Although there has been a remarkable improvement in organised retail and shopping centres in India, implementation of retail asset management can eradicate all challenges in the industry Within a decade India’s retail and shopping centre sector has rapidly evolved due to the strong economy, favourable demographics, surging wealth levels and changing lifestyles. This has been manifested in the remarkable growth of new shopping centres that has a glamorous imagery and has launched a number of new retail formats in small and big cities.
“Retail Asset Management (RAM) is a comprehensive practice, which focuses on both macro and micro level functions of managing a shopping centre as well as creates a platform to achieve long and short term goals which affect a shopping centre’s operations, market position and ultimately its long term value,” says Lt Col (Retd) Ashutosh K Beri, managing director - property and asset management of Jones Lang LaSalle Meghraj Building Operations (JLLM), a global retail advisory firm based in Mumbai.
 Challenges facing retail and shopping centres
Some of the key challenges facing the Indian retail and shopping centre sector include:
· Ever increasing competition from existing and new generation shopping centres
· Changing demand preferences of customers requiring clear focus on customer needs and value adds
· Requirement for shopping centres to also start performing as investment grade assets
· Consistently maintaining cost competitiveness
Solution to the challenges
An innovative and integrated approach is required in order to plan, build and manage such projects. Therefore, one should consider shopping centres as “assets” with an objective of ensuring long-term performance over a lifecycle. The process of delivering such projects requires an “asset management” platform that provides a framework for attaining the objectives of such projects. Globally, such an approach which utilises an incorporated management platform to plan, deliver and manage shopping centre projects is termed as RAM.
“Today, RAM is rapidly becoming an integral part while planning and designing shopping centres across the country. This will further help the shopping centre developers to improve shopping malls by providing better facilities and also boost the sales of retail products available in the malls,” says Hitesh Sahni, managing director of HSN Realty, a mid-sized real estate firm in New Delhi. The developments in the domestic shopping malls will also help to strengthen India’s position in the global shopping centre sector.
Functions of RAM
The main functions of retail asset management are defined as follows:
• Retail management
• Marketing management
• Financial management
• Property management
Significantly, when these functions are undertaken in an integrated way, they adopt a strategic life span approach and look to boost the financial returns of a retail asset.
The engagement with retail stores continues in the post-occupancy phase through the constant evaluation of retail store performance, identifying successful and unsuccessful zones within a shopping centre, and thereafter, proactively managing the store churn and releasing so that the centre performance is optimised. This is typically delivered through a structured programme known as the “retailer development programme.”
As the country’s retail sector matures and moves along a growth trajectory supported by the next generation of shopping centres, RAM would inevitably enable the lifecycle development of world class “investment grade shopping centre assets.”
Sabrina Mitchell |
