Unitech Ltd is expanding its retail development business and plans to invest around Rs.2,000 crore over the next three years to develop about 2 million sq. ft of premium and luxury shopping malls.
“The road map is to monetize the existing land parcels we have spread across various cities and to also acquire new land to build shopping malls,” said Munish Baldev, Head, Retail, Unitech to reporters.
Baldev said now is the right time for Unitech to grow its retail business because rentals are stabilizing. He added that the firm has the dual advantage of owning land in plenty and good catchment areas in the form of its own residential projects, where shopping centres can be a natural component.
Currently, residential projects account for 70-75% of Unitech’s portfolio and the rest is made up of commercial and retail projects.
Unitech has 1.3 million sq. ft of mall area in New Delhi, Noida and Gurgaon, and is developing another 2 million sq. ft of retail space in cities such as Kochi, Bhopal, Dehradun, Mohali, Lucknow and Gurgaon.
Unitech will employ a lease-cum-sale model for most of its retail ventures, Baldev said.
The company will sell up to 30% of the space in a shopping mall to retail investors—equivalent to the construction cost—and lease out the rest of the area. It has already employed this model in the Gardens Galleria mall in south Bangalore that it is developing with its joint development partner Valdel Group.
Unitech will develop a range of retail formats including malls of 300,000-500,000 sq. ft in cities such as Bangalore, Mohali and Dehradun, Baldev said.
It will also develop high-end luxury malls of 100,000 sq. ft as well as retail spaces of 100,000-150,000 sq. ft that will be part of its housing colonies across cities.
Pani expects realty firms that focus on retail to develop malls of 500,000-700,000 sq. ft in metros and other large cities, and 300,000-500,000 sq. ft projects in smaller cities.
“The rest of them would build what they think suits a particular market and will customize the format accordingly,” he said.
Unitech managing director Sanjay Chandra, also a director at Unitech Wireless Ltd, has been in jail since April pending investigation into his suspected role in gaming the grant of second-generation spectrum and licences to telcos in 2008.
