To beat the high cost of finance and lack of interest among top retailers, developers are now hitting upon novel revenue-sharing schemes. Entertainment World Developers Private Limited (EWDPL) recently announced what it claims is the country’s “first 100 per cent rent free, revenue sharing retail model. Named Treasure Showcase, on offer are 20 malls in 11 states with a space of 1 million sq.ft. in cities like Mohali, Lucknow, Agra, Bareilly, Udaipur and Bhilai. They will hawk apparel, footwear, electronics, food, cosmetics, jewellery and furnishing.
For starters, there is no rent, no CAM, no deposit, and no maintenance for the booked space. The Group is expecting a revenue generation of over 500 crore by 2011. “The concept is based on a transparent, pre-determined, margin sharing revenue model,” said Manish Kalani, managing director of EWDPL.
Incidentally, the revenue-sharing model is not unique to private projects. Last year, the National Highway Authority of India (NHAI) had awarded three mega projects worth Rs 2,150 crore over 215 km on this model, to beat the steep cost of finance in a slow market and delays by builders. The projects on this model include the Gonde-Nashik-Pimpalgaon stretch, MP-Maharashtra border Dhule project and the Kishangarh-Beawar projects.
Experts contend that this model makes sense when developers see strong prospects of market improvement. Besides creating interest among retailers, this also gives mall developers the leeway to earn more. Fixed rentals could be a dampener, especially where retailers have agreed to increase rentals only by 10-15 per cent every year.
“For upcoming malls, indications are that the rent to revenue ratio would see a dip from 40-50 per cent to 25 per cent in the next few months,” says J Suresh CEO of Arvind Brands, that markets international brands such as Arrow, Gant, Cherokee etc.
hyderaba properties, properties in hyderabad, hyderabad city,
No comments:
Post a Comment