Developers Are Eyeing Tier-II and Tier-III Cities For Building Grade-A Malls
In the Big Billion Days sales of Flipkart, much of the profits came from Tier-II and Tier-III cities. This is a clear signal that small cities are becoming more important in the retail sector. Economic growth in the recent past makes these areas more promising, as far as the real estate and retail sector are concerned.
People have started accepting the fact that smaller towns and cities are the next destinations for everything, be it the real estate sector or the consumer goods industry. Tier I cities have reached a saturation point, and everyone is targeting customers in smaller cities. These cities did not get much attention earlier, but now they too have jumped on to the growth bandwagon. If a good mall is built in a tier III city, this will give more options for residents while simultaneously allowing renowned brands to enter the city. Many good brands are unable to enter small cities because of the lack of quality retail spaces.
There are other reasons to target Tier II and Tier III cities. Tier I cities were the first to experience the best malls, but soon people found the trend too repetitive. As the number of malls in large cities is growing, their performance has declined. Old markets, however, are regaining popularity.
The best examples of old markets regaining popularity are best visible in tier I cities which were the first to witness the mall culture. At first, the entire crowd was drawn out towards these malls but after a point, they started losing their charm because of lack of dynamism. Small differences differentiate a superior mall from an average mall. This lackluster was more than enticing to ensure people turning back to old markets that had stepped up their preparedness in order to cater to modern day visitors and their demands.
Malls and other commercial establishments need a radical approach to attract customers, and this can be done only through a properly planned and systemised approach. Work has to flow steadily, and the structure needs to be sturdier than normal. You also cannot expect to do the construction in phases because the entire property has to be thrown open all at once to the public. If the construction is not progressing at a good pace, this might turn off some investors who may be planning to invest in the property. This may result in unsold inventory in the longer run. With the scale of financing involved, not every developer can generate sustainable funds over a long period of time without expecting quick results.