As mall fatigue sets in, DLF eyes IT parks

The synergy between office and entertainment is not a novel concept, even for DLF, as it is building a couple of similar projects in Gurgaon. But it clearly marks a shift in the company’s priorities for now.

Till date, DLF has confined itself to malls and residential complexes in and around Delhi and particularly, in Gurgaon where it had a hand in more than 70 per cent of the first phase of its development. But with what real estate insiders call ‘mall fatigue’ having crept in; DLF was quick to look at other avenues. IT parks seem to have provided the answer and with good reason too, as the company need not shed the idea of malls.

‘‘IT parks are a precursor that allow us to set up a base in a particular city or state. They will be followed by other projects — both retail and residential,’’ Arvind Khanna, Chief Executive-Marketing at DLF said. As examples, he cited the Chandigarh and Bangalore IT parks, where the company would expand by setting up malls in other cities in Punjab cities like Jalandhar, Ludhiana and Bangalore itself.

Besides the expansion factor, DLF has chosen to link IT parks to those cities where software companies find little or no office space, like in Chandigarh. ‘‘Those that have space, will find it difficult to build recreational space for staff, as in Bangalore and Hyderabad. They prefer using space strictly for office work,’’ said Khanna.

Though the software park looks empty now, company officials said they are in talks with six other companies and will have total occupancy in six months. Having invested around Rs 240 crore here, the company is selling space at Rs 25 per sq ft and said it will break even in seven years.

As for malls, despite the fatigue factor, DLF remains enthusiastic. ‘‘Small malls are dying or getting converted into specialty halls because they are being managed poorly. It is critical for malls to reinvent themselves as per the latest trends. For this reason, we are targeting large format malls, where event management will be a daily affair,’’ Khanna said.

Also, the company is eyeing the Mumbai market; reports indicating that it will bid for National Textile Corporation’s two textile mill plots.

(The correspondent was in Chandigarh at DLF’s invitation)