Inorbit Malls seeks industry status

In last two years, market had turned from being optimistic to cautious due to rising interest costs, economic slowdown across all sectors

Inorbit Malls managing director and CEO Kishore Bhatija has sought 'industry status' to malls as this would help them raise capital to fund new projects and cope with challenges. Apart from this, any effort towards earmarking land exclusively for malls would help arrest the rise in land prices thereby aiding sustainable growth in the business.

"We have been making representations to the Reserve Bank of India and commerce ministry on according the industry status. Also, we're approaching the respective states on the regulatory delays in the project approvals to avoid cost overruns," he said here today.

In the last two years, the market had turned from being optimistic to cautious due to the rising interest costs and the economic slowdown across all sectors, said Bhatija. Inorbit Malls is a subsidiary of K Raheja Corporation.

Nevertheless, considering the potential for organised retail -- with a share of 6-7 per cent in the country -- Inorbit is planning to open its Vadodara mall in August. It also plans to open a second mall, which could be finalised in the next fiscal, in Hyderabad. The company owns land at Pocharam here and plans to exploit.

It is also considering opportunities to step into Visakhapatnam, Chennai, Coimbatore, besides opening new malls in Pune, Bangalore. "We are also open to opportunities in developing greenfield ventures and acquiring operational malls in the country. At present, a mall of 400,000 sft involves an investment of Rs 350-400-crore depending on the real estate prices," said Bhatija.

He said their major source of funding was banks and internal accruals.    

The company saw a 24 per cent rise in trading volumes in Hyderabad during May 2013  in comparison with the same period a year ago. Footfalls increased 45 per cent during the same period as against a year ago. The surprise growth in May was attributed to a cut back in holidays by high discretionary consumers due to the rise in dollar.

On the company's growth model, Bhatija said: "To stay profitable, we have been focusing on performance-based revenues in contrast to overdependence on mall rentals. As part of this, we advise retailers to concentrate on mall space rationalisation." This helped the company achieve break-even within 1-2 years, he said.