From factory outlets to hypermarket, developers and retailers are exploring out-of-town retail in Ahmedabad to counter growing operation costs within the city. According to players and industry experts alike, out-of-town retail is only set to grow even as space saturates within the city.
"Increasingly real estate developers and retailers are looking for out-of-town properties in locations which are in line for anticipated growth as indicated by the directions in which the city is expanding. In Ahmedabad, such areas are SG Highway and the Sardar Patel Ring Road wherein malls and upcoming residential townships like Agora Mall, Applewoods and Shantigram offer such potential," said Neeraj Tomar, head - Ahmedabad operations, Jones Lang LaSalle India (JLL) India.
At Applewoods, being developed by Sandesh Group, the developer is looking at a retail space ranging anywhere between 3000 sq ft and 15,000 sq ft.
"We are looking to cater to residents as well as people visiting from within the city. We are still evaluating the kind of retail formats that could house within the township but there is a potential for out-of-town retail," said Parthiv Patel, director at Sandesh Group.
According to Tomar, out-of-town retail outlets tend to be located in areas close to operational factory outlets and are targeted by customers who are looking for a bigger bang for their buck.
"The idea is to keep the family busy for half or full day. Developers or retailers typically look for properties with low rents, large floor spaces and ceiling height, power back-up and sufficient parking. Easy approachability is important - such locations need to be connected to a national highway and immune to traffic snarls," added Tomar.
On its part, Adani Township & Real Estate is also looking to tap out-of-town retail by attracting retailers in the second and third phase of its Shantigram Township project.
"We have marked out about 30 per cent of the total 40 million sq ft saleable area of the township for retail and commercial activities.
Apart from captive requirement, the retail ventures should be able to act as out-of-town retail and enhance retail demand," said a company official at Adani Township & Real Estate on request of anonymity.
As per industry players and experts alike, the cost of setting up an out-of-town retail also tends to be almost 12-15 per cent less costlier in terms of rental values.
"The real estate tends to be cheaper in out-of-town retail since the city is still growing in these parts. However, the format is more suited for hypermarkets with space ranging from 40,000 sq ft to 100,000 sq ft," added Tomar.
