Densification projects for Inorbit assets have already started. Hyderabad will add about 100,000 sq. ft of retail space with a host of ultra premium first in market brands in the first quarter. The brand is focussing on larger projects and aims to grow from 2.2 mn sq. ft to 5.5 mn sq. ft in 3-4 years.
Rajneesh Mahajan, the CEO of the Inorbit malls, needs no formal introduction. An industry veteran, with more than 20 plus years of experience, Mahajan is one of the popular and familiar names in the retail real estate industry.
He began his journey with Inorbit Mall as Vice President Leasing in the year 2009. During his ongoing stint with the organisation, he ascended from Vice President to COO to Executive Director to his current role as CEO. He was appointed CEO in the year 2017, and since then he has been a true leader for the team and the brand. His equanimity, insights, people management skills and his incredibly positive attitude about everything makes him different from the rest.
He has played a key role in planning and implementing strategies and his valuable contribution is reflected in the organization’s ongoing mission of creating an enhanced customer experience. In addition to this, he has been a speaker at some of the most prestigious national & International retail forums and won several awards and accolades.
Prior to joining Inorbit, Mahajan has worked with Barista Coffee Company and Cushman & Wakefield. Mahajan holds a Bachelor’s Degree in Science from Punjab University, an MBA, and a Post Graduate Diploma in Marketing and Finance from the ICFAI Business School.
In an exclusive interaction with Shopping Centre News, Rajneesh Mahajan talks about the paradigm shift in the retail real estate industry in the pre and post pandemic era.
Tell us about the paradigm shift in the retail real estate industry lately. How has it changed in the pre and post pandemic era?
The pace of the post pandemic recovery was a pleasant surprise for many of us. 2022, was a year of recovery and close to Diwali, we were back to our pre-pandemic numbers. Premiumisation is the big change that we are witnessing currently. The customers are happy to pay higher prices for premium products and better quality.
How has this current state impacted the progress of commercial retail infrastructure (shopping malls) to be precise in India? How do you see Inorbit malls making an impact on it?
A lot of projects that were stalled due to the pandemic are getting delivered or will be delivered soon. This has led to supply being higher this year and is estimated to be around 11 mn sq. ft. There is a lot of enthusiasm among retailers to open more and bigger stores and with more retailers coming to the Indian market, we are all clearly chasing demand.
The growth plans for Inorbit malls include densification of our current assets as well as green field projects. We will play a significant part in this growth story. The focus is on responsible, inclusive and sustainable growth.
How do you analyse these changes and trends going forward? Your views.
Urbanisation and premiumisation are the big drivers of the Indian retail growth story. We believe that there is a lot of opportunity in the Tier II & III markets for premium retail space. The dynamic between fast moving customers and retailers is leading to an increase in demand for premium retail space.
Consumer shopping behaviour is set to change further, as we have been in this pandemic situation for three years now. How do you see this challenge from the retail real estate perspective? Tell us about the impact associated with it, going forward?
Real estate projects are capital intensive with longer gestation cycles. There is a surge in new projects across the country driven by current customer demand. We need to ensure that this growth is sustainable and doesn’t lead to over planning and over development.
For smaller brands with less capital or risk-tolerance, what can be a popular choice for them without the risk of a long-term lease or the challenge of sourcing real estate and hiring retail staff?
Retail is a complex business where one of the biggest challenges is to keep things simple and delivering good customer experience consistently. Smaller brands should ensure that they go for tighter spaces with optimal plans. They should follow a hub and spoke model and stabilize their business first and then take firm steps to grow.
With the roller coaster ride for Indian retail real estate, what are the strategies with respect to real estate one can take to cope, mitigate, and quickly recover from an impending crisis, if there is one?
Understanding our consumers and focusing on the tenants with whom we have built strong partnerships is one of our most important levers. Thanks to our group, we are in a financially stable environment and that is a strategic advantage in economically challenging times. Real estate is a capital-intensive business, and we believe that good fiscal is important for stable growth.
Tell us about the expansion plan. Please highlight the status of upcoming projects along with the new projects in the pipeline.
We are going to be an integral, responsible part of the India retail growth story. Inorbit is planning 1 mn sq. ft every year from 2025 for 5-7 years. Densification projects for all our current assets have already started. Hyderabad will add about 100,000 sq. ft of retail space with a host of ultra premium first in market brands in the first quarter. We are focussing on larger projects and will grow from 2.2 mn sq. ft to 5.5 mn sq. ft in 3-4 years’ time.
Multiple brands have become sensitive to climate change and are taking measures to reduce carbon footprint, how can real estate focus to meet this demand of retail?
Being cognisant of climate change is the need of the hour and world over, steps are being taken to mitigate the effects of the same. As real estate companies, the onus should be on attempting to reduce the carbon footprint as much as possible at all levels by implementing green building practices, upgrading existing infrastructure to make it environmentally compliant, using sustainable options and encouraging sustainable behaviour as much as possible while focusing on waste reduction backed by efficient waste management. At Inorbit Malls, we truly believe in a sustainable growth model which has genesis in the company’s robust ESG strategy.
During the pandemic multiple brands turned online. Would we see digital brands gradually find unique ways to build their physical presence, whether through opening a store, hiring a ghost retailer, or partnering with a department store?
Brands have become increasingly agile in understanding consumer behaviour. As the pandemic eased out, consumers who were cooped up within the four walls of the houses started yearning for a physical shopping experience like never before. This pent-up demand has been quickly gauged by brands and has led to a lot of them changing their strategy to an omnichannel one. We have witnessed this phenomenon at our malls as well with brands such as Lenskart, Nykaa and Bluestone among others opening their physical stores. While online retail has advantages of its own, the tactile experience of being able to see, touch and feel products will remain and so will the significant role played by physical stores.
With traditional brands, digital commerce is never going to completely outmanoeuvre its physical counterparts. What innovations and ideas can we witness with respect to experiential retail which shall not only focus on shopping but also on rendering an engaging experience to the visitors?
Malls are now aspirational social spaces that offer customers many more experiences than just shopping. From wonderful décor to high energy concerts, malls oƦ er visceral engaging experiences that leave customers delighted. Social interactions are a part of the human fabric and malls help enhance them.
Where do you see the Indian retail real estate industry in three years from now on the parameters of growth, vision and goals?
As pointed out earlier, the future of the Indian retail industry looks bright and promising in terms of growth while the vision will be to focus on creating a seamless and integrated shopping experience for customers. Retailers and mall developers are expected to invest in technology and innovation to enhance the shopping experience, including contactless payments, virtual reality, and augmented reality. At the same time, in terms of goals, we will be looking at creating sustainable and eco-friendly malls, increasing footfalls, and enhancing profitability.
