Emergence of Office-Retail Complexes in Real Estate in India

The concept of Office-Retail Complexes (ORCs) emerged from the need to move ahead from vanilla office buildings to those which offered retail services to support the commercial offices running in the development. The product lifecycle has now reached from a prototype stage to a full-blown version with growing acceptance across the big cities.

Organized retail cannot be constrained to the confines of retail mall developments. With quality malls running at near-capacity, retailers need to look beyond the conventional high streets, which may not offer the same flexibility and scalability as new-age buildings. ORCs are extremely effective at bridging this gap while offering the optimum business opportunity through lower costs and a varied customer base. In fact, ORCs are much more flexible development formats where retailers can look to create bespoke retail formats based on the primary catchment profile.

The most common retail formats in ORCs are the food & beverage segments and banking & financial services. This stems from the fact that eating out and managing personal finances while remaining key concerns of the current working demographic are increasingly being viewed as activities to be managed during breaks from working hours. While other categories are still finding their feet, fitness, fashion, high-end, electronics & gadgets and automobiles should find this format much to their liking through customized offerings based on the profile of the business district and the median income levels prevailing in that location.

While retailers have identified the ORC format as a good alternative, they are more than ever, willing to look at this format with much more interest as in the absence of quality retail space. ORCs offer a higher bang for their buck with comparatively lower rents despite being offered prime ground floor spaces in comparison to premium malls with weekday footfalls and viewership guaranteed to be higher than comparable malls. With the added benefit of nearby residential nodes, such ORCs at their optimum have the potential to operate as standalone retail malls in respect of the lower floors and generate similar footfalls and business incomes for retailers.

This format can offer institutional investors a potentially higher revenue across a diversified tenant base while providing them the key differentiator which may be the ultimate weapon in commercial occupier retention and future rental upside potential.

As retail industry evolves, it is high time that the ORC concept finds greater resonance among developers and retailers. A word of caution, though; quality, location and planning remain key to making this a win-win for developers, retailers and investors.

Team BroEx

BroEx is the largest go-to application platform for Real Estate Brokers to connect with each other to network and collaborate with each other to fulfill their business requirements reliably and quickly.

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