Over the past 40 years, India’s economy has sometimes been compared to an elephant—lumbering, in contrast with smaller countries that have seen rapid economic growth. But it is also an economy with longevity and untapped potential.
During the recent ULI Asia Pacific Experience the Experience retail forum, real estate developer, owner, and operator Sid Yog, founder of the Xander Group and chairman of Virtuous Retail (VR) South Asia, discussed the broader Indian retail sector, as well as several of the company’s recent urban Indian retail developments. Joining him in the conversation was Susheela Rivers, office managing partner, co-chair for the global real estate sector, and head of real estate Asia Pacific for DLA Piper.
The Elephant in the Shopping Mall
Indian retail is growing at a compound annual rate of 9 to 11 percent, boosted by both online and brick-and-mortar sales. “The size of the overall organized retail industry is still by a factor tiny compared with any number of metrics, including the country’s consumer base, population, and GDP,” said Yog. Therefore, he thinks the sector is likely to continue growing at a robust rate in the future.
Ample unmet retail demand exists in India’s cities. Incomes and aspirations are rising: the Indian middle class is diverse and by some accounts constitutes 30 to 40 percent of the population, representing between 410 million and 545 million people. In addition, the country’s entertainment industry is largely unorganized, with the exceptions of cinema and some sports events. A visit to a retail development fills the void, making India distinctive among major economies. “In India, the shopping center . . . becomes the focal point of not just retail, but also lifestyle and entertainment, because it is really in many cities the only avenue left for the average Indian family,” Yog said.
The subcontinent of India is “like multiple countries living inside one political entity,” he said. “There is a part of the country that is living in 2050, . . . and there’s a part of the country that’s still living in a very agrarian set-up.” Therefore, there is no prototypical Indian customer, he said. India is huge, and income disparities are vast. “Demand dispersion is wider; the price points are therefore dramatically different, . . . and the average Indian consumer is highly price sensitive,” Yog said. Aspiration must also be affordable, he said, and with 1.3 billion people, India’s market is large enough to support demand for international brands as well as lower-cost domestic ones.
COVID-19 hit India hard, with most retail centers completely shuttered from March to September of last year. As of early January this year, VR South Asia’s shopping centers are back to 65 to 75 percent of pre-COVID sales, Yog said, with about half the number of customers. Because of COVID, online sales and deliveries skyrocketed—an indicator for longer-term behavior changes, Yog predicted.
The social and entertainment aspect of the urban Indian shopping experience has sheltered brick-and-mortar retail from the declines seen in other countries. “For a lot of people, just going out means going to the local retail center because there aren’t very many other avenues like urban parks or urban open areas,” Yog noted. VR South Asia’s retail centers have done well post-lockdown precisely because they integrate substantial park areas, promoting social distance and a sense of safety, he said.
Inside/Outside: a Win-Win
Two of VR South Asia’s shopping centers, which the company refers to as “retail anchor community centers,” offer examples of the kind of multifaceted leisure and retail development that Yog believes is shifting Indian retail paradigms.
One property in Bengaluru, the heart of India’s tech industry and capital of Karnataka state, is a 1 million-square-foot (93,000 sq m) facility with a ground-level concert space, as well as a rooftop bar, pool, jogging track, and amphitheater. A second property in Chennai, capital of the state of Tamil Nadu, covers 2 million square feet (186,000 sq m). Both have retail offerings spanning anchors, grocery items, and fashion, and are designed to be used 24 hours, seven days a week.
The flexibility of these spaces means “the same city could be at different points in time celebrating different aspects of its communities, and that’s what these centers seek to do,” he said. In Bengaluru, for example, the rooftop opens at 5 a.m. with yoga and fitness classes, and converts into a restaurant and event space in the evening, offering one of India’s largest outdoor LCD screens. Once a year, each of VR South Asia’s malls hosts a monthlong curated art show specific to each location and produced by emerging artists.
These shows and other forms of entertainment spill outside the buildings and into surrounding green spaces, which are often substantial. The Bengaluru facility, for example, has a five-acre (2 ha) integrated park and garden space, and a third project under construction in Delhi will feature a 2.5-acre (1 ha) park alongside housing and retail space. The ability to host al fresco dining “really helped during COVID,” Yog said. “As the government allowed us to reopen, we’re actually one of the only developers who didn’t have to retool our F&B [food and beverage] spaces because they’re all inside/outside.”
That caught the attention of tenants, he said, some of whom want more space in VR South Asia’s centers precisely because their design makes it possible to accommodate social distancing with ease and minimal cost. VR South Asia has also supported its vendors, especially in food and beverage, by promoting online purchases via an app and guaranteeing delivery within 30 minutes.
Yog emphasizes that each of these centers constitutes a contextual response to local demand and needs. “You can’t take a Bengaluru center and plunk it in Chennai,” he said. “It won’t work because it is addressing the needs and aspirations of that particular community.”
This is readily visible in the architecture. In Bengaluru, a black and glass envelope conveys a sleek, modern feel reflective of the city’s identity as a tech center. Photos of the Chennai facility show a wall resembling brightly colored tile, a modern interpretation of Tamil temple aesthetics called gopuram. The Chennai center is filled with enough cultural nods, such as hand-carved doorways, to have its own audio architectural tour.
Equity, Access, and Privately Owned Public Spaces: A U.S. Perspective with Indian Roots
Atisha Varshney, a ULI member and founding principal at FORWARD City Labs in California’s Silicon Valley, sees expectations for retail evolving in both the United States and India and the growth of privately owned public space—of the kind in VR South Asia’s developments or in San Jose’s Santana Row—as emblematic of that shift. Varshney grew up in Jaipur, capital of the Indian state of Rajasthan.
“Growing up in the 1990s in a modest neighborhood, the local temple complex was where I would play with other children,” she says. “Although it was the social epicenter of a neighborhood with 500 families, some were left out.” One of her childhood friends was a member of a social group often unwelcome in Hindu temples, and “the custom of announcing one’s entry by ringing the temple bell at the threshold made her very uncomfortable,” she says. For Varshney, it was an early lesson in social inequity and the access challenges inherent in privately owned public space.
Retail developments that integrate parks serve a critical need in Indian cities, which lost green space as the country urbanized rapidly, especially in the 20th century. “Many older places in Jaipur are called bagh, which means garden, . . . but after independence , parks were not an agenda item,” she notes.
Over time, remaining public parks experienced a shift in associated perceptions—from places for families to locations for romantic liaisons. “By the time I was a teenager, there was some stigma in going to the park—quite the opposite of what I would have seen in my mom’s generation,” she says, when parks were heavily used for picnics, sports, and gatherings.
She is heartened, however, that “A lot of work is happening to create these public spaces in India again.” For Varshney, it is a positive trend that Indian landlords are merging retail with open space. These third places, neither home nor work, are at the core of her practice: “Everything in between the buildings is where the city happens,” she says.
Retail space is an important component of third places, and well-programmed parks in privately owned shopping centers offer a good example. “Traditionally, bazaars were the only form of organized retail in India, and while they didn’t evolve to meet the same variety of public needs, they’re still vibrant spaces,” she says. An important point is that bazaars are accessible to all types and classes of people. While “the amenities in modern malls are also attractive,” making them broadly accessible to Indian society is a challenge, says Varshney.
There is also a larger policy challenge related to third places, not just in India but also in the United States. Unleashing the potential of third spaces requires changing how cities think about parks, convincing more developers to see integrated park space as an asset, and, as Varshney describes it, “using collaborative design to bridge the gap between policy goals and implementation realities.”
The definition of a good retail development will continue to evolve, and Varshney and Yog agree that the future is full of possibilities and opportunities. It is clear that attractive, well-designed, and appropriately programmed public space not only can yield higher rents, but also can respond to both economic and social needs.
For planners like Varshney, social equity in the design and programming of public spaces is critical to their sustainability and impact. “How will the privately owned public spaces attached to organized Indian retail evolve to offer opportunities for informal retail and create contextual uniqueness?” Varshney wonders. For her, this mix is central to creating “true shared, equitable public places.”
For Yog, as Indian retail continues to evolve, flexibility, inside/outside orientation, programming, and delivery services are key to maintaining appeal. His firm is working intensively with tenants but maintains a long view. “We’re still a real estate developer,” he said, “but I think we’re integrating all of this to . . . future-proof our developments for the next 15 to 20 years.”