Gyms As A Mixed-Use Tenant Strategy In Malls

One of the aspects that attract customers to a mall is a wide range of interesting stores and services. Many malls in India are today facing a crunch in terms of footfalls and occupancy rate, and the reason often is that, with most malls offering more or less the same brands and stores, visitors are not finding any differention. The vistors therefor look for convenience and ambience and some of the well tenanted malls may loose out on these
foot falls.

The main focus of all mall developers is to lease (or sell) out the spaces in the mall quickly and at the most profitable rates. What sets the more successful ones apart is a more imaginative tenant mix and a better differentiation strategy accurately tailored to location and catchment. An interesting selection of tenants is crucial in various ways, not least of all in terms of defining the kind of visitors that will be attracted to the mall.

Many owners or vacancy-plagued malls in India have now discovered that including non-retail tenants such as fitness clubs, spas, travel agencies, vacation brokers and car servicing centres is a very effective strategy. Gyms, in particular, are a unique category of tenants that brings several advantages with it. For many retail landlords they are, in fact, a cavalry riding to the rescue.

In the first place, inviting gyms to occupy space in a mall can quickly and effectively offset the pull-out of traditional retailers. Secondly, since fitness regimens are regular and planned activity, having a gym in a mall increases visibility for other stores.

Thirdly, gyms use up space which is generally not usable by other categories, such as non-prime spaces on higher floors in malls or the by lanes of high streets.

Fourthly, gyms also act as magnets for locals and operate at all hours. Gymming is not an impulse activity but a planned one. Nevertheless, other tenants close to them who are dependent on impulse shopping get eyeballs throughout the day as well as late in the night. Importantly, gym clients tend to come during the slow hours when parking is available, thereby driving footfalls even at non-optimal times. This can and often does lead to an increase in pre-meditated shopping decisions where the impulse factor has failed.

Gyms do not clash with surrounding stores and often complement them very favourably - such as in the case of sports clothing of health supplement stores. Further, leasing spaces to a health club or gym makes financial sense as the rents such outfits pay are comparable or only slightly lower than those paid by big-box retailers.

Shubhranshu Pani, 
Regional Director - Retail Services, JLL India

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