Mumbai is recently facing a problem when it comes to the mall business. This is because malls are no longer considered as lucrative and as rewarding as they used to be. Moreover, there is heavy investment, high gestation cost, heavy maintenance cost and extremely low returns. The latest casualty of this has been experienced by the mall of Nirmal Lifestyle in Mulund which is also the oldest and the biggest malls in the city. The Nirmal Lifestyle mall was started in the year 2003 after years of hard work put in by Nirmal Builders. The mall was constructed by Nirmal Builders and occupied a space of up to five-lakh-square-foot. The Nirmal Lifestyle mall is currently in a dismantled state. Most of the shops in the mall are soon going to shut down barring just a few retail stores, some eating joints and a multiplex. The inside sources, have even claimed that even these stores and joints have been asked to be vacated once their lease expires. This will cause a situation of absolute unemployment for approximately 5000 people employed in the Nirmal Lifestyle mall.
Why is the mall shutting down?
The Nirmal Lifestyle head, Dharmesh Jain said in an interview that its saddening that they will have to shut down the mall started by Nirmal lifestyle in Mulund. The reason as claimed by him is that the mall has become unviable for them. The rental and maintenance cost is extremely high which often gets out of budget considering the little or no profits they receive from the mall. The market sources of the mall claim that the mall promoters after demolishment process plan to convert the mall into a residential complex. They have even taken the advice of the Nirmal Builders regarding this decision and have received a thumbs up from them. The reason for a positive response of the mall of Nirmal lifestyle in Mulund being converted to a residential complex is the regular and instant cash flows from them. The director of the retail services claimed that constructing a mall is a strenuous job and might require up to 3 years to be set up. This wait for returns often has a negative impact on the company’s growth.
The logical facts behind the shutting down
In 2003, Associated Chamber of Commerce and Industry of India conducted a survey and according to the results they issued a report stating that 52% malls in Mumbai are lying vacant. The area in the mall is massive and is usually occupied by a theatre, few shopping stores and few eating joints, rest of the area remains unused. Moreover, a couple of stores and eating joints are unwilling to set up a franchise in the mall area as they have to pay a heavy rent to the mall owner. Thus, they don’t really take up the mall space in the first place. This vacancy in the mall area can also be attributed to the poor and faulty designs of the mall and also the lack of strong brands to act as attractions. Despite the vacancy the mall operators are forced to pay heavy property tax. This is one of the most negative impacts of setting up a mall. Moreover, the malls face heavy competition from the foreign brands because of which they fail to garner massive popularity. Another significant reason for the decline of the popularity of the malls in Mumbai is the poor parking facility, ill location of the malls and the products and services offered in the mall being very expensive. This is the reason why people don’t really plan to visit malls. Even if they do visit the malls they hardly prefer to purchase anything.
It is sad to know that the Mumbai’s oldest and the famous Mulund’s Nirmal Lifestyle will soon be shutting down. We have tried to dig out all the possible reasons for the demolishment of this mall. It is heart breaking to know that the beautiful mall which is also one of the most popular malls in Asia will no longer be there in few years from now. Let’s wait and see what the builders and the operators of the mall do with the space however our sources have claimed that this space will be used to create a housing complex.