ansal Plaza in South Delhi

Shoppers Stop is staying away from malls with multiple ownersfinding it difficult to meet the demands of each owner.

After changing its mind about becoming an anchor tenant at Atria mall in South Mumbai, it has now decided not to renew its lease contract with one of the first malls in the country – Ansal Plaza in South Delhi.

The pioneer in organised retail had been the first anchor tenant at Ansal Plaza, at a time when mall culture had just started in the country more than a decade ago.

Speaking to BusinessLine , Govind Shrikhande, Managing Director, Shoppers Stop said, “When a mall has multiple owners, it is difficult to meet the demands of each landlord. Mall management is better under a single owner. We would like to get out of malls like Ansal Plaza which has several owners once the time period for the lease is over.’’

In fact Ansal Plaza in its heydays was known as a ‘Shoppers Stop mall’ as it drew footfalls on the strength of its pioneering status in the retail business.

In Mumbai too Shoppers Stop recently decided to stay away from Atria Mall due to the mall having several owners.

It had been roped in with the purpose of reviving the fortunes of the high end mall in Worli which had big international brands like Rolls Royce, Sony, Mango and Aldo in the past. “A retailer wants to be part of a mall only if it is managed well. It is not just about the cost of rentals alone, and malls like Phoenix Market City are better managed as it has a single owner,” added Shrikhande.

Over the years malls like Ansal Plaza have been sold off to different investors as part of a ‘strata’ sale which happens in pieces to maximise returns on the mall.

The original mall owners have been engaging in this process over the years as malls have had pressure to make money.

“Most mall owners have been running it as a real estate company and selling shop by shop over the past decade, and Ansal Plaza has always had different shops owned by different owners. There should be ownership as a single entity,” observes Rajneesh Mahajan, COO, Inorbit Malls India.

According to Anand Sundaram, CEO, Pioneer Property Zone, a mall management specialist company, “Sustainability is an issue for retailers as most do not want to extend their lease when there are multiple owners of a mall. When mall owners exercise the strata sale approach to exit, it leads to apathy among customers. Instead, mall developers should exercise exit options like REITs or an IPO to get higher returns instead of selling shops piece by piece to different investors.’’

Currently malls like Inorbit, Phoenix Market City, Forum and Prestige have single ownership.

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