Rachna and Arun Sirdeshmukh are eagerly looking forward to 2008, even though they are barely three months into this year.
That’s when they and their two young children will move into a four-bedroom apartment in Prestige Shantiniketan, at Whitefield to the southeast of Bangalore.
It’s not just any other apartment, though. It is part of a 105-acre complex, an integrated township which will include a 350-room Radisson Hotel, three million sq. ft of commercial and office space, retail and multiplex facilities in addition to 3,000 apartments.
“As a working mother, it is wonderful to know that, once back home, we won’t need to wade through Bangalore traffic to catch a movie, eat out or visit friends,” says Rachna.
Mixed-use property development is emerging as a prominent feature of fast-paced urban living and Bangalore is leading the way. Similar developments are expected to crop up in some Delhi suburbs, where companies are acquiring land to build special economic zones.
In Mumbai, a greater scarcity of land may lead to amenities being bunched closer together, leading to something similar to mixed-use developments without actually being planned that way, says Sanjay Verma, joint managing director of real-estate consultant Cushman & Wakefield.
In Bangalore, however, at least 10 such properties will be in use by 2008-end. In the central business district, UB City, a 1.3-million sq. ft campus with a 250-room Marriott hotel, a mix of high-end retail, serviced apartments and office space, will open for use next year. The MBD Zephyr mixed-use project in Whitefield will bring in global luxury retail brands such as Gucci, Versace, Chanel, Christian Dior and Louis Vuitton. Other mid-range brands such as Mango and Marks & Spencers will be in the premium end of the enclave alongside multiplexes with platinum- and gold-class seating, galleries and studios to showcase art and fashion and a luxury boutique hotel.
In northwest Bangalore, Brigade Gateway, dubbed as a lifestyle enclave with 7.5 lakh sq. ft of retail space, a Sheraton Towers hotel, Columbia Asia hospital and 1,200 apartments will be ready in 2009.
“World over, mixed-use realty grows in waves beginning with small 10–20 acre campuses with a club house, apartments and offices moving to 100-acre campuses offering high-end retail, entertainment, office and living space with top-line luxury brands housed close-by,” says Ankur Srivastava, managing director, DTZ Debenham Tie Leung, a property research firm.
Rising affluence and the search for convenience are the two major factors driving this demand for mixed-use real estate complexes.
In Bangalore, a city that has transformed from a retirees’ paradise to an information technology (IT) hub in a decade, the average IT worker earns a salary of Rs6 lakh by the time he is 27 years old and expects to earn Rs36 lakh, a sixfold increase by the time he is 37 years old. That’s leading to a boom in housing that caters to the needs of young high spenders who will push the envelope for a better lifestyle.
“Mixed-use realty is more an answer to consumers’ demand for convenience and luxury than a product push from developers,” says M. R. Jaishankar, managing director, Brigade Group, a realty development company that has two such projects in the pipeline.
As commercial office space shrinks in the central business district, corporates are moving to the suburbs, raising average commute time from 30 minutes to over 90 minutes. A large number of IT workers also spend between two months and four months in a year at client locations overseas. “Security and entertainment for the family left behind becomes a prime consideration,” says Srivastava.
In an integrated complex with social infrastructure like parks, sports arenas, movie halls, retail stores and hotels, there is no need to leave home after hours. Says Sirdeshmukh, “apart from commuting to school, my children don’t ever need to leave the campus as there are multiple options to keep them engaged.” And families like theirs are willing to pay a little extra for that.
“There is a premium of Rs500–800 per sq. ft for a residential unit in a mixed-use campus, compared with a similar apartment in a pure residential complex in the same area,” says Mayank Saksena, head–Retail Service Group, Trammell Crow Meghraj, a property consultancy firm. Buyers are also willing to pay a premium of up to 10-15% for space in complexes developed by reputed builders, as they will attract more top-end buyers. That includes retailers who want to bring their products to the consumer’s doorstep, literally.
Says Jaishanker Subramanium whose lifestyle brand Landmark has just signed up for 1.5 lakh sq. ft of retail space at Brigade Gateway: “Traffic problems are the biggest issue for retailers today when they scout for locations”. Placing a store in a mixed-use project guarantees a certain amount of footfalls, as they offer a captive consumer base with high disposable incomes, making them attractive to retailers.
Over time, these campuses turn into lifestyle destinations drawing visitors as well as residents.
FFolio, a Bangalore-based store that is regarded as the city’s first designer outlet had a high-street address for over a decade, before a second store came up in the Leela Galleria, an upmarket hotel-cum-retail and leisure destination.
Says Sanjay Shroff, founder partner FFolio, “Bangalore is now a mature retail location, people have bought their homes and cars and are looking for luxury spending options.”
The heady mix of opulent shopping and leisure pursuits in a mixed-use real estate complex is proving to be the go-to destination in a city poised for exponential growth.