The emergence of mixed-use retail formats in India
The reason why mall developers are nowoffering space to hotels has more to do with the floor space index (FSI) and less with utility. In the case of retail, food, entertainment and multiplex, it is not always possible to utilise the complete FSI of the plot.
The concept of mixed-use development with retail, entertainment, shopping and accommodation all under one roof helps diversify the tenant mix in the total construction, and also de-risks the developer°Įs investment. It also allows the developers to utilise the FSI and location.
Such developments leverage on the location and provide multiple solutions under one canopy.
Mixed-use developments have evolved to increase the viability of projects and to utilise the location advantage. Residential and office markets are witnessing buoyant growth and are considered as relatively more risk-free development.
A new concept which is also evolving, particularly due to FSI norms, is serviced apartments as an offering within mixed-use developments.
Malls have a good reason to give space to hotels or office complexes:
°Ů It increases the viability of project and de-risks it;
°Ů It helps utilise available FSI optimally;
°Ů It makes the usage relatively more diverse°™in some cases mixed use
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