In Kolkata, next year; final talks on with many upmarket foreign brands.
After carving out his share of his father’s business empire, Sanjiv Goenka, the younger son of Rama Prasad Goenka, is set to debut into real estate, with a mall selling “luxury brands” such as Louis Vuitton Moet Hennessy (LVMH), Canali, Salvatore Ferragamo, Gucci and Zegna.
CESC Properties, a subsidiary of the group’s power utility, CESC Ltd, is building the city’s first luxury mall, Spencer’s Galleria. It will house 20 luxury brands, a first for Kolkata.
The mall will be ready by the second half of 2012 and is to be spread over three acres in central Kolkata, with a retail area of 400,000 sq ft.
Sanjiv Goenka, now chairman of what is called the RP-Sanjiv Goenka group, says he guarantees the mall, designed by British architectural firm RTKL and constructed by Larsen & Toubro, would be a destination for people beyond Kolkata. There are, after all, just three luxury malls in India.
“We are speaking to 25-30 brands as of now, and we will secure 20 of them. We will finalise the brands in six months. Four to five have been signed on, which includes Canali and Gucci,” an official close to the development said.
Canali, an Italian luxury brand for men, is represented by Genesis Colors in India. The latter also handles Bottega Veneta, the Italian luxury leather goods line and another potential tenant for the mall. At present, Canali has stores in Delhi, Mumbai, Bangalore and Hyderabad.
Another biggie likely to be signed on is LVMH, the French fashion major, with 50 brands under its belt.
The contender for anchor tenant of the mall is Lifestyle International (P) Ltd, part of the Dubai-based Landmark Group.
“We haven’t tied up with too many brands yet but in the next eight weeks, we will do with quite a few,” Goenka said. “We have not signed with LVMH and Gucci, but final negotiations are on for sure. There will be lots of names which will be firsts here.”
The mall’s revenue model includes a definite minimum guarantee of rentals by the retailer and an upside of revenue sharing.
“There are a lot of high net worth individuals and Marwari families in Kolkata. Also, a growing upper middle class, which is buying luxury cars and owns these products that we are going to bring in now,” said Pankaj Renjhen, joint managing director-retail services, who is handling the mall.
Spencer’s Retail has so far steered clear of the value segment. It makes fine living affordable, it says. Spencer’s has a presence in 45 cities, with 200 stores. It is not clear whether CESC Properties would replicate the model elsewhere in the country. In 2007, CESC, which has both freehold and leasehold land, had valued its real estate assets at Rs 1,170 crore.
Also, Harrisons Malayalam, to be split between Sanjiv Goenka and elder brother Harsh Goenka, has about 20 plantation estates spread over 14,000 hectares.