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How To Start A Shopping Mall Business in India – Complete Guide

The shopping mall is an emerging and lucrative business in India. However, the business demands the right strategic planning with financial and marketing planning. Here in this article, we intend to explore the steps to follow to start a shopping mall business in India.

Nowadays, the shopping mall is not a business only for metropolitan cities. This big retail business venture is fast becoming successful in Tier 2, and Tier 3 cities, and small towns as well. If you have a good location with sufficient capital to invest, you can think of opening a shopping mall. However, there are a lot of other factors that you must consider before starting this business.

Is the Shopping Mall Business Profitable in India?

Shopping malls are gaining tremendous popularity these days. And definitely, there are several reasons behind it. According to retail industry experts, the demand for the mall will increase in the coming years. And we can expect significant growth in the shopping mall business throughout the country.

Generally, shopping malls offer a comfortable and luxurious shopping experience. Additionally, a mall offers a lot of activities and means of entertainment. Apart from the shopping, it offers movies, a games plaza, a banquet hall, a food court, and enormous events throughout the year. As a result, shopping malls are becoming popular hangout destinations for city residents.

10 Steps to Start a Shopping Mall Business in India

pic of a shopping mall

1. Market Research and Feasibility Study

Conduct thorough market research to identify potential locations, target demographics, and competition. Analyze consumer preferences, purchasing behaviour, and demand for retail spaces in the selected area. Assess the feasibility of the project by evaluating factors such as population density, economic growth prospects, infrastructure development, and regulatory environment.

2. Business Plan Development

Develop a detailed business plan outlining the objectives, target market, value proposition, revenue model, operational strategy, and financial projections for the shopping mall. Define the mall’s concept, theme, and tenant mix based on market research insights and consumer preferences. Determine the size and layout of the mall, as well as the amenities and facilities to be provided.

3. Secure Funding

Estimate the initial investment required to acquire land, construct the mall, and cover pre-operational expenses such as licensing, permits, and marketing. Explore financing options such as bank loans, equity investment, or partnerships with investors or developers. Prepare a comprehensive financial model highlighting projected revenues, expenses, and return on investment (ROI) to attract potential investors.

4. Site Selection and Acquisition

Identify suitable sites for the shopping mall based on location, accessibility, visibility, and proximity to residential areas, commercial hubs, transportation hubs, and major thoroughfares. Negotiate with landowners or developers to acquire the land or enter into lease agreements for long-term development.

5. Obtain Necessary Approvals and Permits

Obtain the required approvals, permits, and licenses from local authorities, municipal corporations, urban development authorities, and regulatory bodies for land acquisition, construction, environmental clearances, fire safety, building codes, and zoning regulations. Ensure compliance with applicable laws and regulations governing real estate development and commercial operations.

ReadHow to Register a Company in India

6. Design and Construction

Hire experienced architects, engineers, and construction contractors to design and build the shopping mall according to the approved plans and specifications. Focus on creating a visually appealing, functional, and efficient layout that maximizes retail space, enhances foot traffic, and provides amenities such as parking, landscaping, security, and utilities.

7. Tenant Acquisition and Leasing

Attract reputable retail brands, anchor tenants, speciality stores, entertainment venues, restaurants, and service providers to lease space in the shopping mall. Develop attractive leasing packages, negotiate lease terms, and sign agreements with tenants based on rental rates, lease duration, tenant improvements, and revenue-sharing arrangements.

8. Mall Management and Operations

Establish effective mall management systems and procedures to oversee day-to-day operations, maintenance, security, cleaning, tenant relations, marketing, and customer service. Hire qualified staff, security personnel, maintenance crews, and service providers to ensure smooth functioning and a positive shopping experience for visitors.

9. Marketing and Promotion

Implement a comprehensive marketing and promotional strategy to create awareness, generate footfall, and drive sales at the shopping mall. Utilize a mix of traditional advertising, digital marketing, social media engagement, events, promotions, loyalty programs, and partnerships to attract shoppers, enhance brand visibility, and foster customer loyalty.

10. Monitor Performance and Adaptation

Regularly monitor key performance indicators (KPIs) such as foot traffic, occupancy rates, sales per square foot, tenant turnover, customer feedback, and financial metrics to assess the mall’s performance and identify areas for improvement. Continuously innovate, adapt, and optimize operations to meet evolving market trends and consumer preferences.

Cost of Starting A Shopping Mall In India

There are various types of costs when you are building a mall or shopping center. The entire process starts with market research and ends with marketing and maintenance. The start-up investment will also depend on the size and location of the shopping mall. Here we put some of the basic input costs to open a shopping mall.

  • First of all, you must do some market surveys or market research. It helps in making an informed decision. Therefore, it makes the project profitable and eliminates the possibility of failure.
  • Finding the location and acquiring the land. You must be prepared to invest a considerable amount of investment. The right location is extremely critical for the success of a shopping mall business.
  • After that, you will need to create an architectural drawing and design including the estimate. And definitely, this costs a lump sum amount. In the designing part, there are several design formats. And you have to create those formats for permission from the authority. It includes the site map, elevation, structural design, electrical design, overview, etc.
  • After getting the plan, the next part is sanctioning the project from the corporation or Municipal authority. And here, you will need to pay the fees.
  • Next is the construction cost. It includes material costs, labour charges, and consulting costs.
  • Additionally, you must prepare the interior of the mall. It includes a ceiling, flooring, toilets, doors, windows, lighting, air conditioning, etc.
  • Furthermore, there are some costs for the exterior facilities. Here the list includes pavements, security room, parking space, landscaping, etc.
  • After building the complete infrastructure, some costs are required for marketing and promotion.
  • For running the mall, you will need to employ employees. According to the size of the mall, this cost varies.
  • And finally, You must have the capital for expenses like maintenance, utility bills, etc. Because in initiating a shopping mall business you must have working capital for the first 6 months.

Frequently Asked Questions

What is the typical timeline for building a shopping mall from start to finish?

The timeline can vary depending on factors such as land acquisition, regulatory approvals, construction complexity, and tenant leasing. On average, it may take 2 to 4 years or more to complete the entire development process.

How much capital investment is required to start a shopping mall business?

The capital investment can vary significantly based on factors such as land cost, construction expenses, infrastructure development, tenant fit-outs, marketing, and operational costs. A rough estimate could range from several crores to hundreds of crores of rupees.

What are the key factors to consider when selecting a location for a shopping mall?

Important factors include demographics, population density, purchasing power, accessibility, visibility, proximity to transportation hubs, road networks, parking facilities, competition, and potential for future growth.

What are the common revenue streams for a shopping mall business?

Revenue streams typically include rental income from tenants, revenue-sharing arrangements, parking fees, advertising and promotional revenue, event hosting fees, and income from ancillary services such as property management and facility rentals.

What are the legal and regulatory requirements for operating a shopping mall in India?

Legal requirements may include obtaining permits and licenses for land use, construction, fire safety, environmental compliance, signage, food safety, and entertainment licenses for cinemas or event spaces. Compliance with local municipal laws and building codes is essential.

What are the risks and challenges associated with operating a shopping mall business?

Risks include economic downturns affecting consumer spending, changing retail trends, competition from e-commerce, tenant turnover, regulatory changes, security threats, and operational issues such as maintenance and tenant disputes.

Is it advisable to invest in a franchise or partner with a developer for a shopping mall business?

It depends on individual circumstances and preferences. Partnering with an experienced developer or investing in a reputable franchise can provide access to expertise, resources, and established brand recognition, but it’s essential to carefully evaluate the terms and risks involved.

About Next What Business Research Team

The Editorial Staffs at NextWhatBusiness is a team of Business Consultants with years of experience in small and medium-scale manufacturing and service-based businesses.