Can Dead Malls Be Repurposed?
My last column suggested that placing new malls in upcoming parts of a city could help in promoting its’ holistic growth. In the feedback I received, some people lamented the demise or near demise of malls which had once been their favourite haunts but had become poor shadows of themselves. This could have been due to the advent of more attractive alternatives in their vicinity, or the result of many other factors.
Over time, mall managements tend to become complacent, losing the cutting edge with which they started their operations. Exciting in-mall marketing and promotion programmes carry it through the initial years but then people change, lose interest and fail to innovate with new cutting-edge ideas.
Sometimes, stores lose momentum, brands falter, or are no longer relevant, which in turn impacts the attractiveness of the mall for fickle visitors who eschew boring old stores. Alert mall managements strive to find ways to encourage laggard stores to lift their game, but if this does not work, need to consider steps to replace them.
I recall a number of heated discussions, many with implicit warnings, regarding a low-performing store. The mall could not act unilaterally as the tenancy period had not finished. We were loath to shut it down, simply to save the face of the company. The mall finally offered to pay us to vacate the premises. Along with us, they also roped in some other weak-performing neighbours, who all accepted the ‘compensation’ and left. That section of the mall was broken down and remodelled, creating larger spaces for hot new brand stores, carving out shops for smaller speciality stores which were then the rage, sprinkling in some cafes. A few months later, the renewed precinct was relaunched. Bingo, it was a hands-down success.
These are of course extreme steps, but they exemplify how on the ball and creative managements need to be, to keep their malls looking fresh and dynamic. Just for this purpose, some malls included a clause in their lease agreements that if the mall required remodelling for the general good, they could ask the store to vacate with a certain notice period.
Assuming that the mall management has exhausted such permutations and combinations, sometimes it still fails to pick up with little or no footfall. In such a situation what can developers do? Should they continue to flog a dead horse, or are there other completely off-field solutions?
Let us first revisit the positives the asset has.
Though not as easy as it sounds, the developer may eventually have to consider the repurposing option. This means bringing multiple authorities on board. The new user/users have to be identified. And finance needs to be arranged. The familiar revenue model that the developer has used all these years may need radical reworking. Of course, where the property is already written off the decision becomes slightly easier.
Once decided, a whole variety of options that make business sense could be considered. Here are just some suggestions. Any of these or combinations of them could be looked at, and would require clever remodelling of the structure based on the new purpose. There could be a ton of ideas, so please feel free to add your own suggestions.
A city college or university, with lecture rooms, meeting rooms, offices, and even indoor playing areas like basketball, volleyball, badminton, a gym, and a food court. You could even imagine locating a number of major coaching and training centres.
A wellness or health centre with a number of clinics and related businesses like hair transplant, cosmetic surgery, dentists, IVF services, testing labs, Ayurveda and yoga centres, etc. Or, it could even become a hospital, with wards, theatres, outpatient rooms, laboratories, offices and other departments.
The home for a large organisation such as a BPO, or a FinTech or an insurance company, with enough space for their large teams, training facilities and technical equipment. A specialised centre, for art, dance and design studios, extensive gaming centres with robotics and maker facilities. Expansive food courts with children's entertainment and play areas could be added along with multiple restaurants and cafes, creating a fun family destination.
A shopping centre for specific types of products or products, for example, auto parts, electricals like fans and fixtures, building materials, perhaps even showrooms for new or used cars and two-wheelers, or furniture. In a multilevel property, there could be one or two floors for each of the above categories. A citizen service centre with banks, a post office, couriers, Aadhar and Pan Card centres, driving licences, perhaps a passport office, or visa offices for various countries.
As the ultimate expression of the new economy, it could house multiple cloud kitchens to feed the home delivery network, with enough space to park the battalion of delivery bikes and for the drivers to rest. Or convert it into a logistics or fulfilment centre for e-commerce companies. Amazon has already taken over old malls and converted them into warehouses and fulfilment centres in the US. Perhaps the new ONDC (Open Network for Digital Commerce) the government’s alternative to the large e-commerce stores like Amazon and Flipkart, could find appropriate locations for their fulfilment centres.
Of course, it is now established that large structures can be demolished, albeit with the professional use of explosives and without the use of bulldozers and other equipment. There may already be discussions happening in boardrooms considering the possible levelling of dead assets to redevelop the flat ground afresh.
That would be interesting.
With over 30 years’ international experience in marketing, managing brands, retail and e-commerce businesses, the writer comments and consults in these areas.
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