E-commerce giant Amazon is likely to occupy prime commercial space which has been vacated by nearly all brands in Inorbit mall on the Pune-Ahmednagar road, according to sources. It was not known how much of the available 5.5 lakh sq ft in the mall Amazon was likely to take, or whether it would take it on lease or buy into the property, which could be worth close to Rs 400 crore.
Though Amazon did not officially confirm or deny the development, it is believed that it will use the space to expand its IT and customer service operations. The rear part of the building is an IT park, which has already been leased to Amazon and from where it operates its customer service centre (back office).
All brands in the mall, barring three, have already either relocated or shut down operations.
Of the three that are still operating, Shoppers Stop and Hypercity are in-house brands of K Raheja Corp, the entity that owns Inorbit. They will also move out within a month. The third one, apparel store Max, will relocate by the end of next week, it is learnt.
The four-screen multiplex, PVR Cinemas, and the food court on the third floor will continue operations for now. K Raheja Corp reasoned that it is shutting down operations due to an oversupply of malls in the area. Area-wise, Inorbit was among the largest malls in the city.
"The city has witnessed an oversupply of retail real estate space in one micro-catchment (eastern corridor) wherein 74% out of the current 7 million retail sq ft real estate space of the city is located. This has resulted in an oversupply leading to a division in consumption and hence making stores unviable," said Rajneesh Mahajan, executive director, Inorbit Malls.
Mahajan said the plot has two independent buildings — the front one being the mall and the rear one the IT park that has been leased to Amazon. "There is no transaction with them (Amazon) for the mall building," he claimed.
"We do not comment on what we may or may not do in the future," said an Amazon India spokesperson in response to a query if the e-commerce giant was planning to expand operations in Pune and set up base in the mall.
A senior analyst with a leading real estate firm said, "Inorbit will soon be converted into commercial office space. Amazon might be evaluating this option like few other clients. However, as per market information, they have not yet signed anything with Inorbit. The average commercial rate in the vicinity will be in the range of Rs 7,500-8,000 per sq ft."
Shops selling different brands were first told that they might have to move out in the first week of September, but many actually moved out in the last fortnight to a month. Even the ones in the food court at the mall seemed uncertain about their future.
Sources said that in the case of Inorbit, the mall occupancy did not reach even 75% since it began operations in 2011. Experts say that even a 75% occupancy might not help malls such as Inorbit in an area where there is an over-concentration of such establishments.
"Our team has put in a lot of efforts in the last five years to achieve a growth rate that has now put us in a good position," said Rajiv Malla, director, Phoenix Marketcity. The Phoenix mall is located just opposite Inorbit and is believed to be doing better than most peers. Malla said his mall is over 90% occupied and has clocked a growth rate of 15-20% per year for the last two years in terms of space consumption.
A recent report by real estate research and broking firm Cushman and Wakefield (C&W) showed that even as a fifth of Pune's malls remained unoccupied, the city was second only to Delhi in terms of fresh mall space added (0.8 million square feet) in the January-June period of 2016.
Courtesy:- Times of India.
Though Amazon did not officially confirm or deny the development, it is believed that it will use the space to expand its IT and customer service operations. The rear part of the building is an IT park, which has already been leased to Amazon and from where it operates its customer service centre (back office).
All brands in the mall, barring three, have already either relocated or shut down operations.
Of the three that are still operating, Shoppers Stop and Hypercity are in-house brands of K Raheja Corp, the entity that owns Inorbit. They will also move out within a month. The third one, apparel store Max, will relocate by the end of next week, it is learnt.
The four-screen multiplex, PVR Cinemas, and the food court on the third floor will continue operations for now. K Raheja Corp reasoned that it is shutting down operations due to an oversupply of malls in the area. Area-wise, Inorbit was among the largest malls in the city.
"The city has witnessed an oversupply of retail real estate space in one micro-catchment (eastern corridor) wherein 74% out of the current 7 million retail sq ft real estate space of the city is located. This has resulted in an oversupply leading to a division in consumption and hence making stores unviable," said Rajneesh Mahajan, executive director, Inorbit Malls.
Mahajan said the plot has two independent buildings — the front one being the mall and the rear one the IT park that has been leased to Amazon. "There is no transaction with them (Amazon) for the mall building," he claimed.
"We do not comment on what we may or may not do in the future," said an Amazon India spokesperson in response to a query if the e-commerce giant was planning to expand operations in Pune and set up base in the mall.
A senior analyst with a leading real estate firm said, "Inorbit will soon be converted into commercial office space. Amazon might be evaluating this option like few other clients. However, as per market information, they have not yet signed anything with Inorbit. The average commercial rate in the vicinity will be in the range of Rs 7,500-8,000 per sq ft."
Shops selling different brands were first told that they might have to move out in the first week of September, but many actually moved out in the last fortnight to a month. Even the ones in the food court at the mall seemed uncertain about their future.
Sources said that in the case of Inorbit, the mall occupancy did not reach even 75% since it began operations in 2011. Experts say that even a 75% occupancy might not help malls such as Inorbit in an area where there is an over-concentration of such establishments.
"Our team has put in a lot of efforts in the last five years to achieve a growth rate that has now put us in a good position," said Rajiv Malla, director, Phoenix Marketcity. The Phoenix mall is located just opposite Inorbit and is believed to be doing better than most peers. Malla said his mall is over 90% occupied and has clocked a growth rate of 15-20% per year for the last two years in terms of space consumption.
A recent report by real estate research and broking firm Cushman and Wakefield (C&W) showed that even as a fifth of Pune's malls remained unoccupied, the city was second only to Delhi in terms of fresh mall space added (0.8 million square feet) in the January-June period of 2016.
Courtesy:- Times of India.
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