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DEVELOPMENT ADVISORY SERVICES FOR PROPOSED MIXED-USE DEVELOPMENT PROJECT ON 11.3 ACRES LAND PARCEL LOCATED IN THRISSUR, KERALA, INDIA

FINAL REPORT

SUBMITTED TO

KENZ INN COMMERCIAL COMPLEX LIMITED THRISSUR, KERALA, INDIA

SUBMITTED BY

Jones Lang LaSalle Property Consultants India Private Limited Level 3, Concorde UB City, No. 24, Vittal Mallya Road, - 560 001 Ph : +91 80 4118 2900, Fax: +91 80 4118 2901 Internet: www.joneslanglassale.co.in MARCH 2014

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CONTROLLED COPY

Report for Development Advisory Services for Proposed Mixed-Use Development Project on 11.3 Acres Land Parcel Located in Thrissur, Kerala, India

Submitted to Kenz Inn Commercial Complex Limited Thrissur, Kerala, India

Document Number: 2013/04/DEVELOPMENT ADVISORY/YU/BLR/428

Document Status: Final Report

Date: March 18, 2014

Document prepared by: Abhilasha Bhagat & Y. Umakanth

Document approved by: Girish K. S.

No. of copies circulated: 02

Circulation

Copy 01: Kenz Inn Commercial Complex Limited, Thrissur, Kerala, India Copy 02: Office Copy - Bangalore

Contact Information

For further information please contact:

Mr. Girish K. S. MRICS Local Director - Strategic Consulting Jones Lang LaSalle Property Consultants India Private Limited Level 3, Concorde, UB City, #24, Vittal Mallya Road Bangalore - 560 001 Ph: +91 80 4118 2900, Fax: +91 80 4118 2901 Mobile: +91 9900154567 E-mail: [email protected]

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TABLE OF CONTENTS

1 THE ASSIGNMENT ...... 10 1.1 INTRODUCTION ...... 10 1.2 SCOPE OF WORK ...... 10 1.3 LIMITATIONS TO THIS ASSIGNMENT ...... 11 1.4 DISCLAIMER AND PROFESSIONAL INDEMNITY ...... 12 2 PROFILE OF THRISSUR CITY ...... 13 2.1 THRISSUR SNAPSHOT ...... 13 2.2 REGIONAL CONNECTIVITY ...... 14 2.3 DEMOGRAPHIC CHARACTERISTICS ...... 15 2.4 SOCIO-ECONOMIC CHARACTERISTICS ...... 16 2.5 ECONOMIC CHARACTERISTICS ...... 17 2.5.1 FUNCTIONAL BASE OF THE CITY...... 17 2.5.2 KEY ECONOMIC DRIVERS OF THE CITY ...... 17 2.6 KEY INFRASTRUCTURE INITIATIVES ...... 20 2.7 FUTURE GROWTH DIRECTIONS ...... 22 3 REAL ESTATE MACRO-MARKET TRENDS ...... 23 3.1 GENERAL SECTOR TRENDS ...... 23 3.2 RESIDENTIAL SUB-SECTOR ...... 24 3.3 CORPORATE / OFFICE (COMMERCIAL) SUB-SECTOR ...... 33 3.4 ORGANIZED RETAIL SUB-SECTOR ...... 35 3.5 HOSPITALITY SUB-SECTOR ...... 40 3.6 MICE SUB-SECTOR ...... 41 3.6.1 GENERAL SECTOR TRENDS ...... 41 3.6.2 MICE MARKET - INDIA’S GLOBAL POSITION ...... 42 3.6.3 THE INDIAN CONVENTION INDUSTRY ...... 44 3.6.4 SUMMARY FINDINGS AND OBSERVATIONS ...... 47 3.6.5 CONVENTION INDUSTRY IN KERALA ...... 47 3.6.6 LULU INTERNATIONAL CONVENTION CENTER ...... 49 4 PROJECT SITE ANALYSIS AND DEVELOPMENT CONTROL & REGULATIONS ...... 54 4.1 DETAILS OF THE PROJECT SITE ...... 54 4.2 LOCATION OF THE PROJECT SITE ...... 54 4.3 DESCRIPTION OF THE PROJECT SITE ...... 55 4.4 INFRASTRUCTURE DEVELOPMENT INITIATIVES NEAR THE PROJECT SITE ...... 59 4.5 SWOT ANALYSIS FOR THE PROJECT SITE ...... 59 4.6 APPLICABLE DEVELOPMENT CONTROLS AND REGULATIONS ...... 59 5 EVALUATION OF DEVELOPMENT MIX OF THE PROJECT ...... 62 5.1 PROPOSED DEVELOPMENT MIX ON THE PROJECT SITE ...... 62 5.2 MARKET FEASIBILITY MATRIX FOR OVERALL DEVELOPMENT ...... 63 6 CATCHMENT DELINEATION AND MICRO-MARKET ASSESSMENT ...... 67 6.1 BACKGROUND ...... 67 6.2 CATCHMENT DELINEATION AND ANALYSIS ...... 68 6.2.1 CATCHMENT DELINEATION ...... 68 6.2.2 CATCHMENT ASSESSMENT AND ANALYSIS ...... 70 6.3 REAL ESTATE MICRO-MARKET SUB-SECTOR TRENDS ...... 74 6.3.1 MICRO-MARKET OVERVIEW ...... 74 6.3.2 RETAIL SUB-SECTOR ...... 75 6.3.3 COMMERCIAL / OFFICE SUB-SECTOR ...... 81 6.3.4 RESIDENTIAL SUB-SECTOR ...... 84

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6.3.5 HOSPITALITY SUB-SECTOR ...... 84 7 RETAIL SHOPPING BEHAVIOR ANALYSIS ...... 85 7.1 GENERAL...... 85 7.2 RETAIL SHOPPING BEHAVIOR OF TARGET POPULATION ...... 85 8 DEMAND SUPPLY ANALYSIS FOR RETAIL MALL AND BROAD TENANT MIX ...... 91 8.1 GENERAL...... 91 8.2 METHODOLOGY ADOPTED FOR DEMAND SUPPLY ANALYSIS ...... 91 8.3 DEMAND ASSESSMENT FOR RETAIL SPACE ...... 92 8.4 DEMAND-SUPPLY-GAP ASSESSMENT ...... 99 8.5 BROAD TENANT MIX AND POSITIONING ...... 100 9 DEVELOPMENT MIX, BUSINESS PLAN AND FINANCIAL FEASIBILITY ASSESSMENT ...... 105 9.1 PROPOSED DEVELOPMENT MIX ON THE PROJECT SITE ...... 105 9.2 OVERALL PROJECT CONFIGURATION ...... 106 9.2.1 BUILT-UP AREA AND SALEABLE AREA STATEMENT ...... 106 9.2.2 CAR PARKING PROVISION ...... 106 9.2.3 DEVELOPMENT PHASING ...... 107 9.3 KEY COST AND REVENUE ASSUMPTIONS ...... 107 9.4 ESTIMATED PROJECT COST ...... 112 9.5 CAPITAL STRUCTURING AND DEBT REPAYMENT SCHEDULE ...... 112 9.6 FINANCIAL ANALYSIS AND BUSINESS PLAN FOR THE PROPOSED FIRST PHASE DEVELOPMENT ...... 116 9.6.1 CONSOLIDATED BUSINESS PLAN FOR THE ENTIRE FIRST PHASE DEVELOPMENT ...... 116 9.6.2 BUSINESS PLAN FOR THE RETAIL MALL AND MULTIPLEX ...... 122 9.6.3 BUSINESS PLAN FOR THE SHOWROOM AND OFFICE SPACE ...... 126 9.7 FINANCIAL INDICATORS FOR THE PROPOSED DEVELOPMENT ...... 133 9.8 SENSITIVITY / RISK ANALYSIS ...... 133 10 ANNEXURE ...... 137 10.1 DESCRIPTION OF SOCIO ECONOMIC CLASSIFICATION ...... 137 10.2 PERCEPTION ANALYSIS FROM PROMINENT RETAILERS IN THRISSUR AND ...... 139 10.3 PERCEPTION ANALYSIS FROM OCCUPIERS SURVEY IN KOCHI AND BANGALORE ...... 141 10.4 BROAD TENANT MIX FOR THE PROPOSED MALL ...... 141

LIST OF TABLES

Table 2.1: Salient Features of Thrissur City ...... 13 Table 2.2: Demographic Features of Thrissur City (Municipal Corporation Area) and Thrissur UA as per the 2011 Census ...... 16 Table 2.3: Population Details and Growth Trends in Population of Thrissur City (Municipal Corporation Area) ...... 16 Table 2.4: Working SSI/MSME Units Registered in Thrissur and Kerala ...... 18 Table 2.5: Working SSI/MSME Units Registered in Thrissur...... 18 Table 2.6: District-wise Investment and Employment in KSIDC Units ...... 19 Table 2.7: Tourism Statistics of and Kerala State ...... 20 Table 2.8: Overview and Salient Features of Major Infrastructure Projects in Thrissur ...... 21 Table 3.1: Select List of Builders and Developers Active in Thrissur City ...... 24 Table 3.2: Description of Key Residential Development Zones in Thrissur City ...... 26 Table 3.3: Average Capital Value of Residential Space in Prime Locations of Thrissur City ...... 28 Table 3.4: Historic Trends in Residential Apartment Capital Values in Select Micro-Markets in Thrissur City...... 29 Table 3.5: Other Charges Levied for Residential Developments in Thrissur ...... 30 Table 3.6: Prominent Graded Residential Projects in Thrissur City ...... 30 Table 3.7: Profile of Buyers in Thrissur for Residential Apartment Projects ...... 31

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Table 3.8: Major Commercial Establishments in Swaraj Round, Thrissur ...... 33 Table 3.9: Lease Rentals for Commercial Space in Prime Locations within Thrissur City ...... 34 Table 3.10: Overview of Retail Market in Select Zones of Thrissur City ...... 35 Table 3.11: Overview of High-street Retail Market in Thrissur City ...... 36 Table 3.12: Lease Rentals and Capital Values for Retail Space in Thrissur City...... 36 Table 3.13: Lease Rentals for Retail Space in Prime Locations in Thrissur City ...... 38 Table 3.14: Leasable Area Details in in Thrissur City ...... 40 Table 3.15: Inventory of Prominent Hotels in Thrissur City ...... 40 Table 3.16: Market Share of International Conventions and Meetings in Asia Pacific ...... 43 Table 3.17: Market Performance of MICE Market in India ...... 44 Table 3.18: Availability of Facilities for MICE Events in Major Cities in India ...... 45 Table 3.19: Most Sought Convention Facilities in India ...... 46 Table 3.20: Distance from Major Landmarks from Lulu ICC ...... 49 Table 3.21: Average Daily Room Rate for Hotel Rooms at Lulu ICC ...... 50 Table 3.22: Details of Lulu International Convention Centre ...... 51 Table 3.23: Technical Details of Lulu International Convention Centre...... 51 Table 3.24: Details of Conference Halls at Lulu International Convention Centre ...... 53 Table 4.1: Details of the Project Site ...... 54 Table 4.2: Distances of the Project Site from Major Landmarks in the City ...... 55 Table 4.3: SWOT Analysis for the Project Site ...... 59 Table 4.4: Break-Up of Area Statement for First Phase Development on the Project Site ...... 60 Table 5.1: Break-Up of Area Statement for First Phase Development on the Project Site ...... 62 Table 5.2: Summary Sector Assessment and Recommended Development Mix for Project Site under Different Phases ...... 64 Table 6.1: Framework on Methodology Adopted for Primary Demand Assessment Surveys ...... 67 Table 6.2: Catchment Details of Project Site ...... 70 Table 6.3: Key Socio-Economic Features of the Primary and Secondary Catchment of the Project Site ...... 70 Table 6.4: Key Demographic Features of the Catchment Area of the Project Site ...... 71 Table 6.5: Existing and Projected SEC A & B Population and Households within the Catchment Area of the Project Site ...... 72 Table 6.6: Overview of the Micro-Market Situation for the Project Site ...... 74 Table 6.7: Price Benchmarking - Achievable Rentals for the Proposed Mall on the Project Site ... 81 Table 6.8: Price Benchmarking - Achievable Rentals for the Proposed Commercial / Office Space (on Warm Shell Basis) on the Project Site ...... 82 Table 6.9: Suggestive Format Sizes and Recommended Achievable Rentals for the Proposed Commercial / Office Space (on Warm Shell Basis) on the Project Site ...... 83 Table 8.1: Methodology for Estimating Retail Demand Supply Gap for the Catchments of the Project Site ...... 91 Table 8.2: Retail Demand Estimate for the Catchment of the Project Site ...... 92 Table 8.3: Derivation of Potential Retail Demand for the Catchment of the Project Site for the Year 2013 for Different Retail Categories ...... 93 Table 8.4: Estimation of Retail Demand of Thrissur City ...... 99 Table 8.5: Demand-Supply-Gap for the Potential Retail Space for the Project Site for the Year 2013 and 2016 ...... 100 Table 8.6: Location Preference of Retail Categories within the Mall as Indicated by the Retailers in Thrissur ...... 101 Table 8.7: Potential Formats and Brands for Proposed Retail Mall on the Project Site ...... 102 Table 9.1: Break-Up of Area Statement for First Phase Development on the Project Site ...... 105 Table 9.2: Product Mix and Built-Up Area and Saleable / Leasable Area Statement for the First Phase of the Development on the Project Site ...... 106 Table 9.3: Car Parking Provision for the First Phase of the Development on the Project Site ..... 106 Table 9.4: Proposed Development Phasing for the Project Site ...... 107 Table 9.5: Key Cost and Revenue Assumptions used for Business Plan for the Project Site ...... 107 Table 9.6: Estimated Project Cost for the Proposed First Phase Development on the Project Site ...... 112 Table 9.7: Capital Structuring Used in the Business Plan for the First Phase of Development on the Project Site ...... 112

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Table 9.8: Capital Structuring, Debt Repayment Schedule and Debt Indicators for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) ...... 114 Table 9.9: Capital Structuring, Debt Repayment Schedule and Debt Indicators for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) ...... 115 Table 9.10: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Consolidated ...... 116 Table 9.11: Consolidated Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Consolidated ...... 119 Table 9.12: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Retail Mall and Multiplex ...... 122 Table 9.13: Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Retail Mall and Multiplex ...... 124 Table 9.14: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Showroom and Office Space ...... 126 Table 9.15: Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Showroom and Office Space ...... 129 Table 9.16: Key Financial Indicators for the First Phase Proposed Development on the Project Site ...... 133 Table 9.17: Sensitivity Analysis - Behavior of the Project Cost and Performance of the Key Financial & Bankability Indicators for the Proposed First Phase Development on the Project Site ...... 135

LIST OF MAPS

Map 2.1: Map on Regional Connectivity of Thrissur ...... 15 Map 2.2: Growth Trends and Growth Corridors in Thrissur City ...... 22 Map 3.1: Overview of Real Estate Sub-Sectors in Thrissur City ...... 23 Map 3.2: Residential Development Zones in Thrissur City ...... 27 Map 3.3: Key Residential Development Projects in Thrissur City ...... 32 Map 3.4: Map Showing Major Retail Corridors of Thrissur City ...... 37 Map 4.1: Location of Project Site ...... 55 Map 4.2: Map on Location of the Project Site and its Surroundings ...... 58 Map 6.1: Map Showing the Primary and Secondary Catchment of the Project Site ...... 69 Map 6.2: Map Showing the Urban Centers of Tertiary Catchment of the Project Site ...... 70 Map 6.3: Map Showing the Key Retail Developments in the Primary and Secondary Catchment of the Project Site ...... 76

LIST OF ABBREVIATIONS

ADR Average Daily Room Rate BHK Bedroom Hall and Kitchen BPO Business process outsourcing BUA Built-Up Area CBD Central Business District CCTV Closed-circuit television CDR Credits Deposit Ratio CPU Car Parking Unit DBM Dense Bitumen Macadam DCR Development Controls & Regulations DSCR Debt Service Coverage Ratio F&B Food & Beverages FAR Floor Area Ratio FPI Food Processing Industries GBC Global Business Conexxtions GDP Gross Domestic Product GLA Gross Leasable Area GoI Government of India

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GoK GSDP Gross State Domestic Product Ha Hectare HNI High-Net-Worth Individual ICSC International Council of Shopping Centers INR Indian National Rupees IT Information Technology ITES Information Technology Enabled Services KBF Kerala Builders KFC Kerala finance corporation KILA Kerala Institute of Local Administration KINFRA Kerala Industrial Infrastructure Development Corporation km Kilo-metre KMBR Kerala Municipality Building Rules KSEB Kerala State Electricity Board KSIDC Kerala State Industrial Development Corporation KSRTC Kerala State Road Transport Corporation KSUDP Kerala Sustainable Urban Development Project KTDC Kerala Tourism Development Corporation KWA Kerala Water Authority LSGD Local Self Government Department MSL Mean Sea Level MSME Micro Small and Medium Enterprises MT Metric Tonne NBA National Board of Accreditation NCA Net Cash Accrual NH National Highway NHAI National Highway Authority of India NRIs Non Resident Indians NRKs Non Resident Keralites PBD Peripheral Business District PBD Peripheral Business District PBSEZ Port Based Special Economic Zone PPP Public-Private-Partnership PWD Public Works Department SBD Secondary Business District SEC Socio-Economic Category SEZ Special Economic Zone SH State Highway sq. ft. square feet sq. m square metre SSI Small Scale Industries SWOT Strength-Weakness-Opportunity-Threat TDA Thrissur Development Authority TMC Thrissur Municipal Corporation UA Urban Agglomeration USP Unique Selling Proposition

CONVERSION OF UNITS

1 hectare 2.4711 acres 1 acre 43559.66 sq. ft. 1 acre 4046.9 sq. m 1 sq. km 247.11 acres 1 sq. m 1.196 sq. yards 1 sq. m 10.764 sq. ft.

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1 meter 1.0936 yards 1 meter 3.28 ft. 1 cent 435.6 sq. ft. 1 acre 40 guntas

GLOSSARY OF TERMS

. Anchor Store: In retail, an Anchor store is one of the larger stores in any mall or shopping center which is the main attraction and draws retail traffic to the center. . Bare Shell (Commercial Building): The said premises shall include only building shell and core. This includes connected power, water supply, common lifts and staircase. Also termed as Cold Shell. . Built Up Area/Gross Floor Area: The exclusive floor area allocated to tenants measured from the exterior of the enclosing walls for a unit. It excludes the common areas such as stairs, lift shafts, lobbies. The built-up area (BUA) of a building is the sum of BUA of all the floors. BUA is typically 20-25% higher than the carpet area . Capital Value: The price at which a sale transaction takes place. [Capital Value=Rent per year/Yield] . Carpet Area: The exclusive floor area allocated to tenants measured from the interior of the enclosing walls for a unit. It excludes the common areas such as stairs, lift shafts, lobbies. . CBD: Central Business District (CBD). Generally the central part of the city where most of the commercial activities in terms of office and retail is concentrated. It extends up to a radius of 3 to 5 km around the area. . Commercial Office (Non IT/SEZ) Building: Unlike IT Parks and SEZs, Office space within Commercial Office Buildings can be leased/sold to occupiers from any industry and the occupiers may not have any tax advantages of locating in them. . Commercial Retail Units (CRU) / Line Shops: These are small format stores or specialty stores dealing in specific product category within a mall. . Floor Area Ratio (FAR): This is the quotient obtained by dividing the total area covered (pedestal area) on all floors, divided by the total area of the plot. In a nutshell, FAR = Total covered area of all floors /Total plot Area) . Floor Plate: The extent of rentable/ leasable area on one whole floor, sometimes also called as the footprint . Footfall Conversions: Proportion of visitors to a retail outlet actually making purchase during the visit. Expressed in numbers or percentage . Ground Coverage: It is the ratio of the building footprint and the total plot area. It is generally expressed in percentage. . High Streets: Main street of a town with concentration of retail stores and other business along side . Interest Rate: The rate of interest in effect for the monthly payment due. . IT Park: A building which conforms and functions according to the guidelines of the Software Technology Parks of India (STPI) regulations. STPI aids IT companies with various infrastructure issues like connectivity, land procurement etc. currently all IT parks are governed by section 80/A if income tax laws . Market Study: A forecast of future demand for a certain type of real estate project that includes an estimate of the square footage that can be absorbed and the rents that can be charged. Also called Marketability Study. . Matriculation: In India, matriculation is a term commonly used to refer to the final year of high school, which ends at tenth standard (tenth grade), and the qualification consequently received

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by passing the national board exams or the state board exams, commonly called "matriculation exams". English is the standard language for matriculation, while regional languages are also an option. Most students who pass out of matriculation, or class 10, are 15–16 years old. Upon successfully passing, a student may continue onto junior college. The 11th and 12th standards are usually referred to as "first year junior college" and "second year junior college". . Micro-market: A micro-market is a geographical segment of the city, typically categorized as Central Business District (CBD), Secondary Business District (SBD) and Peripheral Business District (PBD). . Minimum guarantee: A floor lease rent is mutually agreed between the developer and the Tenant. In case the revenue generated from the store does not exceed the pre-determined revenue generation figure then, this Minimum guarantee lease rent is paid to the developer. . Mixed-Use: Space within a building or project providing for more than one use (i.e., a loft or apartment project with retail, an apartment building with office space, an office building with retail space). . Occupancy Cost: The percentage of turnover that a retailer can afford/ willing to pay to occupy the premises. . Real Estate: Also called "real property." (1) Land and anything permanently affixed to the land, such as building, fences and those things attached to the buildings, such as light fixtures, plumbing and heating fixtures, or other such items that would be personal property if not attached. (2) May refer to rights in real property as well as the property itself. . Revenue share: Instead of a pre-committed rent, a pre-determined percentage share of sales at the store is given to the developer towards rent contribution. . Socio-Economic Classification (SEC): This classification of Indian consumers is on the basis of two parameters: occupation and education of the chief wage earner (Head) of the households. . Super Built up Area: Total leasable space in a building, usually a sum of the carpet area/usable area, common areas (like, entrance lobby, lift lobby, stairwell, etc in a multi- tenanted building) and areas earmarked for services. this usually excludes the basement of basement is used for parking and utilities . Supply: The sum of built-up area of all building completions in a given period . Utilities: The private or public service facilities such as gas, electricity, telephone, water, and sewer that are provided as part of the development of the land. . Warm Shell (Commercial Building): Warm shell premises refer to building with not only electricity connection but also have all services such as high side air-conditioning, 100% power back-up. Main plant and equipment such air-handling units, diesel generator sets and chillers shall be operational for servicing the said Premises, and ready for the tenant to connect to. . Yield: The interest earned or return by an investor on an investment, stated as a percentage of the amount invested. . Zoning: The division of a city or town into zones and the application of regulations having to do with the structural, architectural design and intended use of buildings within such designated zone (i.e. a tenant needing manufacturing space would look for a building located within an area zoned for manufacturing).

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1 THE ASSIGNMENT

1.1 INTRODUCTION

Kenz Inn Commercial Complex Limited (hereinafter referred to as the ‘Client’) intends to develop a multi-dimensional mixed use real estate project on a land parcel measuring about 11.3 acres located in Thrissur, Kerala, India (hereinafter referred to as the ‘Project Site’). Proposed mixed-uses would comprise of a shopping mall, office and showroom spaces, hotel as well as residential apartments with the construction taking place in phases (in 3 phases). First phase of the development is expected to have Commercial/Office and Retail Mall & Showroom Space, spread over about 4.46 acres.

In this regard, the Client intends to carryout comprehensive market analysis to:

a) assess the market feasibility for various uses/activities proposed as part of the overall integrated development in medium- & long-term (in all 3 phases), inter-dependency, value add in positioning and key critical success factors for development of such use/activity; and

b) assess the feasibility of the project components proposed under the Phase 1 (Commercial/Office and Retail Mall), its medium- and long-term viability and to assess possible risks and rewards based on detailed primary surveys of the customers. In addition, the Client also intends to understand the financial feasibility of the development proposed under First Phase based on the prevailing market conditions, proposed positioning, phasing and other development aspects of the upcoming development.

Jones Lang LaSalle (hereinafter referred to as the ‘Consultants’) have been appointed to provide services on the above said Development Advisory for the Project Site. The Consultants are one of India’s leading international property consultants, specializes in providing real estate advice to corporates and institutions, offer full line of real estate services, i.e., Consulting, Research, Agency, Valuation, Project Management, Facilities Management, Property Maintenance & Investment Consultancy.

1.2 SCOPE OF WORK

Broadly, the scope of work covers the following key areas / aspects:

City Overview and Macro-Market Assessment

. Overview of the city; . Demographic and socio-economic characteristics of the population of the city; . Infrastructure development initiatives in the city and future growth direction; and . Macro-market assessment of core and/or relevant real estate sectors proposed in the mixed-use development (like prime residential, commercial / office, organized retail, hospitality (3-star & above, convention centre and serviced apartments).

Site Analysis and Micro-Market Assessment

. Site analysis and SWOT analysis of the site; . Catchment delineation and analysis; . Detailed real estate micro-market assessment for core and/or relevant real estate sectors (like prime residential, commercial / office, organized retail, hospitality (3-star & above, convention centre and serviced apartments) with larger emphasis/focus on commercial / office and organized retail with broad coverage of prime residential (as support to retail), which are proposed in First Phase of development;

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. Local market dimensions for Commercial/Office and Retail, supply & competitor analysis including competitive benchmarking; . Detailed market assessment for retail mall comprising customer spending pattern analysis, market potential assessment, retail demand assessment based on trade area analysis covering total potential, ticket sizes, etc.; and . Assessment of demand drivers, demand-supply-gap analysis and potential demand for the Project Site based on market share analysis.

Assessment of Concept Plan and Tenant Mix/Positioning for Retail Mall

. Review the concept design and provide design inputs based on market assessment -- to cover scope & suggestions for improvements, missing components & amenities, ease of access, impact of the site location and any other aspects; . Assessment of the built-up areas versus saleable areas -- to cover potential target occupant categories, optimum size ranges for shop units, suggestions for potential anchor tenants and mix of other shopping units & types; and . Validation and/or confirmation of final area statement / saleable area configuration based on the development controls and market practices.

Business Plan Preparation and Financial Feasibility (only for Phase 1)

. Competitive benchmarking and suggestions on achievable pricing for the proposed development on the Project Site (for anchor, vanilla, leisure & entertainment, multiplex, food court, etc. and commercial/office space on warm shell basis); . Key business performance parameters and assumptions used in the assessment (based on the market assessment and considering the proposed positioning and retail advisory outcome); . Financial feasibility and sensitivity analysis: o Startup capital requirements; o Startup capital sources; o Potential returns for investors; o Capital distribution and outlay. o Projected cash-flow. o Industry, regulatory and compliance norms; o Sources of revenue and sales projection; and o Financial validation document for financial institutions. o Risk Assessment Report . Conclusions and recommendations based on the market assessment and feasibility assessment.

1.3 LIMITATIONS TO THIS ASSIGNMENT

Following are some of the limitations to this assignment:

. The interpretation of real estate key trends is based on rapid market assessment and interactions with limited key players in real estate market, viz. developers, brokers and investors. Hence, they are indicative of situations prevalent at the time of assessment;

. All facts & figures, findings, conclusions of the macro- and micro-market assessment are captured from key players in the real estate market as indicated above. Hence, they are indicative of situations prevalent at the time of assessment;

. The development options prescribed in this assignment is a result of our assessment of the indicative demand and supply that could be captured within the time period allotted for the assignment and hence is indicative; and

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. The development options are indicative of what may be most practical, marketable and remunerative for the Client. The anticipated returns are worked out in a conservative and realistic manner.

1.4 DISCLAIMER AND PROFESSIONAL INDEMNITY

In most cases, the Consultants have relied on market information, from public and private sources, and have ensured to the best of its ability the correctness and the validity of the same, by cross checking from various sources. However, property markets in large cities and urban centers continue to be plagued by misinformation, non-disclosure and fragmentation, wherein almost inevitably some information is withheld in every case.

To mitigate this, a structured and scientific approach has been undertaken for the assessment, which ensures, that proposed developments selected for the assignment are promoted by reputed developers and corporate houses, with many of which Jones Lang LaSalle has a professional relationship.

Whilst every effort has been made to provide authentic data and analysis, Jones Lang LaSalle or any of its employees are not responsible for any loss, major or minor incurred on the basis of the information and analysis provided and not liable to any damages in any form or shape.

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2 PROFILE OF THRISSUR CITY

2.1 THRISSUR SNAPSHOT

Thrissur is the headquarters city of Thrissur District and the 5th largest city in Kerala. Thrissur is the 3rd largest Urban Agglomeration (UA) with a population of about 1,854,783 (provisional as per the 2011 census) and the 21st largest in India. Thrissur is located 75 km from Kochi, 112 km west of Coimbatore and 122 km south of . The city is located at a distance of about 300 km from the state Capital City (Otherwise called as Trivandrum).

Thrissur was originally called as Thrisivaperoor1 and was once the capital of the Kingdom of Cochin. The city is popularly known as the Cultural Capital of Kerala because of its cultural, spiritual and religious leanings throughout history. The city attracts the highest number of domestic tourists in Kerala and is maximum when the city hosts Festival, which is the most colorful and spectacular temple festival in Kerala. The region also offers religious attractions for people of communities, which include Vadakkumnathan Temple, Thiruvambadi Sri Krishna Temple and Paramekkavu Temple, Our Lady of Lourdes Syro-Malabar Catholic Metropolitan Cathedral and the Our Lady of Dolours Syro-Malabar Catholic Basilica. Further, Thrissur District houses the holiest Hindu Temple (the Temple) and Islam Masjid (Cheraman Juma Masjid). Cheraman Juma Masjid is the country’s first mosque, opened in AD 629, which has opened the gates for Arabs, Romans, Portuguese, Dutch and English.

Apart from being the cultural headquarters of the state, the city is also a major educational hub and is home to several educational institutions including the , Kerala Police Academy, Kerala Agricultural University, Kerala University of Medical and Allied Sciences and Kerala Institute of Local Administration (KILA).

The hillock (65 acres), which presently houses Vadakkumnathan Temple form the core area of the city and the city grew around this hillock called the Thekkinkadu Maidan2. At present, the city branches out from Thekkinkadu Maidan through nine roads, viz. MG Road, Vivekananda Road, Karunakaran Nambiar Road, Palace Road, Thrissur Palghat Road, High Road, Shornur Highway, AR Menon Road and Municipal Office Road. The city acts like an incubator for many entrepreneurs, and is a major financial hub of the city. The city is also one of the large centre for shopping in Kerala for silks, gold and diamond jewelry. It is noteworthy that the gold business in the city is a major revenue earner for the economy of Kerala and Thrissur City manufactures about 70% of gold jewellery manufactured every year in state. The table below presents some of the salient features of Thrissur City.

Table 2.1: Salient Features of Thrissur City City Thrissur Population (2011 . 315,596 (Thrissur Corporation) Census - Provisional) . 373,211 (Thrissur Development Authority) . 1,854,783 (Thrissur Urban Agglomeration3) Area . Thrissur Corporation Area - 101.42 sq.km . Thrissur Development Authority Area - 120.25 sq.km

1 Thrissivaperur means the town Sacred Siva 2 Thekkinkadu Maidan is under the custody of the Cochin Devaswom Board (CDB), which hosts spectacular Thrissur Pooram, which is considered the 'Mother of all Poorams in Kerala. Earlier, Maharaja of Cochin, Rama Varma constructed the Thekkinkadu Maidan at the heart of Thrissur after clearing the forest around the Vadakkumnatha Temple. 3 Kodungallur (UA) and Guruvayoor (UA) are merged with Thrissur (UA) for 2011 Census (Source: http://www.kerala.gov.in)

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. Thrissur District - 3,032 sq.km Geographic Location . 10.52° N Longitude and 76.21° E Latitude Connectivity and . Air: Cochin International Airport is the nearest airport, which is at a distance Linkages of 50 km towards South, on the way to Ernakulum. Calicut Airport is 108 km north of Thrissur. . Road: The well-connected roads are making Thrissur an easily accessible city from anywhere in . The NH-47 connects the city to the southernmost tip of India i.e. Kanyakumari. . Rail: The railway station is just one km south-west of the city. There are several trains connect the city to different parts of India. Climate . Tropical climate . Monsoon season: June - September (heavy rains) . Mild winter: October - February (cool, dry with occasional rain) . Summer: March - May (hot and humid) Temperature . Highest maximum temperature of 35 degree C . Lowest minimum temperature of 20 degree C Languages . Regional language: . English is widely understood. Hindi and Tamil are used occasionally City Administrator Thrissur Municipal Corporation City Functions District Headquarters, Cultural Capital of Kerala Distance of 50 km (Cochin International Airport) International Airport from City Key Advantages of . A major domestic religious tourist destination Thrissur . Availability of cheap skilled manpower and talent pool . Location advantage - good connectivity and linkages Source: Various Government and/or Public Sources and Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

2.2 REGIONAL CONNECTIVITY

Thrissur District is bound by Malappuram District in the north, District in the east, Eranakulam District in the south and the Coimbatore District of in the southeast. The regional setting map of Thrissur District is shown in the following page:

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Map 2.1: Map on Regional Connectivity of Thrissur

Thrissur Region is very well connected to the other regions as indicated in the map above. The city has access to other parts of state and neighboring states and few countries by roadways, railways and airways. As described below:

Road: Thrissur is connected to the North-South Corridor of National Highway System through NH-47. The highway passes through the city and provides connectivity to the nearby cities such of Kochi, Palakkad and Coimbatore. NH-47 provides two main exit points at and to the Thrissur City. Apart from NH-47, the city is connected by three State Highways, viz. SH-69 (Thrissur-Kuttippuram Road), SH-22 (Kodungallur - Shornur Road), and SH- 75 (Thrissur - Kanjani - Road), which connects the city with its suburbs and adjoining areas.

Railways: The railway station is just one km south-west of the city. There are several trains connect the city to different parts of India. There is a broad gauge rail line, which connects the city to Vettikkattiri, Mullurkkanchery, Mulankunnathukavu, Poonkunnam, , Pudukkad, Nellai, , , , and Karukutty, along 69 km line passing through the Thrissur District.

Airways: Cochin International Airport at is located at a distance of about 50 km south of the city and is the nearest airport. Other nearby airport is at Calicut (Kozhikode), which is located at a distance of about 108 km north of the city. Cochin International Airport has regular flights to Bangalore, , Coimbatore, , Goa, , and Thiruvananthapuram.

2.3 DEMOGRAPHIC CHARACTERISTICS

As per the Census 2011 provisional population totals, Thrissur Municipal Corporation limits had a population of 315,596 persons while that of the Thrissur UA was 1,854,783 persons. Thrissur Municipal Corporation Area witnessed negative growth in the population with respect to the 2011 Census population figures. However, the UA witnessed significant increase of about 462% with respect to the 2011 Census population figures and this

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increase is attributable to change in the jurisdiction of the Thrissur UA, which comprises of Thrissur Municipal Corporation (TMC) and five Municipalities of , Guruvayur, , Irinjalakuda, and Kodungallur and 105 Census Towns.

The table below presents key demographic features of Thrissur City (Municipal Corporation Area) and Thrissur UA as per the 2011 Census.

Table 2.2: Demographic Features of Thrissur City (Municipal Corporation Area) and Thrissur UA as per the 2011 Census Sl. Particulars Thrissur City Thrissur UA 1. Population (Nos.) 315,516 1,854,783 2. Decadal Population Growth Rate (Percent) (0.6) 462 3. Households (Nos.) 394,635 4. Average Household Size (Persons per Household) 4.7 5. Literacy Rate (Percent) 97.24 96.19 Source: Census of India; 2011 (Provisional)

It is noteworthy that the literacy rates of both Thrissur and Thrissur UA is higher than national urban literacy rate (84.98%) and Kerala urban literacy rate (94.99%). The table below presents population growth trends of Thrissur City (Municipal Corporation Area) over last 6 decades.

Table 2.3: Population Details and Growth Trends in Population of Thrissur City (Municipal Corporation Area) Census Year Population (Nos.) Decadal Growth Rate 1961 73,000 -- 1971 76,200 4.4% 1981 77,900 2.2% 1991 74,600 -4.2% 2001 317,474 325.6% 2011 3,15,596 -0.6% Source: Census of India

It is noteworthy that the city population has a very slow growth and the increase in population during the decade 1991-2001 is primarily due to increase in the jurisdiction of the Thrissur Municipal Corporation Area. The city has witnessed negative growth during the last decade.

2.4 SOCIO-ECONOMIC CHARACTERISTICS

Literacy Rate: As per the Census 2011 figures (provisional), Thrissur City had a literacy rate of 97.24% and Thrissur UA had a literacy rate of 96.19%. It is noteworthy that the literacy rates of both Thrissur and Thrissur UA is higher than national urban literacy rate (84.98%) and Kerala urban literacy rate (94.99%).

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Per Capita Income: As per the District wise Per Capita Income at Constant Prices (2004- 05), Thrissur had per capita income of INR 64,629 per annum in the year 2011-12, ranking 5th in the state (Department of Economics and Statistics, Government of Kerala), registering an average growth rate 9.39% than the previous year (INR 59,080 per annum).

Socio-Economic Classification (SEC) of the City Population: As per the City Skyline data of year 2012, Thrissur City has about 27.7% of SEC A & B population in city. Description of the SEC is given in Annexure under Section 9.1.

Credits Deposit Ratio: As per the 2012 Economic Review of Kerala, Thrissur District had a Credit Deposit Ratio of 81.5%, indicating economic growth in the region and ranks 4th in the state.

2.5 ECONOMIC CHARACTERISTICS

2.5.1 FUNCTIONAL BASE OF THE CITY

The district wise distribution of Gross State Domestic Product (GSDP)4 at factor cost at Current Prices indicate that Thrissur District has the third highest income of INR 3,010,494 lakhs during 2011 -12 as against INR 2,570,599 lakhs during 2010-11, registering a growth rate of 17.11%. However with respect to Constant Prices (2004-05) prices indicated an annual growth rate of 9.63 percent (2011-12: 2,082,359, 2010-11: 1,889,958).

Thrissur is a major jewellery hub in the country with city manufacturing about 70% of gold jewellery manufactured every year in state. Gold crafting is one of the major cottage industries in the city followed by diamond polishing and tyre moulding. The goldsmiths of Thrissur boasts of a tradition spanning several centuries - from the days when pepper and other spices were exchanged for the metal from Roman and Arab traders.

This could be one reason for setting up the country’s first International Gemological Institute (IGI) satellite gemological laboratory at Thrissur. By having a base in the focal point of Thrissur, IGI aims to provide ease of services, operations and reduction of costs for jewelers in and around Kerala. IGI is the world’s largest independent laboratory for testing and evaluating gemstones and fine jewelry. This was established in 1975 in Antwerp and has its presence in New York, Los Angeles, Toronto, Hong Kong, Mumbai, the Seepz Zone, , New Delhi, Dubai, Tokyo and Tel Aviv. IGI is an ISO accredited worldwide organization.

2.5.2 KEY ECONOMIC DRIVERS OF THE CITY

Thrissur Gold Ornaments Cluster: Thrissur Gold Ornaments cluster is an agglomeration of gold ornaments manufacturing units within 25 sq. km. area of Thrissur City. The MSME (Micro small and medium enterprises of Kerala) conducted a cluster development program amongst the clusters in the city. The vision of the cluster is to create a strong and promising industrial base and retain its glowing image by infusion of new technologies, product diversification, continuous resource - flow and effective intervention by all stakeholders so as to become a vibrant cluster.

Food Processing Industries: Food processing industry is a sunrise sector that has gained prominence over the recent years with growth faster than agriculture sector. It has been recognized as a priority sector in Kerala due to its potential for sustainable and more inclusive growth, diversification, possibility of generating substantial employment and further advancement in respect of industrial development in urban and rural areas. FPI in Kerala are seen in both organized as well as unorganized sectors. The spices, pickles and

4 Source: Economic Review of Kerala

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the marine products are the major food product export from Kerala. Two thirds of Kerala’s export income comes from processed food. Dairy products, fish/meat products, rice & wheat products, ready to eat/ ready to cook products, bakery products, masala powder, coconut & other oils, Ayurvedic medicines, fruit juices, etc. are the major food items produced in the State. Kerala Industrial Infrastructure Development Corporation (KINFRA) is the state agency engaged in the promotion of food processing industry in the State. KINFRA has set up exclusive Food Processing Parks to suit the specific needs of the food processing sector and they offer space for food processing units in their 12 Industrial parks, as the demand for space is high. Out of these, KINFRA Small Industries Park, Koratty, Thrissur houses about 8 units, covering an area of about 9.393 acres with an investment of INR 200 million and has an employment of about 308 employees.

Dies and Moulds Cluster: The die making industries started in the city basically in connection with tile industry. The cluster is located in a geographical area of 25 km distance from the city center. The average employment in each unit is 10 workers. There are more than 50 units in this field.

Diamond Cluster: This cluster is located in Adatt, and Kaiparambu in the city. All the units are located within a radius 10 km from the city. On an average, this cluster consists of 10 small units and 65 micro units. The process includes cutting and polishing of natural diamonds. The raw material comes from Surat of and the same is been cut into standard sizes and polished as per the standards in the city. The finished products are exported to countries like Australia, China, Peru and CIS nations.

Industrial Sector: In the recent past, the Kerala State has made serious efforts to identify new opportunities and equip it to meet emerging challenges. While traditional industries like handlooms, coir and cashew are in a difficult phase of development with their inherent problems, the present Industrial Policy and other related policies of the State are aimed at enhancing investment opportunities. Emphasis is on Information Technology (IT), which has started showing positive signs through promotion of IT enabled services. Industrial Parks, Estates. Industrial infrastructure facilities offered by the State include industrial parks and estates. Major industries in Thrissur district include Food Processing, Chemicals, Textiles & Hosiery, Rubber & Plastics, Metal & Light Engineering, Electrical & Electronics, Wood and Leather. Pattern of industrialization is mainly in the SSI sector with a fair sprinkling of large and medium industries. Various agencies such as KSIDC, KINFRA and KFC are involved in industrial promotion by providing financial and infrastructure assistance to industrial units. The details pertaining to small scale industrial units, small and medium enterprises and Mini Industrial Estates in Thrissur is presented in the table below and the same is same is cross referred at the state level.

Table 2.4: Working SSI/MSME Units Registered in Thrissur and Kerala SSI/MSME Total Value of Goods and Employment Units Promoted Investment Services Produced Generated (Nos.) (Nos.) (INR Million) (INR Million) Kerala 205,987 108,316 371,557 1,021,162 Thrissur District 27,465 10,323 21,205 106,755 Source: Directorate of Industries & Commerce

Table 2.5: Working SSI/MSME Units Registered in Thrissur Name of DA/DP Total Area Area Allotted (Acres) Total No. of No. of Acquired (Acres) Units Working Units DP Athani 48.286 43.286 85 79 DP Kunnamkulam 3.0035 2.1 26 19 DP Ayyankunnu 29.32 21.6 64 15

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Name of DA/DP Total Area Area Allotted (Acres) Total No. of No. of Acquired (Acres) Units Working Units DP Velakkode 24.066 21.866 35 15 Puzhakalpadom 51.41 40 acres land transferred to KINFRA Kerala 2481.37 2094.76 2616 2019 Source: Directorate of Industries & Commerce

Table 2.6: District-wise Investment and Employment in KSIDC Units No. of Units Project Cost (INR Million) Employment (Nos.) Public Sector Private Sector Public Sector Private Sector Thrissur 2 2 352.5 72.7 90 Kerala State 7 25 833.7 9343.7 7460 Source: Directorate of Industries & Commerce

Tourism: Tourism is one of the fastest growing sectors in the World Economy. Kerala is today a most sought after and favored tourism destinations in India. It is famous for its natural splendors, the luxurious greenery, bewitching backwaters and innovative tourism products. Total revenue (including direct & indirect) from tourism during 2011-12 was INR 190.37 billion, an increase of around 10% over the last year (Source: Department of Tourism, Kerala, 2012). The increased popularity of the destinations is evident from the tourist statistics. The Foreign Tourist arrivals to Kerala during the year 2011-12 were 732,985, an increase of over 11% compared to the previous year. Whereas, the Domestic Tourist were 9381455, which is an increase of over 9% compared to the previous year. As per 2012 Economic Review, and Thrissur are the two leading districts recording the domestic tourists arrivals in the state.

There are a large number of tourist locations in the Thrissur District. Tourists visiting the district are attracted towards temples and historical monuments. World famous Pooram Festival (during April-May), Vadakkumnathan Temple, and Archeological Museum are some of the tourist attractions within the city while Peechi Vazhani Wildlife Sanctuary, Guruvayoor (famous for Krishna Temple), Athirappaly Vazachal Water Falls, Kerala Kalamandalam in Cheruthuruthy (Institute for Kathakali and other dance forms) are some of the tourist attractions in the suburbs of the city.

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The city functions mostly as a transit point for domestic and foreign tourists. Thrissur has a high incidence of domestic tourists, which can be contributed to the presence of major religious destinations. The average tourist arrivals are to the tune of 1.6 million domestic tourists and 3,398 foreign tourists per annum. Foreign tourist inflow witnessed a sharp decline from 2006. A growth rate of 8.06% was observed in the arrival of domestic tourists to Thrissur. The tourism statistics of Thrissur District with respect to Kerala State is presented in table in the following page.

Table 2.7: Tourism Statistics of Thrissur District and Kerala State Year Thrissur Kerala

Foreign Tourists Domestic Tourists Foreign Tourists Domestic Tourists

Nos. Growth Nos. Growth Nos. Growth Nos. Growth Rate Rate Rate Rate 2005 2,421 -8.92% 13,27,856 -3.65% 3,46,499 0.28% 59,46,423 -0.43% 2006 4,142 71.09% 13,98,014 5.28% 4,28,534 23.68% 62,71,724 5.47% 2007 4,645 12.14% 15,46,576 10.63% 5,15,808 20.37% 66,42,941 5.92% 2008 3,398 -26.85% 16,71,174 8.06% 5,98,929 16.11% 75,91,250 14.28% 2009 3,452 1.59% 17,33,862 3.75% 5,57,258 -6.96% 79,13,537 4.25% 2010 4,326 25.32% 18,74,211 8.09% 6,59,265 18.31% 85,95,075 8.61% 2011 5,011 15.83% 20,62,032 10.02% 7,32,985 11.18% 93,81,455 9.15% Source: Tourist Statistics, 2011. Dept. of Tourism, Kerala

2.6 KEY INFRASTRUCTURE INITIATIVES

There are various proactive measures taken up by the Government of Kerala (GoK) in augmenting & expanding the city physical infrastructure and developing major infrastructure projects to encourage overall economic development. The following table summarizes salient features of some of the major infrastructure projects in the city.

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Table 2.8: Overview and Salient Features of Major Infrastructure Projects in Thrissur Name of the Executing Agency Development Phase Location Area / Infrastructure Coverage Initiative Medicity Infrastructures Kerala . Medicity Project is conceived mainly to address the growing demand for healthcare Koratty Limited (INKEL) - services in Kerala and also to explore the scope of promoting medical tourism within Kerala State the State. Industrial . INKEL has done feasibility assessment for developing a Medicity in Koratty. Development . The proposed Medicity will provide healthcare for all at affordable cost by utilizing the Corporation Limited available resources effectively. It will cater to various healthcare needs at a single joint venture point by providing treatment under various streams of medicine. The facility would cater to the existing and futuristic needs of the healthcare sector in various aspects like medical research, education and training etc. . Project is envisaged to have adequate social infrastructure facilities to support the healthcare requirements. Infopark Thrissur Government of . Third Technology Park in Kerala after Thiruvananthapuram and Kochi, located 45 km Muringoor 42 acres Kerala from Kochi and 35 km from Thrissur and around 14 km from the Cochin International Thekkumuri Village, allotted Airport. Mukundapuram 30 acres . First Information Technology Park operational under the 'Hub and Spoke Model' Taluk, Koratty under (where Kochi Info Park acts as a hub and Koratty as the spoke) and it is associated possession with Kerala State IT Mission and Kerala State Information Technology Infrastructure Limited. . The Government of Kerala has allotted 42 acres of land for the Info Park and Info Park possesses 30 acres of land for the development. The Phase I of Info Park was launched on October 10, 2009 with 12 medium-sized companies and an office space of 44,500 sq. ft. The Phase-II of Info Park was inaugurated on January 8, 2010, were another 18,240 sq. ft. was added. In the Phase-III and final phase, Government is planning to develop the 25 acres of Info Park as a Special Economic Zone (SEZ) were 0.2 million sq. ft. building will be constructed. The remaining land in the SEZ will be leased out to IT companies and co-developers for developing their own campuses. It is said that when the Info Park becomes fully operational, it will have a built-up area of around 1.4 million sq. ft. Source: Various Government and/or Public Sources and Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Other infrastructure projects at the city level, which are under implementation include augmentation of municipal water supply & drainage system by Kerala Water Authority, augmentation of municipal solid waste management & urban sanitation program by the Municipal Corporation, augmentation of SH-69 by the PWD and augmentation of urban transport jointly by the PWD and NHAI.

2.7 FUTURE GROWTH DIRECTIONS

The physical development of Thrissur City and surrounding Panchayats is along major transportation corridors, with concentration of development on the major nodal points. Major retail and commercial activities are concentrated within 2-km radius of the Swaraj Round, which forms the Central Business District (CBD) of the city. The city has developed notably towards the north and northwest quadrant augmented by the institutional developments and the better connectivity. Few of the new initiatives, which are likely to fuel the economic development include the Information Technology Park and the proposed Medicity located at Koratty. The map below presents the growth trends and corridors of the city.

Map 2.2: Growth Trends and Growth Corridors in Thrissur City

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The above map represents the major growth corridors in the city. The presence of institutional developments (Medical College, ), excellent connectivity along the north and northwestern part of Thrissur especially along Guruvayoor Road (SH-39), induced more real estate development along this region. Further the SH-39 is emerging as prime destination for hospitality, car showrooms and white goods and it is considered as one of the fast growing corridors of Thrissur City. The locality adjacent to NH-47 bypass is also forming a major mixed use destination.

Immediate periphery of the CBD observes residential development. The prime residential areas are towards south of CBD, towards North, Paturaykal, Chembukavu, etc. The upcoming residential areas include Ayyanthol, Puzhackal, Manuthy, Kuttenalloor, Ollur, Poothol, Koorkencherry, Cheroor, etc.

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3 REAL ESTATE MACRO-MARKET TRENDS

3.1 GENERAL SECTOR TRENDS

Thrissur is one of the important cities of Kerala State and strategically located in close proximity to the Kochi City, which is the commercial hub of the state. The location advantages, proximity to Kochi and the proximity to three airports (Kochi, Kozhikode and Coimbatore) provide good opportunity for the city to grow its economic drivers. Further, the city is also linked to the Kochi Port by rail and a network of National Highways. The district administration of Thrissur is trying to leverage the potential of Thrissur and to turn it into a center of sustainable development. There is a proposal for inter-city connectivity by creating a Rapid Transit Corridor to the nearest metro cities. Major Government projects that are proposed to catalyze the development are the construction of Info Park at Koratty, the KINFRA Park at , the Medicity at Koratty, the Muziris Heritage Project for tourism development, etc. These developments, together with the investments from the non-resident Indians have contributed to the growth of real estate sector in the city. The map below indicates the major real estate sub-sectors of Thrissur City.

Map 3.1: Overview of Real Estate Sub-Sectors in Thrissur City

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Following are the prime areas witnessing different real estate activities.

. Retail and Commercial: CBD comprising Swaraj Round and the radial roads primarily housing retail high streets in the ground and first floors and office spaces primarily housing banking and financial institutions, travel agencies, etc. on the upper floors. . Residential: Mission Quarters, Punkunnam, Patturaickal, Kuttenallor, Ayyanthol, Poothol, Koorkencherry, Kishakkanpatturkara, Cherror, etc. . Corporate / Office: CBD and Secondary Business District (SBD) areas comprising Swaraj Round, Thrissur Kuttippuram Road, Shornur Highway, , etc. . Hospitality: CBD area near Saktan Private Bus Stand, Puzhakkal, etc. . Industrial: Ollurkkara, Adatt, Athani, etc.

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There are about 17 members of Kerala Builder Forum (KBF) who are active in the real estate market of the city. The leading builders include Skyline and Properties. Few developers from outside Thrissur have also entered into the real estate market here. These include Oceanus Dwellings, Sobha Developers, SRK Constructions, etc. The table below lists few of the select builders and developers having active presence in the city:

Table 3.1: Select List of Builders and Developers Active in Thrissur City Alukkas Builders and Developers Athira Builders Cheloor Property Development Project Forms Builders and Developers Inland Properties and Developers Oceanus Dwellings Maya Realtors Skyline Builders Penark Builders & Developers Sobha Developers SRK Builders Unidesign Builders & Developers Thrissur Builders Hilife Builders Plama Builders Precious Homes & Projects Orriana Builders & Developers Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

3.2 RESIDENTIAL SUB-SECTOR

The residential real estate market in the city witnessed high growth over the past four years in terms of capital values and development activities. All the prime residential areas of the city witnessed significant development activity in this period. The development typology also witnessed a change from the homestead and plotted developments to villa and apartment typology.

The demand is primarily attributed from those generated from the Non-Resident Keralites (NRK) and to a significant extent, from the business class segment of the city. The absorption rate in the CBD is 70% while the average absorption rate in the city and outskirts is 59%. The absorption rates do not vary widely across the micro-markets in the city. The proposed developments such as the IT/ITES initiatives, Medicity, the industrial estates, etc. are expected to contribute to the further growth in the residential real estate sector of the city.

Development Zones in City

The residential development zones in the city are delineated based on the distance and intensity of development at these locations. The residential areas under CBD are primarily comprises locations near the Swaraj Round, Patturaickal, MG Road, College Road, North Bus Stand Area, Shornur Road, Korpath Lane, etc. Locations under the SBD include Ayyanthole, Chembukavu, Chungam, Kottapuram, Saktan Stand premises, locations near Mission Hospital, Palakkad Road, , Poonkunnam etc. The Peripheral Business District (PBD) locations include residential developments along Athani, , Puzhakkal, Puthurkkara, Cheroor, Koorkencherry, , Kanamkulangara, Koorkencherry, Kuttenalloor, Mannuthy (Off Bye-pass), Mundur, Amalagiri, Ollur, Perigavu, Puranettukara, Viyyur, Thirur and Mulankunnathukavu, etc.

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The most predominant residential typologies in the city are apartments and villas. The most active residential market in the city is the SBD followed by the PBD. About 48% of the residential developments are coming up in the SBD areas. The higher land values of the CBD and the lack of developable spaces are the major reason for shift of residential developments to the SBD and PBD locations. Further, good connectivity between the SBD & CBD and availability of good social infrastructure facilities in the SBD is conducive for residential development.

The Project Site is located at Punkunnam and forms part of the SBD.

The table in the next page presents brief description of various residential development zones in the city. Map showing the different residential development zones in the city is presented in the subsequent page.

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Table 3.2: Description of Key Residential Development Zones in Thrissur City Zone Important Locations Profile Central Business Swaraj Round, Patturaickal, It is a high density area. These areas are well developed with very few new supply. The new supply is mostly from District (CBD) MG Road, College Road, redevelopment of old residential or commercial buildings into modern apartments. Majority of the proposed and North Bus Stand area, Shornur launched projects target luxury and upper mid segment population with average number of 35 units per project. These Road, Korpath Lane, etc. areas consists of primarily business class, upper middle-income and higher-income population. Population with high disposable income and propensity to spend on family shopping and entertainment is high Secondary Ayyanthole, Chembukavu, The growth of the micro-market especially in Ayyanthole, Poonkunnam, Chungam, Poothole and Kottapuram is driven Business District Chungam, Kottapuram, Saktan by the Civil Station, proximity to the CBD and excellent connectivity. Most upper-middle class buyers who wish to stay (SBD) Stand premises, locations near closer to the city CBD and work place prefer the SBD area, areas between CBD and Civil Station. Micro-market like Mission Hospital, Palakkad Chembukavu, Saktan Stand and area surrounding the Mission Hospital are driving factors for real estate development Road, Poothole, Poonkunnam and these area are densely populated. The project size variation across the micro-market is in the range of 80-100 etc. units. As a whole, SBD has access to well-developed social and physical infrastructure facilities and the land rates are lower than that of CBD. These locations house the service class and middle-income group households. It is a densely populated area with a mix of residential bungalows and new apartment developments. Population with moderately high disposable income and propensity to spend is high. Peripheral Athani, Muthuvara, Puzhakkal, The proximity to Industrial estates & plots, improved infrastructure facilities has triggered the development in this Business District Puthurkkara, Cheroor, region. In the case of residential development, most of them here are plotted development followed by small numbers (PBD) Koorkencherry, Kuriachira, of Residential Apartments and Villa developments. The western parts especially the areas like Puthurkkara, Puzhakkal, Kanamkulangara, are the upcoming residential areas with the residing population consisting of a mix of medium and low Koorkencherry, Kuttenalloor, disposable income groups. Even though the areas are industrial in nature, prominent developers like Sobha, Oceanus Mannuthy (Off Byepass), and Plama etc have their presence in these areas with projects under various stages of construction. This is mainly Mundur, Amalagiri, Ollur, due to excellent connectivity (Thrissur Kuttippuram Road, Shornur Highway) and availability of social infrastructure Perigavu, Puranettukara, facilities. The project size variation across the micro-market is in the range of 60-100 units. Viyyur, Thirur and Middle and lower middle income population. Mulankunnathukavu etc. Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Map 3.2: Residential Development Zones in Thrissur City

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Market Status on Supply and Absorption

Approximately 10% of the total residential development in the city concentrated in the CBD locations such as Patturaickal, part of Shornur Road, MG Road, College Road, etc. About 328 residential units are under various stages of construction in the CBD area. In the case SBD and PBD, PBD has significant number of units under various stage of construction. This is mainly due to lower land cost and good accessibility acting as an USP for many graded projects. There are about 1,650 units in SBD and 1420 units in PBD, which are under various stages of construction.

3-BHK apartments are most popular format in the city followed by 2-BHK. 1-BHK format has few takers and such units are primarily located in close proximity to the CBD or near to economic hubs. A 3-BHK flat in the city may cost between INR 2.8 to 8.5 million while a 2- BHK flat may cost between INR 2.5 to 7.0 million. The table below presents average capital values for residential space in prime locations of the city.

Table 3.3: Average Capital Value of Residential Space in Prime Locations of Thrissur City Major Locations Avg. Capital Value Major Locations Avg. Capital Value (INR per sq. ft.) (INR per sq. ft.) Patturaickal 2,600 Kuriachira 2,900 Punkunnam 3,050 West Fort 3,000 Ayyanthole 2,910 Kuttenallor 2,600 Chembukavu 2,500 Poothole 2,775 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Predominant housing typology has been the homestead type and the plotted developments till recent years. The plotted development is usually developed by one-time builders who sub divide the plot and provide the road layout and basic infrastructure facilities. There exists no Grade-A plotted developments in the city at present. Villas are the most desired typology. However, the higher costs of villas have resulted in preference for apartments, which in turn resulted in the growth of apartment projects in Thrissur. Apartments constitute 68% of the residential supply of the city. The land cost and construction cost is higher for villa developments. Cost for a typical 3-BHK Villa in the city varies from INR 3.0-6.6 million and the prices may go as high INR 12.5 million for Grade-A developments. This is one of the major reasons for the shift towards apartment preference in the recent years in the city. Villas are mainly confined to suburbs and peripheral locations of the city. Especially northern quadrant of the city constitutes about 50% of the total villa projects.

Following are the major findings from the residential sector analysis for the city:

. Residential activity is high in suburbs and peripheral areas due to good connectivity, availability of social infrastructure facilities, low land cost and also availability of land parcel for development. . Majority of the Grade-A developments in the city are located at the PBD areas such as Ayyanthole, Puzhakkal and Kuttenalloor. Whereas the Grade-B & C projects are at the SBD locations. CBD is having low residential supply owing to the high land values and the unavailability of land parcels. This indicates the spread of high spending population to the outskirts propelling growth of real estate activity to such locations. . Demand - residential property market caters to both end users and investors with average demand of about 300-500 units per annum. Demand for mid-segment from end users while demand for premium segment from NRKs. . Supply - city residential market is dominated by the Grade-B developers contributing to 43 percent of the total supply followed by Grade-A & C of 971 & 663 units. But in-terms

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of projects local developers especially the Grade-C developers contribute to 40 percent followed by Grade-B & A 37 & 23 percent. . Typology - 53% of supply comprises of 3-BHK units followed by 2-BHK units of 37%, 4- BHK units constitute 10% of the total supply. . Residential rental market scenario in the city has increased significantly due to exponential increase in land value across the city along with development of new/emerging economic drivers. . Good demand for gated community projects with full-fledged amenities and pricing in such projects ranges from INR 6 -15 million per unit. . Integrated residential townships concept is still nascent as compared to other cities. Sobha City is only Graded integrated residential project in the city. Amenities offered by the high end projects include clubhouse, swimming pool, landscaped parks, children’s play area, CCTVs, security etc. Emphasis is high on specifications and materials used, integrated amenities and support facilities

Market Trends - Apartment Typology

Supply: About 48% of total apartment supply is in the SBD locations with northwest and southern areas taking the largest share of 35% and 18% respectively. CBD accounts for about 13% of the total apartment supply and PBD locations accounts for approximately 39% of the total supply. The share of southeast and western SBD is only 6% each. The northeastern SBD are in the early stages of development as majority of the land parcel is owned by the various government departments. Grade-A & B developments constitute 61% of the overall supply.

Absorption: The average absorption in the city for all the graded projects (Villas & Apartment) is around 62%. Grade-B & C projects had the highest absorption of 75% and 55% respectively depending upon the location and whereas the Grade-A projects has an average absorption of 60%. There is a marginal increase in the absorption figures from 2011 to 2012 due to weak economic scenario across the country.

Pricing: The average price range of apartments constituting all grades5 (Grade A, B & C) in the CBD range between INR 2,600-5,000 per sq. ft. SBD locations like Punkunnam, Ayyanthole, Poothole, etc. have prices ranging between INR 2,400-3,700 per sq. ft. whereas the prices in PBD areas range between INR 2,320- 3,200 per sq. ft. The table below presents historic trends in capital values of residential apartments in the city across different micro-markets.

Table 3.4: Historic Trends in Residential Apartment Capital Values in Select Micro-Markets in Thrissur City Micro-Markets Residential Apartment Capital Values - Average Price (INR per sq. ft.) 2008 2009 2010 2011 2012 1Q 2013 CBD (Swaraj Round) 2,950 2,800 3,150 3,250 3,800 4,200 Patturaickal 2,200 2,150 2,500 2,600 3,200 3,500 Punkunnam 2,700 2,600 2,950 3,050 3,100 3,250 Ayyanthole 2,750 2,750 2,860 2,910 3,200 3,300 Chembukavu 1,900 2,000 2,300 2,500 2,900 3,200 Kuriachira 2,650 2,565 2,780 2,900 3,200 3,250 West Fort 2,400 2,320 2,700 3,000 3,300 3,400 Kuttenallor 2,250 2,100 2,500 2,600 2,800 3,100

5 Classification of Grade is based on the Scale of Development, Development Profile (includes market penetration), Specification and Quality of Construction

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Micro-Markets Residential Apartment Capital Values - Average Price (INR per sq. ft.) 2008 2009 2010 2011 2012 1Q 2013 Poothole 2,475 2,350 2,700 2,775 2,850 3,000 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Typology and Size: Most common typologies of the apartments are 2-BHK and 3-BHK units. Typically, sizes of 2-BHK units range between 741-1,200 sq. ft. while that of 3-BHK units range between 1,200-1,500 sq. ft. Sizes of 4-BHK units range between 1,800-2,250 sq. ft. while that of 5-BHK units range between 2,200-2,500 sq. ft.

Charges: Other than sales price on saleable / super built-up area, developers also charge other charges as described in the table below.

Table 3.5: Other Charges Levied for Residential Developments in Thrissur Parking Charges Parking charges varies from INR 100,000 to INR 250,000 Club Membership Charges Ranges from INR 50,000 to INR 100,000 (Note: Very few prominent graded developers charge club membership charges) Floor Rise Varies from INR 10 per sq. ft. to INR 30 per sq. ft. of every 3 floors. Further a similar premium is sometimes attached based on the apartment facing. Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Table 3.6: Prominent Graded Residential Projects in Thrissur City Project Name Developer Location Status of Project Units Pricing (INR (Nos.) per sq. ft.) Alukkas Alukkas Builders Olari Completed 107 3,400 Bhavanam Alukkas Parpidam Alukkas Builders Completed 6 3,100 Alukkas Castle Alukkas Builders Ayyanthole Completed 110 3,200 Sobha City Sobha Along SH-69 Under Construction 648 4,500 Developers Alukkas Nest Alukkas Builders Off Swaraj Round Under Construction 36 5,000 Krishna Unidesign Close to Under Construction 11 4,000 Chembukavu Chandra Unidesign Post Office Road Under Construction 6 2,750 Axis Skyline East fort Junction Under Construction 3,400 Infinity Skyline East fort Junction Under Construction 44 3,500 Trichur Builders Swetha Close to Swaraj Under Construction 35 3,500 Residency Round Trichur Builders Meghna S.T. Nagar Under Construction 35 3,600 Residency Trichur Builders Indus Avenue Viyyur Under Construction 77 -- Chelakottukara Kalyan Habitat Jubilee Mission Under Construction 66 3,100 Hospital

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Project Name Developer Location Status of Project Units Pricing (INR (Nos.) per sq. ft.) Aashiyana Devdatham North Bus Station Under Construction 55 3,900 Builders Lisieux Sun Rays Oralikara Under Construction 30 3,200 Swapanpuri Local Player Chembukkav Under Construction 21 3,500 Apartment Namasthe Legacy Namasthe Chembukkav Under Construction 12 4,000 Kerala Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Profile of Residential Buyers in Thrissur

NRI segment is the key buyer segment of residential apartments in the city. The non- resident Keralites who have been residing abroad for a long while buy homes for the purpose of investment and sometime for self-use on a later date. The table below indicates the profile of buyers for few established developers in the city.

Table 3.7: Profile of Buyers in Thrissur for Residential Apartment Projects Developer Investors End users NRI Sales Skyline Builders 10% 12% 78% Alukkas Builders 12% 13% 75% Cheloor Property 10% 10% 65% Penark Builders 25% 20% 55% Thrissur Builders 35% 35% 30% Unidesign 8% 12% 80% Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The buyers of luxury residential developments are primarily the NRIs who work in the shipping industry and oil companies in Middle East. The domestic buyers who purchase luxury residential developments are primarily the traders, large scale agriculturists, doctors, industrialists and other high earning professionals. The NRI demand has reduced in the recent past due to the economic downtrends in the Middle East. However, market perceives the same as a temporary phenomenon.

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Map 3.3: Key Residential Development Projects in Thrissur City

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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3.3 CORPORATE / OFFICE (COMMERCIAL) SUB-SECTOR

The commercial / office sub-sector in the city is fairly small. There are not many graded commercial / office spaces in the city. The major proportion of commercial space is located in the CBD, along the high streets occupying the upper floors while the lower floors are used for retail use. The principal driver of commercial space in the city is primarily the financial institutions followed by tour & travel agencies, training institutes and the government sector. The Banking & Financial sector has all chosen to have their offices in the CBD. However, there few proposals under consideration by few developers to target ITES sector, which is one of the upcoming economic driver for the city.

As stated above, the commercial / office spaces are primarily concentrated in the Swaraj Round followed by the radial roads such as MO Road, MG Road, Kuruppam Road, etc. Offices occupy the upper floors of the buildings in these pockets with retail on lower floors. New commercial establishments are upcoming along the Guruvayoor Road, Shornur Road, etc. The prime areas of commercial activities in the city comprises of Swaraj Round, MG Road, MO Road, West Fort Junction, Veliyannur, Punkunnam, Kuruppam Road, Shornur Road, Thrissur Kuttippuram Road (SH-69) and Ayyanthole, etc.

Present Scenario

Swaraj Round forms part of the CBD of the city. The round encircles the Thekkinkadu Maidan, which is approximately 65 acres in area. The road forming the perimeter of the Round forms the Swaraj Round and it is approximately 2.5 km length. The round is dominated with Grade B and Grade C standalone commercial and retail developments. The Banking, Financial Services & Insurance (BFSI) forms the most prominent sub-sector followed by the offices of educational institutions, software training institutions, travel agents, etc. Few of the government offices are also located in the Round. Some of the select major commercial establishments in the Round are listed in the table below.

Table 3.8: Major Commercial Establishments in Swaraj Round, Thrissur State Bank of CADD Centre KSFE Western Union Vijaya Bank Central Bank of India Dhanalakshmi Bank Life Insurance Corporation Catholic Syrian Bank HCL Corporation Bank Indian Bank Dharmmodayam Company Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

There are several buildings constructed by the PWD for the Corporation and these are leased to companies on a long term basis. Existing office space locations have been facing problems like traffic congestion, parking problems, etc. Majority of the buildings have smaller floor plates and are provided with air handling units. Commercial / office spaces are concentrated along three roads, viz. MG Road, Shornur Road and Palace Road. Brief description of developments along these roads are given below:

. MG Road connects West Fort Junction and Swaraj Round. This stretch houses primarily educational institutions imparting software training and BFSI offices. The

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tenants include IndusInd Bank, Dewan Housing Finance, HDFC Standard Life, Image Multimedia, Kerala Infotech, Catholic Syrian Bank, etc.

. Shornur Road connecting Swaraj Round and Patturaickal Junction is another important stretch for commercial development. Patturaickal Junction houses majority of the government offices. The major tenants in the stretch include ICICI Bank, Asianet Communications, Trichur Cooperative College, Office of Vigilance and Anti-Corruption Bureau, Fisheries Office, etc.

. Palace Road is a major retail destination. However, few offices are also located in this stretch. The major tenants here include State Bank of India, New India Assurance Co. Ltd, UTI Mutual Fund, etc. Department of Education offices, Kerala Sahitya Academy, Town Hall, etc. are also present in this stretch. College Road connects Swaraj Round and East Fort. This stretch houses the district hospital, Catholic Syrian Bank, Cooperative Bank, travel agencies, office of DMO, etc. Municipal Office Road and Kuruppan Road stretch houses primarily the corporation office. Apart from these, the nodes such as East Fort, West Fort, Patturaickal, etc. houses few commercial developments.

The table below provides an insight into the prevailing lease rentals in select prime locations for commercial space in the city.

Table 3.9: Lease Rentals for Commercial Space in Prime Locations within Thrissur City Location Quality of Space Lease Rentals (INR per sq. ft. Capital Values (INR per per/month) sq. ft.) Swaraj Round Grade B/C 70-150 6500 - 20,000 MG Road Grade B/C 50 - 80 5000 - 8500 Kuruppam Road Grade B/C 50 - 55 5000 - 6000 Shornur Road Grade B/C 40 - 50 4000 - 5000 College Road Grade B/C 30 - 50 3000 - 5000 Patturaickal Grade B/C 20 - 50 2000 - 5000 West Fort Grade B/C 50 - 70 5000 - 7200 East Fort Grade B/C 25 - 65 2500 - 6500 Punkunnam Grade B/C 25 - 65 2500 - 6500 Ayyanthole Grade B/C 30- 60 3800 - 6500 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

New Developments

The new developments along these stretches are the high street format with retail on ground floors and commercial developments on the upper floors. Graded developments under commercial / office space in the city are yet to come up.

There are several IT park projects under proposal. Brief description of these proposed developments are given below.

. Info Park: Kerala IT Department is developing an IT park on 30 acres of land at Koratty and the Infrastructure development work has already commenced. The proposed allotment is for 42 acres but at present possession of only 30 acres of land has been provided. The Park is situated very close to the NH-47. The first set of IT Buildings of approximately 40,000 sq. ft. area with plug and play facilities is ready to occupy and

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companies have started setting-up operations here. Next phase of development is likely to have additional IT office space of about 30,000 sq. ft. . KINFRA is working on a ‘Knowledge Park’ in the city. The proposed Knowledge Park will be dedicated to knowledge based industries such as biotechnology, nanotechnology, microelectronics, information technology and information technology enabled services. While KINFRA will provide the land for the proposed Knowledge Park on a long-term lease, the actual development of the Park will be left to the developer. This is located on 40 acres of land in Puzhakkalpadam. . Elite Group of Companies has proposed to build an IT/ITES Park at , on a 25-acre SEZ campus with a total capital outlay of INR 5.20 billion. Project is expected to be implemented in four phases spanning six years. Out of the total land area, 57 percent will be used for processing and support services, 11% for non-processing and 32% for open landscape and internal roads. The expected total built up area is 2.2 million sq. ft. and of which 1.8 million sq. ft. will be for processing area. The IT Park is expected to generate 15,000 direct employments at full capacity on single shift basis. . Al Yusafi Group, a Kuwait based group has purchased 60 acres of land along NH-47 for developing a hi-tech factory for production of home appliances. An International Exhibition Centre, and a super-specialty cardiac hospital is also proposed in the same campus. Adlux Properties have plans for developing an IT park also as part of the development.

3.4 ORGANIZED RETAIL SUB-SECTOR

The recent retail revolution in the country has been penetrating to smaller cities as well. The rising income levels, changing attitudes towards spending, increasing consumerism resulted in large-scale growth of retail activity in smaller cities including in Thrissur. Like several emerging cities in India, retail activity in the city are of traditional format, concentrated in the city center and expanded along major corridors. As on date, the city is yet to have an operation retail mall of large-scale while a retail mall of about 320,000 sq. ft. size is under construction as part of the integrated development in Sobha City Project.

Key Development Zones

The city has high-street retail format with activities along Swaraj Round, and the radial roads close from the Round, which forms part of the prime CBD. Below are the major brands in each retail category:

. Apparel: Kalyan Silks, Pulimootil Silks, Sree Lakshmy Silks, Sobha Wedding Galaxy, Van Heusen, Scullers, Arrow, Indigo Nation, Koutons, Raymons, Lee, Levis and United Colour of Benetton . F&B: Dominos, Chicking, US Pizza, AFC,, Baskin Robbins, etc. . Supermarkets: Varkeys, Reliance Super, Elite, City Super Market . Hypermarket: Big Bazaar

The major retail format in the city is the traditional and modern streets, and the major retail clusters are given in the table below.

Table 3.10: Overview of Retail Market in Select Zones of Thrissur City Sl. Zones Major Locations 1 Central (CBD) Swaraj Round and the radial roads 2 North Patturaickal, Shornur Road and its extension 3 East East Fort, College Road, Palace Road and its extension 4 West West Fort, MG Road and its extension 5 South MO Road and Kuruppam Road and their extension

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Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The table below presents characteristics of the select high-street retail markets in the City.

Table 3.11: Overview of High-street Retail Market in Thrissur City Market Type Brands Present Remarks Swaraj Round Apparel, Jewellery, Kalyan Silks, Kalyan Prime high street of the city Accessories, Jewellers, Alukkas jewellers, Footwear, Casuals, Malabar Gold, Josco, Bata, Supermarket Varkeys, Elite, City Super Market, Titan, Citizen and Louis Philippe, etc. Patturaickal Supermarkets, Big Bazaar, Next, Emerging high street of the Apparels, Electronics Sreelakshmi Silks, etc. city Goods East Fort, F&B, Supermarket Chicking, US Pizza, Baskin Good catchment of the College Road Robbins, Reliance Super, etc. student population stretch Palace Road Jewellery, Apparels, Josco, Kalyan, Pulimootil Silk Most favoured retail area for etc. House, Central book stall, etc. jewellery and apparel. MG Road Apparel, footwear, Puma, Woodland, Bata, One of the developing retail electronics, etc Arrow, Woodlands, LG stretches Shoppe, DC Books, etc. Kuruppam Road Apparel, Hardwares, Van Heusen, Fridgehouse, One of the major retail high Electrical Goods, etc. Raymonds, etc. streets after Swaraj Round Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Market Trends

The table below presents an insight into the prevailing lease rentals and capital values in select prime locations in the city for retail space.

Table 3.12: Lease Rentals and Capital Values for Retail Space in Thrissur City Location Quality of Space Lease Rentals (INR per Capital Values (INR per sq. ft. per/month) sq. ft.) Swaraj Round Grade B/C 75 - 120 7500 - 12000 MG Road Grade B/C 60 - 80 6000 - 8000 Kuruppam Road Grade B/C 60 - 80 6000 - 8000 Shornur Road Grade B/C 40 - 60 4000 - 6000 College Road Grade B/C 50 - 70 5000 - 7000 Patturaickal Grade B/C 30 - 60 3000 - 6000 West Fort Grade B/C 50 - 80 5000 - 8000 East Fort Grade B/C 25 - 40 2500 - 4000 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The retail market in CBD is dominated by large format jewellery and local branded apparels such as Kalyan Silks, Sreelakshmi Silks, Sobha Wedding Galaxy, etc. Very few stand-alone fine dining restaurants exist in the CBD. The map in the following page indicates the major retail stretches in the city.

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Map 3.4: Map Showing Major Retail Corridors of Thrissur City

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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The major corridors witnessing retail developments are Shornur Road, Guruvayoor Road and Palakkad Road (College Road). The developments are notable towards the Northwest, North and East directions. The other areas are primarily residential and the supermarket and neighborhood shopping formats of retail outlets are found in these residential pockets. Shornur Road has formats such as Big Bazaar, Next, Sreelakshmy Silks, etc. Guruvayoor Road houses vehicle showrooms and food outlets primarily. The Palakkad Road is a major destination of F&B outlets and super market formats such as Reliance Trends. The road connecting to Ayyanthole also houses retail formats. This location is an emerging prime residential area owing to the presence of the civil station and other government offices.

Most of the retail shops are own premises. Most of the retail shops have areas ranging between 2,000 sq. ft. to 6,000 sq. ft. Some of the shops like Kalyan Collections, Modern Dress World, , Pulimootil Silk House, Sree Silks, Chungath Jewellery and Kalyan Silks have area between 10,000-20,000 sq. ft. Big Bazaar, Center Point and City Center have 40,000-45,000 sq. ft. while EMKE Silks Kundungalur Shornur Highway has a shop of size 160,000 sq. ft.

The table below presents lease rentals for select retail shops in the city.

Table 3.13: Lease Rentals for Retail Space in Prime Locations in Thrissur City Location Lease Rentals (INR per High Rental Paying Tenant/ Complex sq. ft. per month) Swaraj Round 60-150 Kalyan Silk MG Road 50-100 -- Kuruppam Road 60- 80 Louis Philippe Shornur Road 40- 65 Van Heusen Store in Trichur Trade Center College Road 50- 80 -- Patturaickal 45- 80 Jeva Tower West Fort 50 -100 -- East Fort 35- 75 -- Ayyanthole Road 45-60 -- SH-69 (Thrissur Kuttipuram Road) 45-100 -- Near Vadakke Bus Stand 80-120 Vijas Infra Project Oralikkara 20-35 -- Ashwini Junction 45-80 -- Poothole 40-90 Pent Park Apartment Ikkanda Warrier Road, or Malayala 40-90 CJ Complex Manorama Road High Road 40-60 Fabis Arcade Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Upcoming Retail Mall

Sobha City Mall is the only mall, which is under construction in the city. This mall is located at a distance of about 1 km from the Project Site, along SH-69. This is part of the integrated development covering an area of about 55 acres

The mall is coming up 4.7 acres, with gross leasable area of about 320,000 sq. ft. The mall is proposed to have Hypermart (2 Nos.), Departmental Store (2 Nos.), Mini Anchor (Electronics & Home Furnishing), Vanilla/ Line Stores (40 Nos.), Kiosks, 7 Screen Multiplex, Restaurants & Food Court, etc.

Anchor space is likely to be retailned by Sobha Group while the developer is in active discussion with PVR Cinemas for multiplex. Several shops have been sold with price ranging from INR 4,500-9,800 per sq. ft.

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The broad breakup of the leasable area is presented in the table below:

Table 3.14: Leasable Area Details in Sobha City Mall in Thrissur City Format Type of Store Floors Remarks Large Hypermart Ground & 1 store spread across two floors with size ranging from First 35,000- 40,000 sq. ft. in total Department Ground & This format accounts for about 2 in no., size of this format Store Second ranges from 15,000- 20,000 sq. ft. Multiplex Second The multiplex is planned with 7 screens The size ranges from 45,000-50,000 sq. ft. Medium Electronics Ground Size of this format ranges from 12,000-14,000 sq. ft. Food Court Second Size of this format ranges from 10,000-12,000 sq. ft. Home Second Size of this format ranges from 12,000-14,000 sq. ft. Furnishing Small Line Stores/ Ground, Vanilla format accounts for about 40 in nos. with size ranging Vanilla First & from 700-1000 sq. ft. Second Presently majority of the line sores are sold out at capital values in the range of INR 4,500-9,800 per sq. ft. Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

3.5 HOSPITALITY SUB-SECTOR

With the growing importance of tourism sector in the state as well as in the city, hospitality sub-sector is one of the key drivers for real estate development in the city. The city functions mostly as a transit point for domestic and foreign tourists. Thrissur has a high incidence of domestic tourists, which can be contributed to the presence of major religious destinations.

The hotels in the city cater to both business travelers and tourists. The occupancy rates vary from 60-80%. Few business class hotels in the CBD have occupancy rates as high as 87% throughout the year. The city witnesses deficiency in accommodation during the peak tourist season, typically, during April-May when the Pooram Festival is held in the city.

Stock & Supply

The total supply of standard hotel rooms in the city is 758 (excluding tourist home, home stay & lodges). There are several 3-star category hotels in the city. Present supply indicates that 63% of the inventory is under 3-Star category. The table below provides inventory of prominent hotels in the city.

Table 3.15: Inventory of Prominent Hotels in Thrissur City Hotel Name Location Keys Average Daily Room Rate (INR) (Nos.) Min Max Suite The River Retreat Palace Road 24 2,775 5,200 6200- 11330 LULU International Off SH-69 35 -- 4000 7000 Convention Center Casino Hotels T B Road 51 1,700 3,200 6,500 Joys Palace Saktan Tampuran Nagar 58 3,400 4,400 8,500 Hotel Niya Regency Olarikkara 30 2,200 2,700 5,000

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Hotel Name Location Keys Average Daily Room Rate (INR) (Nos.) Min Max Suite Ashoka Inn Sakthan Thampuran Nagar 34 -- 2,900 5,500 Trichur Towers Hotel T B Road 25 1,500 1,900 4,900 Sidaartha Regency Junction 25 850 1,350 -- Hotel Pooram International Kuruppam Road 62 2,200 4,000 5,000 Central Hotel Chembukavu 10 -- 1,700 2,200 Hotel Elite International Chembottil Lane 72 1,500 1,900 3,000 Dass Continental Sakthan Nagar 27 2,300 2,800 4,000 Mannapuram Hotels Kuruppam Road 76 1,050 1,550 2,300 Hotel Seafort Rly. Station Road 47 1,800 2,160 -- Ammu Regency Marar Road 27 1,400 1,600 2,200 Hotel Pearl Regency Warriam Lane 35 1,500 1,850 2,600 Hotel Merlin International Poothole Road 21 1,450 1,700 2,300 Hotel Luciya Palace Kuruppam Road 37 1,700 2,700 -- Elite International Chembottil Lane 72 1,500 2,800 3,000 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

A 5-Star category hotel is proposed to be developed at Puzhackal in the Lulu International Convention Centre. Another hotel is proposed is near the NH Bypass in the land holding of Emfar Group.

Average Daily Room Rate & Occupancy

The Average Daily Room Rate (ADR) across the starred category hotels in the city is INR 2,562 per day on an average and the average occupancy is about 65%.

3.6 MICE SUB-SECTOR

3.6.1 GENERAL SECTOR TRENDS

“MICE tourism” is a comparatively new format of tourism which has emerged Market share for Meetings, 2008 with the increase in conventions and exhibitions along with the maturity of the 5% 3% tourism sector. There is no unified definition for MICE Tourism at present. This includes various Meetings (M), 22% Conventions (C), Incentive travels (I), Exhibitions and Fairs (E), Festivals, anniversary celebrations and other 52% activities. The enormous economic and social effects of the sector to the community resulted in the sector being known as: “the pearl of tourism crown”. 18%

Sources estimate that the MICE market is worth around USD 280 billion a year Europe America (North & South) Asia Africa Australasia/Pacific worldwide. It is understood that at least

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50 million trips are taken each year for MICE purposes. The worldwide market share for meetings by continent is indicated in the chart on the right hand side. A major pie of the meetings happens in Europe followed by Asia and America. Till the early nineties, North America and Europe had dominated the conventions and conference markets. The US still holds the top spot for the highest number of meetings as a single country destination. However, the market has moved towards newer destinations in Asia and Oceania in the recent past. Europe accounts for the maximum share with over half of all international meetings. However, there is a constant decrease in share of Europe, while Asia and Oceania are gaining. The top ten countries in the descending order are USA, France, Singapore, Japan, Spain, Germany, Netherlands, Italy, Belgium and UK. India is ranked 27th with approximately over 250 meetings6.

Medical sciences remain a popular area for international meetings accounting for about 33% of all meetings. The other top sectors are Science (13%), Technology (7%), Industry (7%) and Social Sciences (4%). As far as seasonality is concerned, the industry worldwide shows seasonality, with September, October and November being the busiest periods for convention tourism.

Meetings and conventions offer high value addition in terms of delegate expenditure and also serve the dual purpose of promoting international relations. It is a highly profitable form of tourism as most delegates are subsidized and tend to use costly accommodation and often travel before and after the event. In addition, by organizing during the off- seasonal months, one can remove the seasonality effects of leisure tourism. Thus undesirable social effects of seasonal tourism such as migration, temporary employment and job instability can be avoided. These events can also be termed as “knowledge tourism” as they promote the exchange of ideas, technology and commercial knowledge that contribute to an intangible but important source of value add to the economy of the host country. The MICE sector also helps increase local government and private sector investments that result in improvements in the general hospitality environment of the destination country.

The sector and trends can be summed up as follows. . MICE tourism offers countries the opportunity to grow tourism particularly out of season. . The destination image of a country is of particular value in the development of MICE tourism. . The new consumer trends are of particular importance in the development of this format of tourism. . The education of expert human resources to manage MICE development is a key priority.

3.6.2 MICE MARKET - INDIA’S GLOBAL POSITION

Background

Tourism has been marketed under various segments (sports, art, leisure, heritage, agro, medical, aboriginal tribe, culture, etc.) with the MICE (Meetings, Incentives, Conventions and Events) segment being one of the fastest growing segments in the tourism market that brings in together individuals for business purposes.

The inbound MICE segment in India is growing at 15-20% per annum. It is estimated that the total national and international MICE meetings market all over the world is in excess of USD 280 billion. According to industry estimates, the India contributes to almost 3-4% of the global earnings through MICE activities.

6 Source: International Meeting Statistics, Union of International Association

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India ranks 27th in the Global Meetings market and 7th in the Asia Pacific region by the number of international conventions hosted each year 7 . Most of the international convention centers in Asia Pacific region are integrated facilities with accommodation, entertainment, shopping along with the convention, exhibition and business center facilities. The table below presents market share of MICE in Asia Pacific:

Table 3.16: Market Share of International Conventions and Meetings in Asia Pacific Sl. Country Market Share in No. Asia Pacific Market Share of International Conventions and Meetings in Asia 1. Japan 20 Percent Pacific 2. Australia 19 Percent India Malaysia Japan 9% 6% 20% 3. South Korea 14 Percent Thailand 10% 4. China & Hong 11 Percent Kong Singapore Australia 11% 19% 5. Singapore 11 Percent China & South Hong Korea Kong 14% 6. Thailand 10 Percent 11% 7. India 9 Percent 8. Malaysia 6 Percent Source: Union of International Associations Press

According to the Union of International Associations Press (UIAP), India share of the market for hosting international conventions is increasing at the rate of 9% per annum for past two years. India is going the global way and MICE is fast becoming a major part of its travel and promotional budgets. In the Indian context, incentives is at present the largest component of MICE but in a maturing market, it is only a matter of time before the entire gamut of MICE activities are undertaken by the Indian corporate world.

Economic Advantage

MICE segment is a major revenue spinner. As per the assessment conducted by the UIAP, every Rupee spent on any MICE event, it is providing eight times the turnover from the supporting facilities (travel, F&B, accommodation, etc.). Every MICE traveler spends almost double of what a normal tourist spends during his short stay. The incentives program is one of the biggest revenue spinners. This has always brought in higher percentage of Foreign Tourist Arrival (FTA) in Indian market, which constitutes maximum percentage of business visitors. However in the last 18 months MICE tourism, which accounts for 5-10% of the total revenue of tour operators, has taken the maximum hit during this economic downturn. Companies in the fast moving consumer goods, insurance and entertainment sectors normally offer the highest number of MICE trips to employees and sales dealers. Companies had stopped MICE trips for their employees and for the sales dealers; they had postponed the trips over few months for the global recession to settle. A few companies, including insurance firms, which offered incentive program facilities, had entirely stopped for their external sales associates, according to most travel companies. However, 2013 is being viewed optimistically, and the industry is hoping this lucrative sector will bounce back.

Pan India understanding of conventions and exhibitions is required to realize the market potential for the same in India. With the tourism sector also, focusing on increasing the market share through MICE sector, it becomes essential to realize the business presently in operation and also that is realizable in the coming years. The Government of India has recognized the emerging importance of MICE, and has announced several schemes to

7 Source: International Meeting Statistics, Union of International Association

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increase the capacity of existing infrastructure, in addition to setting up four new world class mega convention centres in New Delhi, Mumbai, Jaipur and Goa. That apart, the MoT, in order to boost MICE tourism further, has extended its benefits under the Market Development Assistance (MDA) scheme to the active members of ICPB, towards the bidding process for international conferences /conventions. The scheme would bring in more MICE business to the country. Under this scheme, associations would be given financial support on winning the bid or for obtaining second and third positions in the bidding process

Infrastructure

India provides an impressive combination of conference support facilities like venue, travel, accommodation, technology, event organizers, recreation, etc. to hold a successful conference / exhibition. To mention a few; Vigyan Bhawan, Pragathi Maidan, India habitat Center (IHC), India International center (IIC) etc. in New Delhi, Center Point, Renaissance Hotel, Convention Center in Mumbai, HITEX and HICC in Hyderabad, CTC in Chennai, the BM Birla Science and Technology Centre in Jaipur, the Jaypee Hotels & International Convention Centre, Agra Convention Centre and the Cochin Convention Centre, etc. together with facilities in the business hotels and resorts at various centers in the country.

A large number of convention centers are available in India with a seating capacity of up to 1,500 persons. Most MICE events are normally up to 1000 capacity for which there are number of options across India. India also has vast geographical expanse with varied climate features that is an advantage for organizing events throughout the year in the location that has suitable climate during the time. The larger congregations are very few and normally held in HICC (5000 capacity), Mumbai grounds, Pragathi Maidan-Delhi, Palace Grounds in Bangalore etc. With all the facility presently existing it is still realized that there is lack of organized area as in HICC, Hyderabad with world class facilities that can attract the MICE events multi-fold. This is also attributed to the less marketing strategies adopted by MoT. The same is being addressed through MDA scheme as discussed above.

The estimated number of hotel rooms in India with respect to the demand is found to be lower by almost 30,000 rooms as per MoT analysis. The number of budget hotel rooms are less as compared to assessed and this is also cited to be a reason for slow off take of MICE segment in India. In order to address this issue Reserve Bank of India (RBI) has de- linked credit for hotel projects from commercial real estate, thereby enabling hotel projects to avail credit at relaxed norms and reduced interest rates. In addition, the External Commercial Borrowing (ECB) norms have been relaxed by Ministry of Finance to solve the problem of liquidity being faced by the hotel industry due to economic slowdown.

The air connectivity which is also important criteria for MICE industry performance has been addressed by GoI. Many metro and 35 non-metro airports were taken up under up gradation program and most of them are either completed or reaching completion (source: AAI)

3.6.3 THE INDIAN CONVENTION INDUSTRY

Revenue Spinner Effect

MICE market in India can be realized in numbers and the revenues earned through the table below:

Table 3.17: Market Performance of MICE Market in India Sl. No. Event Type No. of Events Revenue per Year (INR in Million) 1. Conventions 1,600 620.10

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Sl. No. Event Type No. of Events Revenue per Year (INR in Million) 2. Meetings 44,300 1605.70 3. Exhibitions 300 5600.00 Total 46,200 7825.80 Source: Study by Feedback Ventures and IDFC on MICE Market in India

The international events that have, over the years, developed an institutionalized character include International Security Exhibition, Aahar (Food Expo), Printpack India, Delhi International Shoe Fair, Tex-Styles India, the India International Trade Fair, Prakash (Lighting Exhibition) at Pragati Maidan , the India International Leather Fair (at Chennai) and International Leather Goods Fair (at Calcutta). These exhibitions enjoy tremendous industry support, both from the point of view of participation and visitor turnout from India and abroad.

Locations

Important conference centers in the country are at New Delhi, Mumbai, Agra, Bangalore, Chennai, Cochin, Goa, Hyderabad, Jaipur & Kolkata. Some important hotel chains like the Taj Group, ITC-Welcome Group, the Oberoi's, Meridien Hotels, and Marriott Hotels, etc. also have excellent conference facilities and obtain a large share of revenues through MICE operations of industries. The table below summarizes availability of facilities for MICE events in some of the select major cities India.

Table 3.18: Availability of Facilities for MICE Events in Major Cities in India Sl. Name of the City Availability of Facilities for MICE Events 1. Delhi (New Delhi) India's premier conference venue is still the Vigyan Bhavan, which is mostly used for government functions or international events. After extensive renovation, Vigyan Bhavan facilities are now on par with some of the best in the world. With a capacity of 2,400 in theater-style, it is the largest facility in India. To give a further boost to convention business, the government has decided to set two international convention centers in the country with an investment of USD 222 million. Most of India's convention facilities are located in the country's five-star hotels. The MICE industry in Delhi is sized more INR 2.00 billion. It is the key MICE destination in India presently and contributes nearly 30 percent of the industry in India. 2. Mumbai There are more than 72 star (3 star and above) category hotels which have convention / banquet halls. These hotels and stand alone convention centers have a combined capacity of 194 banquet halls with an average number of 2.75 halls in each center / hotel. In terms of number of banquets and convention halls, Hotel Oberoi tops the chart with 12 halls having a total of 330,268 sq. ft. of built up space with a total capacity of 2245 persons. The largest convention hall in this hotel has a capacity of 1,000 sq. ft. with minimum revenue earning potential of INR 243,000 per day. The total revenue potential for all the banquet halls in the Hotel Oberoi ranges between INR 1.26 million to INR 1.95 million per day 3. Pune There are more than 40 star (3 star and above) category hotels in Pune with more than 12 hotels having convention / banquet halls. These hotels and stand alone convention centers have a combined capacity of 41 banquet halls with an average number of 3.7 halls in each center / hotel. In terms of number of banquets and convention halls, Hotel Le Meridian tops the chart with 7 halls with a total capacity of 1,500 persons. Government of has given a go ahead to establish this International Exhibition Center at Moshi, District Pune on an area of 170 hectares with most advanced

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Sl. Name of the City Availability of Facilities for MICE Events technological features. 4. Kolkata There are not many convention centres in Kolkata. The major one operating is at Science City, which is a complex for promoting science and technology to the general public. The convention centre, which is part of this complex, is rented out to public and is popular for national and international conventions. However the maximum capacity the main hall can hold is 2000 persons. Apart from this, all the major 5 star hotels have facilities for conventions and conferencing ITC Shonar Bangla hotel, Hyatt Regency, Grand Oberoi, Taj Bengal and The Park. In terms of number of banquets and convention halls, ITC Shonar Bangla has nearly 9 halls with varying capacity of 24-700 and Oberoi Grand can take max. capacity of 1000 persons. 5. Hyderabad There are nearly 27 star category hotels in Hyderabad with in-house convention facilities. Only Mariott Hotel (Viceroy) and Novotel have convention facilities that can handle crowd up to 2,000 plus persons. All others cater to smaller conventions / meetings in Hyderabad (b/w 150-500 maximum, average - 350 persons). The average rentals per day for the convention facilities attached to hotel is approximately INR 450-500 per person per day 6. Chennai There are nearly 25 star (3 star and above) category hotels, which have convention / banquet halls. Only 3 hotels have convention/meeting halls that can hold capacity of 1,000. The others can hold only about 300 and below as maximum capacity. Although there are more than 25 hotels with an average of 3 halls per hotel there is no space for large conventions/meetings.

Following table provides an insight into the most sought convention facilities in India:

Table 3.19: Most Sought Convention Facilities in India Sl. Facility Land Exhibition Hall Convention Facility and Seating No. Area (in Capacity Acres) 1. Pragati 149 62,650 sq. m. of covered Small conference facilities for 200 Maidan exhibition space in 17 halls persons only. Outdoor seating & besides 10,000 sq. m of open theaters present for large display capacities 2. Chennai 25 More than 19,238 sq. m. 1500 persons Trade Center 3. HITEX, 100 32,825 sq. m. 1350 persons Hyderabad 4. HICC 15 NA 5000 persons Hyderabad 5 BIEC 35 45,000 sq. m. (2 halls of 10,000 1500, 750. 200 and 120 capacity Bangalore sq. m. each and one hall of halls 20,000 sq. m. with mezzanine of 5,000 sq. m.)

Delhi leads the MICE segment in India with the advantage of being the capital city and best infrastructure facilities. Mumbai, the financial capital has around six large grounds/ exhibition spaces and most entertainment, religious, economic events are held here. Hyderabad is fast emerging MICE center in India since the opening of HICC in 2006. The number of exhibitions/conventions held in this center has been growing multifold. HICC hosted ICCA meet in 2010 which was one of the large global meets of ICCA. Chennai

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Trade Center is the most sought out exhibition complex in South India due to lack of such facilities and also owing to the lower costs compared to HITEX-HICC in Hyderabad.

Conventions by Category and Days

There are more than 45 categories listed under industries that conduct exhibitions, seminar, conventions in India, etc. However, some of the leading industry segments for exhibitions in India are Information Technology, FMCG, beauty and fashion, hardware & machinery, environment, printing and packaging, medical/pharma, gifts, textile and garments, real estate, furniture and interiors, media, engineering etc.

Considering textile industry alone, nearly 27 Industry trade fairs, more than 10 prominent fairs and exhibitions have taken place at various locations in India during last year.

In the agriculture related MICE, there were a little above 24 trade fairs and shows conducted during 2006 in India and this has grown to over 75 events for the year 2012. This accounts to increase by more than 200% in the last 6-7 years. Some of the prominent events area Food Tech India, Aahar, Krishi Expo, International Animal Industry Expo, Agri & Flora Tech, International Flora Expo, Agri-Tech India, Grain Tech India, etc. Most events are held in Mumbai, Bangalore, Coimbatore and Delhi.

There are various institutional and industry related bodies like Confederation of Indian Industries (CII), Federation of Indian Chamber of Commerce and Industries (FICCI), NASSCOM, India Trade Promotion Organization (ITPO), etc. that conduct various fairs, conferences, training programmes throughout the year. The CII alone organizes many programs each year.

3.6.4 SUMMARY FINDINGS AND OBSERVATIONS

India is looking at promoting MICE sector through various developments (infrastructure and convention facilities)

. MICE events are held in many multi fold categories pertaining to various industries; . MoT is focusing on marketing India as a destination for MICE events. There is also recommendation of setting up an independent body to monitor MICE events in India. . MoT has extended its benefits under the Market Development Assistance (MDA) scheme to the active members of ICPB to promote MICE sector. . Delhi leads in terms of no. of events conducted -an advantage of being national capital . HICC is slowly emerging as important place for most International events in India due to the advanced technology, choice of vast single congregation area in combination with business centers, hotel and F&B . South India is gaining importance in MICE events since the operation of HITEX and HICC. When Hyderabad, Chennai and Bangalore are considered together they seem take the maximum share of business of MICE events in India; and . Most events are held in convention facilities existing in five star hotels in all cities due to lack of international scale of facilities and the right ambience for national / international conventions. . The Ministry of Tourism has decided to consider proposals for grant of financial assistance up to INR 50 million for construction of one convention centre at any well- connected and accessible tourist destination in each State/UT for promotion of MICE Tourism.

3.6.5 CONVENTION INDUSTRY IN KERALA

Kerala is fast emerging as a MICE destination. With a fine mélange of culture and natural settings, Kerala also offers state-of-the-art technology for business meetings, conferences and exhibitions to match global standards. The study conducted by Tata Consultancy Services on the tourism sector of Kerala explored the opportunities of developing MICE

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tourism in Kerala on a cultural plank. The study indicated that while Kerala is not a significant business destination, its calm and serene environs could make it an attractive meeting venue for corporates. This would also introduce business and professional decision makers to the State, which in turn can open gates for investments in other areas. Hotel and resorts focusing on foreign tourists can increase occupancy during the lean April - September season, by focussing on meetings and seminars market, through appropriate packages as may be necessary. Hotels/resorts with traditional architecture and ambience can position themselves to offer business tourism packages incorporating cultural performances, local cuisine, ayurvedic rejuvenation, etc. that could lend uniqueness and special image to the product.

Kerala is located in the south western corner of the country and thus is far removed from the main business centres. However, neighbouring states of , Tamil Nadu and are well ahead into industrialisation, and could provide the potential to tap business tourism. This opportunity includes business meetings, small conferences, in- house training, all combined with holidays in exotic locations in the State. Further, Kerala is also in the international crossroads between the Middle East/Europe and Far East/ Australia. Kerala has air links with the Middle East and Singapore. This advantage could be utilised to attract the international community for business tourism to the State. Though seemingly far-fetched at present, this could be developed gradually with a clear vision and concerted efforts. This would essentially require upgradation of relevant infrastructure - communication facilities in hotels & resorts, innovative packages for combining business with pleasure, brand building and marketing of Kerala as a business/conference destination.

Kochi, the business hub of the State has made certain foray into the MICE tourism with the operation of Le Meridian Hotel. Subsequently, during the year 2006, the State entered into global arena for MICE activities with the operation of Lulu International Convention Center in Thrissur, which caters to the growing needs of a convention facility of international standards. Lulu ICC and Garden Hotels is a venture of renowned business magnate and global entrepreneur Padmasree M. A. Yusuff Ali, who heads the EMKE Group and Lulu Chain of Hypermarkets

Lulu ICC is benefitted by good connectivity of Thrissur by road, rail and airport. Nearest airport is the Cochin International Airport, which is located at a distance of about 55 km from the city. Cochin International Airport handles both domestic and international flights and is the largest Airport in Kerala. Majority of the connections are domestic although a fairly significant number of flights connect destinations in the Gulf and Middle East catering to the Kerala Diaspora. A second airport run by the Navy also operates in the city. There are two main railway stations. Kochi ranks among India’s major seaports due to its being a safe harbour. It also operates passenger ships to Colombo and Lakshadweep.

At present, convention and conference options in the state are quite limited, and are catered to a limited extent by the premium hotels in Kochi and Lulu ICC in Thrissur. The Le Meridian Hotel in Kochi offers moderate conference facilities, with capacities of 270-1350 sq. m. (with 500-2000 delegates in theatre seating option) across 9 halls. It has also some smaller spaces, which can be availed for smaller meetings. Taj Malabar’s convention facilities include a conference hall with the capacity to cater to 300 plus delegates. An initiative for an international trade and convention centre is in place by Zoom Developers. This is being developed in a 40 acre land parcel and is a part of the Multi Product SEZ at Kalamassery, developed by KINFRA. The work is at present on hold. Piling is completed for the structure.

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3.6.6 LULU INTERNATIONAL CONVENTION CENTER

Location

Lulu International Convention Center was built in 2006 to cater to the growing needs of a convention facility of international standards in the city and the state. Lulu ICC and Garden Hotels is a venture of renowned business magnate and global entrepreneur Padmasree M. A. Yusuff Ali, who heads the EMKE Group and Lulu Chain of Hypermarkets

The Lulu ICC is located at Thrissur, approximately 4 km from the CBD area in about 15 acres of land. The centre is located off the State Highway (SH-39) connecting Thrissur and Guruvayoor at Puzhackal. The map below indicates the location of the Lulu ICC with respect to city CBD.

The table below presents distance of major land arks from the ICC along with approximate travel time by road.

Table 3.20: Distance from Major Landmarks from Lulu ICC Landmark Approximate Distance (km) Approximate Travel Time (Minutes) 5 10 KSRTC Bus Stand 5 10 Cochin International Airport 55 70 Kozhikode Airport 80 100 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The Lulu ICC is located at Puzhackal and is located 100 m off the SH-39 connecting Thrissur and Gurvuvayoor. This State Highway is one of the fast developing corridors of the city. The immediate neighborhood comprises of Sobha City, an integrated development project, automobile showrooms, and few industrial & commercial developments.

Meeting Facilities

The centrally air-conditioned Main Hall, Lulu Grand can comfortably seat 2,200 pax, and is one the best venue for conventions, conferences, product launches, mega shows, weddings, etc. in State. This hall is equipped with most modern audio-visual facilities.

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The air-conditioned Banquet Hall, Ruby can take up to 1,100 pax (theatre style) while the non-air-conditioned Banquet Hall, Lotus can accommodate 1,000 pax. For a typical Kerala style feast (sadya), the halls can seat up to 1,500 people in one go.

The Mini-conference Safina I, II, III is an air-conditioned and carpeted hall, which can be segregated into 3 different halls, each equipped with state-of-the-art audio-visual facilities. This hall can seat 20 to 450 pax and provides a very aesthetic ambience for meetings, seminars, conferences, corporate events, etc.

Accommodation and Restaurant

Apart from the conference halls, Lulu has a Lulu Garden Hotel which has 30 executive rooms and 5 suites, all air-conditioned and of double occupancy category. The hotel also has a well-equipped health club and kids play park for recreation. The present tariff structure is as follows:

Table 3.21: Average Daily Room Rate for Hotel Rooms at Lulu ICC Room Category Average Daily Room Rate (INR) Executive Rooms 4,000 plus Taxes Royal Suite Room 6,000 plus Taxes Presidential Suite 7,000 plus Taxes Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Clay Oven Restaurant offers a global menu and international cuisines.

Some of the photographs of the meeting and convention facilities at the Lulu ICC is given in the following page.

The Grand Hall The Lulu ICC

Clay Oven Restaurant View of the Stage Show

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Exhibitions at Lulu ICC Marriage Function at Lulu ICC

Details of Lulu ICC

The table below presents some of the details of the Lulu ICC

Table 3.22: Details of Lulu International Convention Centre Name Lulu International Convention Center Location Nandambakkam Developer EMKE Group Operator EMKE Group Site Extent 15 Acres Space Exhibition hall . Hall 1 (Grand Lulu Hall): 10,630 sq. ft. Design . Hall 2 (Ruby Hall): 7,100 sq. ft. . Hall 3 (Lotus Hall): 7100 sq. ft. . Hall 4 (Saffina): 1583 sq. ft. Convention 14,000 sq. ft. column free space (140 feet x 100 feet) Center Open Exhibition 15,390 sq. ft. column free space (171 feet x 90 feet) Area Proposed Use Exhibitions, Trade Fairs, Conventions, Private Weddings/ Parties Surrounding Land Use Commercial & Residential Project Completion Date Operational since 2006 Cost of Hiring the Space . Hall 1 (Grand Lulu Hall): Without F&B - INR 300,000 plus taxes and with F&B at INR 850 per pax plus applicable taxes 5% tax per head . Hall 2 (Ruby Hall): Without F&B - INR 150,000 plus taxes and with F&B at INR 850 per pax plus applicable taxes . Hall 3 (Lotus Hall): Without F&B - INR 125,000 plus taxes and with F&B at INR 850 per pax plus applicable taxes . Hall 4 (Saffina): Without F&B - INR 75,000 plus taxes and with F&B at INR 850 per pax plus applicable taxes Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

The table below presents some of the technical facilities of the Lulu ICC

Table 3.23: Technical Details of Lulu International Convention Centre Exhibition Hall/ Gallery . Hall 1 (Grand Lulu Hall): 10,630 sq. ft. (Column Free Space) . Hall 2 (Ruby Hall): 7,100 sq. ft.

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. Hall 3 (Lotus Hall): 7100 sq. ft. . Hall 4 (Saffina): 1583 sq. ft. Conference Spaces & Range from 1,583 sq. ft. to 14,000 sq. ft.; Capacity range from 50 persons to Banquet Hall 2,200 persons Accommodation Lulu Garden Hotel with 35 keys in premises. Tie ups with other hotels in the city. Car Parking 1,800 cars , no parking fee is charged Service pits Service trenches for power, water supply and drain line, telephone and compressed air. Drains Drains provided within the hall Public / Other Facilities . Information kiosk/booths . Protocol and service room . Fire safety, Ambulance & First aid services (on request) . Banking facilities (on request) Key Features The special and unique facilities available in the Convention Center are a) Foldable sliding partition; b) Helipad; c) The theatrical lighting system; d) Fire protections with sprinklers and smoke detectors; e) Modern Audio and video system; f) Meeting rooms; g) Banquet hall; h) Protocol and VIP lounge; i) Business center; j) Information Booth; k) Parking facilities; l) Wi-Fi connectivity; m) Service pits for connectivity; and n) Outdoor area Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Sources of Business

The major events that happen in the Lulu ICC are undoubtedly marriage events. This is followed by Medical. The banking and financial sector also conducts events regularly at the convention centre. Other sectors include tourism, government, entertainment, pharma sector, FMCG product launches, Bio-technology, etc. The chart below presents the sectoral contribution of events and the scale of events happening in Lulu ICC.

Source: Lulu International Convention Center; April 2013

Lulu has plans to construct a 100 keys 5-star category hotel. The major occupants in their hotel are those who come for conferencing. This is followed by Corporates and domestic

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travelers. Unlike Cochin, the peak season is during April which is the season of Thrissur Poorams. All the convention spaces in Lulu are column free.

Conference Facility

The fees and details of the conference facilities available in Lulu ICC are as follows.

Table 3.24: Details of Conference Halls at Lulu International Convention Centre Halls Column- Area / Capacity Monthly Charges Charges Free Space Size (No. of Frequency with F&B * without F&B (Yes/No) (sq. ft.) Persons) of Usage (INR excl. (INR excl. (Average) Taxes) Taxes) Hall 1 (Grand Lulu Yes 14,000 2,000 10 days 850 300,000 Hall) Hall 2 (Ruby Hall) Yes 10,630 1,500 15 days 850 150,000 Hall 3 (Lotus Hall) Yes 7,100 750-900 15 days 850 125,000 Hall 4 (Saffina) Yes 1,583 50 - 500 17 days 850 75,000 * Includes Breakfast (INR 150), Lunch, Tea/Coffee and Snacks Source: Lulu International Convention Center; April 2013

During off season, the duration of advance booking is 3 to 6 months while during season time the duration is 9 to 12 months. There is no seasonal variation in prices for conference facility. The banquet facility is provided in three of the halls.

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4 PROJECT SITE ANALYSIS AND DEVELOPMENT CONTROL & REGULATIONS

4.1 DETAILS OF THE PROJECT SITE

The table below summarizes details of the Project Site.

Table 4.1: Details of the Project Site DETAILS OF THE PROJECT SITE Area 11.3 acres (492,224 sq. ft.). First phase of the development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space. Access Thrissur Kuttippuram Main Road (SH-69) Frontage Approximately 36 m frontage along Thrissur Kuttippuram Main Road (SH-69) Shape Fairly regular in shape Topography The Project Site is proposed to be developed in phased manner. Land portion earmarked for first phase development admeasures about 7.15 acres and is flat in terrain, which is filled up to the road level. Land portion earmarked for second phase development admeasures about 3.05 acres and is slightly undulated as the site leveling is in process. Contiguity Project Site is contiguous in nature Landuse Categorized under Parambu land, with approval for commercial development comprising Organized Retail Mall, Commercial Office Space, Showrooms, Hotel and Convention Centre. INFRASTRUCTURE Power Power supply exists within the Project Site. Telecommunication Telecommunication facility available on the Project Site at present. Water Supply & Water Supply exists in the Project Site in the form of conventional well. There is no Sewerage trunk infrastructure available for water supply and sewerage.

4.2 LOCATION OF THE PROJECT SITE

The Project Site located along Thrissur Kuttippuram Road (SH-69), measures an area of approximately 11.3 acres (492,224 sq. ft.). The Project Site is located under the revenue administration of Ayyanthole Village, Thrissur Taluk, Thrissur District, Kerala, categorized under Parambu land, with approval for commercial development. First phase of the development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space.

The Project Site is located in the northwestern quadrant of the city, in the close proximity of about 1.5 km distance to Sobha City Project, which is under construction and to be completed in the year 2014. Further, the excellent connectivity from SH-69 and the social infrastructure facilities in the surroundings like Amala Medical College and Hospital, IES Engineering College along the region has induced residential development in the region. Moreover, Thrissur Kuttippuram Road is one of the growth corridors of the city.

Map showing the location of the Project Site with respect to other prominent locations in the city is presented in the following page:

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Map 4.1: Location of Project Site

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Table below provides distances of the important locations / landmarks from the Project Site:

Table 4.2: Distances of the Project Site from Major Landmarks in the City Location / Landmark Distance from Location / Landmark Distance from Project Site (km) Project Site (km) Swaraj Round 3.5 Sobha City 1.5 West Fort 2.5 Punkunnam Junction 1 Paturaickal Junction 2 Amala Medical College 3.5 Thrissur Collectorate/ Civil 3.5 KSRTC Bus Stand 3.5 Station Thrissur Railway Station 3 Cochin International Airport 55 Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

4.3 DESCRIPTION OF THE PROJECT SITE

The Project Site admeasures an area of approximately 11.3 acres with approval for commercial development. First phase of the development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space. The Project Site is irregular in shape and has a frontage of approximately 36 m on SH-69. There is availability of power and water at the Project Site as it had an industrial unit functioning earlier. The water availability is in the form of wells (otherwise called as Water Recharge Well), which are 3 in nos.

View of the subject property Photographs in the following page present some of the features of the Project Site and its surroundings.

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Views of the Project Site

Views of the Project Site

Views of Canal adjoining the Project Site along Eastern Side

Views of Existing Well at the Project Site

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View of Approach Road (Toward Puzhakkal) View of Approach Road (Toward Thrissur City)

View of Adjoining Property on Eastern Side (MD Gem Lights Showroom on the South of Project Francis & Sons Furniture Showroom) Site

Frontage Along SH-69

Google representation showing the location of the Project Site and its surroundings is given in the following page.

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Map 4.2: Map on Location of the Project Site and its Surroundings

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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4.4 INFRASTRUCTURE DEVELOPMENT INITIATIVES NEAR THE PROJECT SITE

Augmentation of Thrissur Kuttippuram Main Road (SH-69): NHAI in association with PWD and TMC, initiated the widening of Thrissur Kuttipuram Main Road (SH-69), which extends to about 52.65 km stretch, covering areas like Thrissur, , Kunnamkulam, , Naduvattom, Edappal, Thavanoor and Thrikkanapuram (joins SH-17). This will enhance regional connectivity especially with respect to Malabar Connectivity to Coimbatore through Palakkad and will have significant impact on Thrissur City.

Proposed Bus Stand Near Punkunnam: At present, the city has four bus stations namely, a) Shaktan Thampuran (Private Bus Stand); b) Municipal Bus Stand; c) KSRTC Bus Stand (Veliyannur); and d) Vadakke Stand (Northern Bus Stand). In order to reduce the traffic congestion within the city CBD and also the movement of heavy vehicles, the KSRTC has proposed to shift the Vadakke Stand to Punkunnam along Thrissur Kuttipuram Main Road (SH-69). This proposed development is still in planning stage. However, operation of the same will have significant positive impact on the proposed development as it is located in the close proximity (less than 500 m) and also connects the other neighboring urban centers.

4.5 SWOT ANALYSIS FOR THE PROJECT SITE

SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis has been done for the Project Site based on location, infrastructure, linkages, frontage and potential usage and is presented below:

Table 4.3: SWOT Analysis for the Project Site Strengths Weaknesses  Project Site is part of SBD of the city and is located along one of  Project Site has less visibility the fast growing corridors of the city. from SH-69 due to narrow  Project Site enjoys good connectivity from SH-69 and is frontage of 36 m. proposed to be widened to four-lane.  Project Site is irregular in  Surrounding developments in the catchment attracts significant shape floating population of SEC A & B with high disposable income. Opportunities Threats  Project Site catchment has good social and physical  Sobha City Mall, which is infrastructure located within 1 km, will be a  Proposed surrounding developments such as KINFRA Park, major competition for the Puzhakkal River Tourism Project, would improve the profile of proposed development. the area.  Proposed KSRTC Bus Terminal is located at a distance of about 1 km from the proposed development.

4.6 APPLICABLE DEVELOPMENT CONTROLS AND REGULATIONS

The Project Site forms part of the administrative jurisdiction of Thrissur Municipal Corporation. The applicable byelaws and Development control Regulations (DCR) are outlined in the Kerala Municipality Building Rules, 1999.

Based on the area statement shared by the Client for the first phase, the Project Site, proposed development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space. The table in the following page summarizes the break-up of area statement.

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Table 4.4: Break-Up of Area Statement for First Phase Development on the Project Site All Area in sq. m. Sl. Level / Floor Floor Plate Service Passage Built-Up Common Component-Wise Break-Up Floor Plate No. excl. Area Area Area Area incl. Shops Multiplex F&B Showrooms Office Parking within FAR Parking A. Retail Mall 1. Basement 2 520.51 178.62 - 341.89 520.51 - - - - - 7,407.45 2. Basement 1 442.35 149.86 - 292.49 442.35 - - - - - 7,358.04 3. Ground Floor 1,687.71 277.04 113.34 1,297.33 1,295.26 392.45 - - - - 6,481.46 4. First Floor 6,037.18 8.63 132.70 5,895.85 2,501.38 3,535.80 - - - - 6,037.18 5. Second Floor 5,597.23 8.63 132.70 5,455.90 1,740.37 3,856.86 - - - - 5,597.23 6. Third Floor 5,424.76 8.63 129.83 5,286.30 1,654.39 3,770.37 - - - - 5,424.76 7. Fourth Floor 5,460.82 122.67 129.83 5,208.32 1,691.43 2,368.36 706.96 694.07 - - 5,460.82 8. Fifth Floor 5,494.00 314.30 283.95 4,895.75 634.89 784.00 953.22 3,121.89 - - 5,494.00 9. Terrace Floor 1,556.96 833.74 26.40 696.82 1,306.48 194.16 56.32 - - - 1,556.96 Sub Total (A) 32,221.52 1,902.12 948.75 29,370.65 11,787.06 14,902.00 1,716.50 3,815.96 - - 50,817.90 B. Showroom Space and Office 1. Basement 2 374.06 215.55 - 158.51 374.06 - - 5,763.39 2. Basement 1 322.49 215.55 - 106.94 322.49 - - 5,736.96 3. Ground Floor 344.39 145.18 - 199.21 344.39 - - 4,751.84 4. First Floor 2,290.85 80.86 31.18 2,178.81 382.45 1,908.40 2,290.85 5. Second Floor 2,787.51 80.86 - 2,706.65 320.11 2,467.40 2,787.51 6. Third Floor 2,787.51 80.86 - 2,706.65 320.11 2,467.40 2,787.51 7. Fourth Floor 2,787.51 80.86 - 2,706.65 320.11 2,467.40 2,787.51

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Sl. Level / Floor Floor Plate Service Passage Built-Up Common Component-Wise Break-Up Floor Plate No. excl. Area Area Area Area incl. Shops Multiplex F&B Showrooms Office Parking within FAR Parking 8. Fifth Floor 2,787.51 80.86 - 2,706.65 320.11 2,467.40 2,787.51 9. Sixth Floor 1,762.89 - 103.52 1,659.37 423.51 1,339.38 1,762.89 10. Seventh Floor 1,757.23 - 103.52 1,653.71 405.53 1,351.70 1,757.23 11. Eighth Floor 1,757.23 - 103.52 1,653.71 405.53 1,351.70 1,757.23 12. Ninth Floor 1,757.23 - 103.52 1,653.71 405.53 1,351.70 1,757.23 13. Tenth Floor 1,156.47 439.74 103.52 613.21 917.30 239.17 1,156.47 14. Terrace Floor 127.20 - - 127.20 127.20 - 127.20 Sub Total (B) 22,800.08 1,420.32 548.78 20,830.98 5,388.43 - - - 11,778.00 5,633.65 38,011.33 Grand Total 55,021.60 3,322.44 1,497.53 50,201.63 17,175.49 14,902.00 1,716.50 3,815.96 11,778.00 5,633.65 88,829.23 Source: As given by the Client

Based on the above area statement, FAR area is about 50,201.63 sq. m., which translates into 540,366 sq. ft., which translates into utilized FAR of 2.78 on land extent of 4.46 acres (i.e. 194,276 sq. ft.)

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5 EVALUATION OF DEVELOPMENT MIX OF THE PROJECT

5.1 PROPOSED DEVELOPMENT MIX ON THE PROJECT SITE

As stated earlier, the Client intends to develop a mixed-use development mix on the Project Site, comprising of a shopping mall, office and showroom spaces, hotel as well as residential apartments with the construction taking place in phases (in 3 phases). Tentative phasing of the development is given below:

. Phase I: Proposed to have a Retail Mall of 316,143 sq. ft. of built-up area within FAR and Commercial Block containing 224,223 sq. ft. of built-up area within FAR for both showroom space & commercial / office space on warm shell basis. The entire Phase I is expected to be spread over 4.46 acres land extent;

. Phase II: Proposed to have a Hotel Block and Convention Center Block. The Phase II development is expected to be spread over 6.84 acres land extent; and

. Phase III: This phase of development is expected to be only residential apartment. Land extent is yet to be finalized for the same.

Based on the area statement shared by the Client for the first phase, the Project Site, proposed development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space. The table below summarizes the break-up of area statement.

Table 5.1: Break-Up of Area Statement for First Phase Development on the Project Site Sl. Uses Built-Up Area within FAR Description No. (sq. m.) (sq. ft.) 1. Retail Mall with 29,370.65 316,143 Planned from First Floor to Sixth Floor as a Multiplex Standalone Building with a small portion on the Ground Floor and Terrace Floors also. 2. Showroom 13,385.73 144,083 Planned from First Floor to Fifth Floor 3. Office 7,445.25 80,140 Planned from Sixth Floor to Tenth Floor above the Showroom Space Total 50,201.63 540,366 Source: As given by the Client

Based on the above area statement, FAR area is about 50,201.63 sq. m., which translates into 540,366 sq. ft., which translates into utilized FAR of 2.78 on land extent of 4.46 acres (i.e. 194,276 sq. ft.). Total built-up area including service areas, common areas, parking, etc. works out to 956,150 sq. ft.

While components proposed under Phase I is dealt in detail in the subsequent chapters for their market feasibility and financial feasibility, the table below provides market feasibility and profitability of all the components proposed under all three phases based on the macro-market assessment, considering various uses/activities proposed as part of the overall integrated development in medium- & long-term (in all 3 phases), inter-dependency, value add in positioning and key critical success factors for development of such use/activity.

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5.2 MARKET FEASIBILITY MATRIX FOR OVERALL DEVELOPMENT

Following are the components proposed as part of the integrated mixed-use development on the Project Site under three different phases:

. Organized retail sub-sector (mall format incl. showroom space); . Commercial / office sub-sector; . Hospitality sub-sector; . MICE sub-sector; and . Residential Apartments.

Detailed macro-market assessment of the above sub-sectors is presented in the Chapter 3 of this report. The analysis covered market trends, demand-supply scenario, pricing and other related aspects. All the above sub-sectors were analyzed in detail for their market feasibility & profitability considering the various uses/activities proposed as part of the overall integrated development in medium- & long-term (in all 3 phases), inter-dependency, value add in positioning and key critical success factors for development of such use/activity. The table in the following page summarizes outcome of the sector assessment and recommendations on sectors and activities proposed to be considered as part of the overall integrated mixed-use development on the Project Site under three different phases.

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Table 5.2: Summary Sector Assessment and Recommended Development Mix for Project Site under Different Phases Sl. Project Summary Sector Assessment and Outcome Market Profitabilit Recommendation for No Components / Feasibility y Final Development Mix . Sectors 1. Organized . Positioning - Size to act as a city-level mall with gross built-up area of about Retail (Mall 470,000 sq. ft. Format incl. . Competition - Lesser penetration of mall format in the city and enjoys competitive Showrooms) advantage . Inter-dependency - Integrated mixed-use development on the Project Site offers YES inter-dependency for retail mall more specifically from Phase II and Phase III components . Demand drivers - Demand from the city in general and micro-market in particular. Captive demand potential from Phase II and Phase III components . Positioning driven - complement hotel, MICE and residential development 2. Commercial / . Critical success factor - Securing an anchor tenant occupying 20-25% of total Corporate / office inventory YES Office Space . Formats - Higher demand for small format office space (2,000-5,000 sq. ft.) Recommended for . Demand driver - BFSI occupiers. Larger reliance on relocation / expansion development after demand from existing occupiers in the city securing anchor . Demand catalysts - hotel and MICE components proposed under Phase II OR consider as . Positioning driven - complement hotel and MICE. Residential development under part of Phase II Phase III can be marketed under ‘walk to work’ concept 3. Hospitality . Demand drivers - Demand from the city in general due to business and tourism potential . Inter-dependency - Integrated mixed-use development on the Project Site offers inter-dependency for hotel component more specifically from retail mall, office and Convention Center YES . Demand catalysts - office and MICE components proposed under Phase I & II . Captive demand - Fully occupied office space and operational Convention Center offers sizeable captive demand . Positioning - Operator formats/brands complement other uses

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Sl. Project Summary Sector Assessment and Outcome Market Profitabilit Recommendation for No Components / Feasibility y Final Development Mix . Sectors 4. MICE - . Positioning - Play role of an anchor - high multiplier factor for the integrated Convention development YES Center . Capital intensive - profitable as a package of activities, which can capitalize Recommended for multiplier factor further evaluation . Inter-dependency - Integrated mixed-use development on the Project Site offers on profitability inter-dependency for Convention Center more specifically from retail mall, office before and hotel commencing . Competition - Lulu Convention Center will be a direct competition to the proposed Phase II development development 5. Residential . Positioning - This component makes the proposed development as fully integrated Apartment development with ‘walk to work’ concept . Competition - will have edge over other standalone developments due to integrated nature of the overall development . Inter-dependency - Retail mall and Convention Center (for social events) will be YES significantly benefitted from the residential development . Demand drivers - Demand from the city in general and micro-market in particular. Competitive edge due to integrated nature of overall development . Positioning driven - complement retail, office and Convention Center

INDEX FAVORABLE MODERATE NON-FAVORABLE NEEDS FURTHER EVALUATION

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Based on the above matrix, key observations on the development mix are summarized below:

. Proposed components like organized retail (mall format incl. showrooms), hospitality and residential apartment demonstrates favorable market feasibility & profitability;

. Convention Center offers moderate market feasibility due to the direct competition from Lulu Convention center while the profitability need to be evaluated on a later date due to high capital expenditure and potential negative impact on revenue due to competition; and

. Commercial / office space leasing will be a challenge as market is yet to develop to absorb high volumes. Rental market also needs improvement. Critical success factor for commercial / office space to succeed is securing an anchor tenant. Failing to secure an anchor, it is recommended to evaluate the feasibility for development under Phase II.

Detailed assessment for components proposed under Phase I development comprising Retail Mall incl. Showroom Space and Commercial / Office Space is presented in the subsequent chapters.

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6 CATCHMENT DELINEATION AND MICRO- MARKET ASSESSMENT

6.1 BACKGROUND

The Project Site and developments in its neighborhood (micro-market) have been assessed to understand its demography, socio-economic profile, affordability, housing characteristics, social infrastructure, available amenities, existing commercial & residential developments, leisure & entertainment facilities, city level infrastructure initiatives, which will have their impact on the development at the Project Site. Further, the existing real estate scenario has been captured to analyze the prevailing needs and demands for such developments in the near future. Also, this analysis would help in determining the potential opportunities which are available in the neighborhood for proposed development and the like.

The inputs for the assessment are derived from both market assessment and primary demand assessment surveys carried out within the primary & secondary catchments of the Project Site. The real estate market assessment covered both macro- and micro-market assessment across all core real estate (residential, commercial/office and hospitality) sub- sectors in general and the retail sub-sector in particular.

In the case of primary demand assessment, a perception analysis has been conducted covering households and shoppers for shopping behavior & perceptions and retailers for their perceptions & preferences. In addition, about 20 perceptions were captured from office occupiers from Kochi and Bangalore to ascertain their interest to expand in Thrissur.

The table below presents the framework adopted for the primary demand assessment surveys.

Table 6.1: Framework on Methodology Adopted for Primary Demand Assessment Surveys Sl. Type of Survey Survey Details No. of Samples 1. Household . Surveys covered SEC A & B category population Household Surveys (In-home . Distributed samples across micro-markets in the city, Surveys - 215 Surveys) and with larger number of samples in the immediate Samples Shoppers Surveys catchment, especially in Northwest Quadrant (where Shoppers Surveys the Project Site is located), Western, South and - 100 Samples Southwest quadrant. . Shoppers surveys were conducted at Big Bazaar, Reliance Trend, Municipal Market Complex/Building, More, Kokkalai (Old area of Thrissur-Close to Thrissur Railway Station), Swaraj Round (Circle) and in location like MG Road, Achutha Menon Road, Palace Ground, Town Hall Road, Station Road, Ashwani Junction and Mission Quarters Road 2. Retailer’s Survey . Covered major retailers (National & Local) across all 50 Samples retail categories in Thrissur and perception from retailers from operational malls in Kochi. . Distributed samples across various bands, like Kalyan Silk, EMKE silk, Domino's Pizza, Reliance Market, United Colour of Benetton (City Arcade), PUMA, Sony, Chungath Jewellery, Woodland, Big Bazaar, Chakolas, Baskin Robbins, Alice Gold, Joyalukkas, avatar, Titan, BRIGHT Furniture Mart,

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Sl. Type of Survey Survey Details No. of Samples and Jayalakshmi etc. 3. Occupier’s Survey . Occupiers’ surveys were conducted in Kochi and 20 Samples Bangalore (10 samples each . Surveys covered several IT-ITES, and BFSI at Kochi and occupiers Bangalore)

6.2 CATCHMENT DELINEATION AND ANALYSIS

6.2.1 CATCHMENT DELINEATION

The catchment of the Project Site has been delineated after conducting a reconnaissance survey at different areas in the neighborhood and the city to assess the extent of movement of people for retail and related activities. Based on this the shoppers surveys were carried out at various retail destinations as detailed above to delineate the catchment zones for the Project site. It is observed that the Project Site will have primary and secondary catchment zones based on the travel distance and the percentage of shoppers in each zone.

As per the survey findings, each retail destination attracts an average of about 79% of the shoppers from its primary catchment, which extends up to a distance of 6 km followed by 14% from secondary (6-12 km) catchment. There is a small percentage of about 7% of the shoppers also coming from the nearby urban centers around Thrissur, which is considered as the tertiary catchment for the proposed retail development on the Project Site.

The primary and secondary catchment areas cover a total radius of about 12 km which comprises of the areas located within the Thrissur Corporation limits. The areas beyond the Corporation limits forms part of the urban agglomeration (as per the Census 2011), which include locations like Vadakkencherry, Wadakanchery, Guruvayoor, Kunnamkulam, Chavakkad, , Chalakuddy and Kodungalloor.

Map showing the delineated primary and secondary catchment is presented in the following page.

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Map 6.1: Map Showing the Primary and Secondary Catchment of the Project Site

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Map showing the urban centers surrounding the city, which forms part of the tertiary catchment, is presented below.

Map 6.2: Map Showing the Urban Centers of Tertiary Catchment of the Project Site

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Following are the areas under primary secondary and tertiary catchment of the Project Site.

Table 6.2: Catchment Details of Project Site Primary* Punkunnam, Puzhakkal, Amalanagar, Adatt, Patturaikkal, Viyyor, Kolazhy, Chembukkav, Catchment Keeramkulangara, Palikulam, , Kuraichira, , , Eithuruth, Olarikkara, Ayyanthole and Kanattukar etc. Secondary Avanoor, Chitilappilly, Peramangalam, Pottore, Udayanagar, Ramavaramapuram, Catchment Kuttanalur, Chiyyaram, Ollur and , etc. Tertiary Vadakkencherry, Wadakanchery, Guruvayoor, Kunnamkulam, Chavakkad, Kaipamangalam, Catchment Chalakuddy and Kodungalloor Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

6.2.2 CATCHMENT ASSESSMENT AND ANALYSIS

Key Characteristics

The table below summarizes the key characteristics and features of the population residing in the catchments.

Table 6.3: Key Socio-Economic Features of the Primary and Secondary Catchment of the Project Site Location Neighborhood Characteristics Potential for Project Development Thrissur High social index. Upper income and middle High potential for any real estate Corporation income group population with higher level of development. disposable income and lifestyle aspirations.

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Location Neighborhood Characteristics Potential for Project Development Adat Medium social index. A major cluster of diamond Moderate potential for any real cutting employees estate development. Kolazhy Residential and agricultural area comprising of Low to moderate potential for the middle to low income group with low purchasing Project development power. Avanoor Residential and agricultural area comprising of Low to moderate potential for the middle to low income group with low purchasing Project development power. Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Demographic Characteristics

The primary and secondary catchment areas are within the jurisdiction of Thrissur Corporation and thus the population figures have been collated based on the Census figures 2011. The areas considered under the tertiary catchment are located under the Thrissur UA as per the Census 2011. The population growth rates have been estimated based on growth derived based on Census 2001 and 2011 figures. The tables below present the demographic characteristics of the population residing in the catchment area of the Project Site.

Table 6.4: Key Demographic Features of the Catchment Area of the Project Site Catchment Total Population (As Total Population Total Population per Census 2011) (Projected 2013*) (Projected 2016*) Primary Catchment 2,49,321 2,49,321 2,49,321 Secondary Catchment 66,275 66,275 66,275 Tertiary Catchment 1,24,194 1,53,468 2,08,721 Total 4,39,790 4,69,064 5,24,317 Note: Primary catchment covers areas located within Thrissur Corporation (79%), Secondary catchment covers about 21% of Thrissur Corporation and Tertiary catchment covers of 7% of the District Urban Population. * Projected population based on 2011 Census Figures. Thrissur Corporation indicates negative growth and therefore no increase in population figures have been considered for the Primary and Secondary catchments. Source: Census of India 2011

Based on the above, target population (SEC A & B category) and households within the catchment area of the Project Site is estimated for the current year ( year 2013) and year 2016. The same is presented in the table in the following page.

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Table 6.5: Existing and Projected SEC A & B Population and Households within the Catchment Area of the Project Site Catchment Population Total No. of Total No. of SEC Total Target Households (Census 20111/) Households2/ A&B Households3/ 2011 2013 2016 Primary Catchment Thrissur Corporation (79%) 2,49,321 57,982 16,037 16,037 16,037 16,037 Additional Supply from the On-going/New Projects ------1,348 Sub Total 2,49,321 57,982 16,037 16,037 16,037 17,385 Secondary Catchment Thrissur Corporation (21%) 66,275 15,413 4,263 4,263 4,263 4,263 Additional Supply from the On-going/New Projects ------483 Sub Total 66,275 15,413 4,263 4,263 4,263 4,746 Tertiary Catchment Thrissur District Urban Population (7%) 1,24,194 27599 7633 7633 9,432 12,828 Sub Total 1,24,194 27599 7633 7633 9,432 12,828 Grand Total 27,933 29,732 34,959 1/ Population figures based on 2011 Census data 2/ Households calculated based on the average household size indicated in the primary surveys in the catchments. 3/ Proportion of population under SEC A & B Category is 27.7% and is based on City Skyline Data 2012 published by Indicus Analytics

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Catchment Profiling

A primary survey of shoppers and residential population in the catchment was undertaken to understand the perceptions and preferences of consumers of the primary & secondary catchments and other areas of the city. Opinion and feedback received through this survey is utilized for ascertaining the demand for the retail development on the Project Site.

Household Size: The average household size of the primary & secondary catchment is 4.3. About 60% of the population in the primary & secondary catchment has a family size of 3 to 6 members. About one-third of the households had 1 to 3 members and remaining households had 6 to 8 members in the household. This indicates the increasing nuclear families of the households in Thrissur, which in-turn result in the increase in requirement of commodities and thus increase in spending.

Thrissur is also known for having a large percentage of the population working abroad mainly in the Middle East. Similar characteristics were also indicated in the household surveys wherein the primary & secondary catchment had approximately one-fifth of families with members residing abroad. This indicates a higher buying power for the households in the catchments due to remittances from the NRI segment. Majority of these households in the catchment have 1 -2 members working abroad followed by about 6-7% households with 3-4 members residing/working abroad.

Earning Members: Majority, over half (55%) of the households within the primary catchment have single earning member while the remaining had more than one earning members in the household. However, in the case of the secondary catchment, almost two- third of the respondents had single earning member, while the remaining had two or more earning members in the household.

Occupation Profile: About two-third (70%) of the households in the catchment are employed in the private sector. There is small percentage of the households under the self-employed category and public sector employment.

Majority of the respondents in primary & secondary catchment have reported a monthly household income of INR 30,001 - 60,000. While 14-15% have reported monthly income of INR 60,001 - 90,000. It was also observed that primary catchment alone had about 10% of the respondents with income above INR 150,000 per month. The average monthly household income works out to be INR 58,606 and INR 46,580 per month for the primary and secondary catchment respectively.

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However the above analysis does not include the remittances by NRI members of the household.

Workplace Location: Majority (17%) of the respondents in the primary catchment work in and around Swaraj Circle (Thrissur Round) followed Ayyanthole and Punkunnam (10% each). The workplace locations for the remaining 29% of the respondents are almost equally distributed among Puzhakkal (8%), Punkunnam (7%), Kuraichira (7%), Olarikkara (7%), etc. The secondary catchment also has major percentage (20%) of respondents working in and around Swaraj Circle followed by Ayyanthole (17%), Patturaickal (14%), Poonkunnam (12%) and Ollur (11%).

Housing Typology and Ownership: Over 95% of the respondents were residing in individual homes in the primary & secondary catchment while the remaining was in the apartments. Majority of the respondents (92-93%) have reported living in own houses and a small percentage of the population resides in rented homes with average monthly rental of about INR 7,200. Most of the apartments and villas developments are either second homes or for rental accommodation whose owners are mainly investors or expatriates.

6.3 REAL ESTATE MICRO-MARKET SUB-SECTOR TRENDS

6.3.1 MICRO-MARKET OVERVIEW

The areas / locations within the primary catchment of the Project Site (the micro-market) have been assessed in detail. An inventory of developments in the area was carried out to identify the supply scenario prevailing in the catchment of the Project Site. Below are some of the general trends prevailing within the micro-market from the real estate perspective.

. The micro-market has mix of residential, hospitality, small scale retail & commercial developments; . Retail formats in the micro-market is mainly the automobile showrooms, food outlets, etc. . The residential developments are primarily by the local developers along Punkunnam stretch. These are mainly Grade B & C developments. . Lulu International Convention Center and Puzhackal River Tourism Center add to the hospitality profile of the micro-market. . Proposed KSRTC Bus Terminal is located in this stretch. Few Commercial developments are proposed in the stretch.

The table below provides an overview of the prevailing micro-market situation in the primary catchment of the Project Site, covering core real estate sectors.

Table 6.6: Overview of the Micro-Market Situation for the Project Site Sub-Sector Description Prevailing Prices Residential Several upcoming standalone apartment projects Apartments - Capital Value: INR exist in the areas like Ayyanthole, Punkunnam, 2,300 - 4,500 per sq. ft. of saleable Chakkamukku and Amala College area Commercial Several standalone buildings, wherein the ground and Standalone Development - Rental first floor are utilized for retail and the upper floors for Value: INR 25-60 per sq. ft. per commercial / office use month Retail Standalone formats for retail development. Micro- Standalone Development - Rental market has large presence of automobile showrooms, Value: INR 45-100 per sq. ft. per small F&B outlets, and furniture & light showrooms. month Sobha City Mall, which is under construction, is Sobha City Mall - Capital Value: located within this catchment INR 4,500-9,800 per sq. ft. of saleable area

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Sub-Sector Description Prevailing Prices Hospitality There are several starred hotels in the city located ADR: INR 2,562 for the Micro- within CBD and SBD locations. Lulu International Market Convention Center is located in close proximity to the ADR of Lulu ICC: INR 4,000 - Project Site. 7,000 per day Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

6.3.2 RETAIL SUB-SECTOR

Retail sub-sector in the city is dominated by high street developments located around the Swaraj Round Circle, MG Road, Palace Road, etc. in the CBD. There are few standalone shopping complexes located in these high street areas with areas ranging from 40-000 sq. ft. to 50,000 sq. ft. Even in these complexes, retail is limited to only the ground and first floors. Local brands occupy about 60-65% of the total retail space in the city. Few examples of existing organized retail developments are the apparel & jewellery showrooms (which are generally owned) and a Big Bazaar store.

There are two operational shopping complexes in the city, viz. the City Centre and Centre Point located in the city CBD. The paragraphs below present a brief description of these shopping complexes:

. City Centre is located in the Swaraj Round, the CBD of the city. The shopping complex has a total area of approximately 45,000 sq. ft. with a floor plate of 9,000 sq. ft. The ground floor comprises of inline stores and the major categories are apparel, F&B, supermarket, jewellery store and gifts store. The first and second floor also has almost the same tenant mix. The area of individual shops in these three floors varies from 450 sq. ft. to 2,000 sq. ft. The supermarket occupies the largest area of approximately 2,000 sq. ft. Fourth and fifth floor is occupied by educational institutes and offices. The brands present in City Centre include Cottons, Peter England, City Supermarket, Zapp, Kobbler, Scullers, Lee, Wrangler, etc. Existing lease rentals vary from INR 60-150 per sq. ft. per month. Most of the shops are sold out to investors, who have in turn leased out the premises to the retailers. The sale price ranges from INR 9,000- 15,000 per sq. ft. for the ground floor.

. Centre Point is located at MG Road. The approximate area of this complex is 40,000 sq. ft. and has a floor plate of approximately 8,000 sq. ft. The retail formats are located on the Ground Floor. The formats present include a local super market, food outlet, computer hardware store, travel agency, etc. No major brands are present here. The upper floors are occupied by institutes such as Frank Finn and offices. The lease rentals vary from INR 50-100 per sq. ft. per month. Though the shopping complex has a good frontage, failed to perform well due to poor product mix, and lack of parking facilities.

The immediate micro-market has large presence of automobile showrooms, a few small scale F&B outlets, and furniture & light showrooms. The micro-market also houses few super markets developed by local players. Under construction Sobha City Mall is also located along this stretch (SH-69), at a distance of about 1 km from the Project Site. Details of the Sobha City Mall is given in Section 3.4 above.

Map showing the Key retail development in the primary & secondary catchment is presented in the following page.

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Map 6.3: Map Showing the Key Retail Developments in the Primary and Secondary Catchment of the Project Site

Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

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Retailers Preferences

As part of the primary surveys, retailers’ survey was carried out to assess the preferences of the retailers and retail shopping characteristic of the city. Two retailers from each key category were surveyed to understand the preferences from all the categories. Key outcome and observations are presented below.

Area Preference: There is high preference for increased area requirements from categories like Home Furnishings, Jewellery and Supermarket. This could be due to the non- availability of larger format retail stores in the city. Accessory stores, electronics stores and gifts stores are more or less satisfied with the existing area. Home furnishing stores are presently functioning in approximately 2,750 sq. ft. area and they prefer expansion to 3,833 sq. ft. Similarly Jewellery stores that are functional in an average area of 5,036 sq. ft. prefer to expand to larger areas of 6,250 sq. ft.

Source: Primary Preference Surveys of Retailers; Jones Lang LaSalle; April 2013

The average area for various retail outlets within the primary & secondary catchment is 3,984 sq. ft. and the area preferred by retailers is about 4,375 sq. ft., which is higher by about 10% over the existing sizes.

Prevailing and Preferred Rental: Majority of the retailers are paying rentals ranging between INR 25-50 per sq. ft. per month. The rentals are on the lower side as many have paid substantial amount of deposits and most of them are occupied for long time. In terms of willingness-to-pay, most of the retailers surveyed have indicated their preference to pay the rental in a lesser range except accessory stores & jewellery stores, who are willing to pay higher rentals if provided with better facilities. The average existing rentals in the primary & secondary catchment is INR 72 per sq. ft. per month and the preferred rental per month is INR 68 per sq. ft. per month.

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Footfalls and Conversions: Highest footfalls in Brand Weekdays Footfall the primary & secondary catchment are (Nos.) observed for super markets followed by food Reliance Mobile 300 chains. The average footfalls in these City Super Market 4000 categories are in the range of 150 to 200 during weekdays & weekends respectively. Electronics Jayalakshmi 700 stores, home furnishings and gift shops have Reliance Trends 300 the lowest footfalls during weekdays and Big Bazaar 5000 weekends. On an average, there is an increase Fashion Fabrics 1000 of about 16% in the weekend footfalls over the Reliance Super 1000 weekday footfalls.

In terms of conversion, the primary & secondary Brand Weekends Footfall catchment witnessed about 65% higher (nos.) conversion during the weekend over the week City Super Market 5000-6000 days. Jewellery, apparel formats, Super Jayalakshmi 1000 markets, Cinema Theaters and food chains find Reliance Trends 300 higher conversions during the weekends. However, there is no noticeable change in the Big Bazaar 6000 conversion during weekends for electronics, Fashion Fabrics 1000 gifts & toys and accessories. Reliance Super 1000

Theatre Name Weekdays Footfall (Nos.) Weekends Footfall (Nos.) Total Seating Capacity Jos Theatre 400 900 1100 Swapna Theatre 450 600 1142 Ragam Theatre 600 960 1200 Source: Primary Preference Surveys of Retailers; Jones Lang LaSalle; April 2013

Ticket Size: The ticket size is highest among jewellery stores and home furnishing stores. This is followed by the electronic goods and supermarkets, apparels and footwear segment. F&B, accessory stores, etc. have comparatively lower ticket sizes, which are below INR 400. The average ticket size for all categories considered together is INR 775.

Age Group of Shoppers: The active shoppers in the city are basically those between 25 to 50 years of age and these are primarily the working class population. The younger people in the age group from 15 to 25 are active shoppers of gifts & food, which constitutes about 62%. Home furnishing stores and majority of the supermarkets have shoppers in the age group of 30 to 50. The average age of shopper in the primary & secondary catchment is 32 years.

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Preference and Priorities of Retailers: Approximately 12% of the retailers surveyed indicated that they do not have enough retail space as per their requirement. The major categories with this view were apparels stores, home furnishing stores, food chains, electronics stores and supermarket formats. About three-fourth of the retailers surveyed are looking for expansion or shifting to a new premises with better facilities in the city. All categories excluding jewellery and footwear are looking out for expansion as per the retailers survey.

Preferred Location for Retail Expansion: Most of the retailers have indicated preference for CBD for expansion, particularly in the case of F&B, accessories, gifts & toys and electronics. F&B prefer to operate at East Fort, followed by West Fort and MG Road areas. Apparels prefer expansion at Mission Quarters, Kuttanalur (near NH Bypass), MG Road, Punkunnam and Ayyanthole which are all upcoming residential locations. Electronic stores also prefer expansion towards Punkunnam while Mannuthy is an attractive location for home furnishing stores. No major real estate development is happening in the Project Site surroundings.

Source: Primary Preference Surveys of Retailers; Jones Lang LaSalle; April 2013

Location Preference of Retailers: Close to half (46%) of the retailers surveyed indicated their willingness to relocate to a mall, while the rest (52%) of the retailers interested in shifting to stand alone unit. The categories looking forward to locate within shopping mall format are Apparel, Food Chain, Gift and Toys and Electronics Stores. The apparel formats preferred locating in areas which are visible from mall or close to the food court of multiplex.

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Gifts & toy shop preferred to locate near areas which are visible from road while electronics format preferred to locate near the multiplex.

Selection Criteria for Retail Expansion: The survey on selection criteria for retail purpose indicated that location has the highest priority followed by footfalls, parking and accessibility. Hence, any development which is at a preferred location with adequate parking facilities and good ambience would be a development preferred by the retailers.

Source: Primary Preference Surveys of Retailers; Jones Lang LaSalle; April 2013

Ranking of Retail Destinations: Palace Road and Shakthan Thambura are the most preferred retail destination for new outlets, followed by Swaraj Round and MG Road. The Project Site ranks seventh among the various destinations preferred. However, owing to the lack of availability of retail space in MG Road, CBD, etc., there will be lesser space for expansion and hence the suburbs of the city will be preferred in which case, the Project Site has better ranking than other suburban locations such as Ayyanthole, Kuttanalur, Patturaikkal, etc.

Source: Primary Preference Surveys of Retailers; Jones Lang LaSalle; April 2013

Detailed discussion points, perceptions and preferences of Retailers’ Surveys, Shoppers and Mall Operators in Kochi are presented in Annexure under Section 9.2.

Achievable Rentals for Project Site

In order to arrive at a benchmark rental for the various format envisaged under the retail mall as part of the integrated mixed-use development on the Project Site, comparable projects under the organized retail in the micro-market are considered. These projects are either a part of the proposed mall or standalone complex operational in the micro-market. Adjustments are made in terms of premium and discount parameters to arrive at achievable pricing for the proposed retail mall on the Project Site.

For the Line Stores/ Vanilla Format, the recently transacted rental of Sobha City Mall, which is about INR 98 per sq. ft. per month (translated from the capital value @ 12% yield rate), is considered for the benchmarking. Whereas, for medium and larger format, Home Furnishing Shop from Omega Center (Off SH-69) and Reliance Trend (Grand Mall),

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located at West Fort has been considered and benchmarked to arrive at the achievable rental for the proposed retail development. The table in the following page presents the price benchmarking and adjustments to arrive at achievable pricing.

Table 6.7: Price Benchmarking - Achievable Rentals for the Proposed Mall on the Project Site Benchmark Competitive Retail Malls Grand Mall- Reliance Omega Center Trends Benchmark Unit - Average Rental Value (INR Adjustments Value Adjustments Value per sq. ft. per month) Benchmark Price 50 46 Premium / Discount Factors Accessibility 5% 3 5% 2 Location and Its Catchment -15% -8 - Catchment Profile -5% -3 - Total Adjustments -15% 43 5% 48 Average Achievable Rentals (INR per sq. ft.) Large 43 Medium 48 Format Format Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Based on the above table, average achievable lease rent (on leasable/chargeable area basis) will be INR 48 per sq. ft. per month, for the overall medium format mall, which is comparable to the size of the proposed retail mall on the Project Site. Please note that the above achievable average lease rent is as on the date of assessment and is expected to grow at around 5% per annum during the construction period. Considering 3 years for construction of the proposed retail mall on the Project Site, estimated achievable average lease rent for the retail mall will be INR 56 per sq. ft. per month during the year of operation.

Proposed mixed-use development on the Project Site envisages showroom space as part of the commercial block. Since the showroom space largely occupied by large retailers, who typically represent anchor and/or mini-anchor, the achievable rental for showroom space can be same as that of large format store, which is INR 43 per sq. ft. per month. Please note that the above lease rent is as on the date of assessment and is expected to grow at around 5% per annum during the construction period. Considering 3 years for construction of the proposed showroom space on the Project Site, estimated achievable lease rent for the showroom space will be INR 50 per sq. ft. per month during the year of operation.

6.3.3 COMMERCIAL / OFFICE SUB-SECTOR

At present, there are no graded commercial developments within the micro-market of the Project Site. However, KINFRA has plans to develop Apparel Park and Gold Park at Puzhakkal along with an IT Park. The Puzhackalpadam area is 40 acres in extent and proposed to be developed as a Knowledge Park by KINFRA.

Other commercial buildings within the micro-market include the government offices at Ayyanthole. The district headquarters is located at Ayyanthole and it houses primarily the District Collectorate, District Court, District Industrial Centre, Excise Department Office, Family Court, etc. The existing court campus is being expanded and the construction of the same commenced during 4Q 2012.

Key outcome of the occupiers’ surveys conducted with senior officials in some of the leading IT-ITES companies in Bangalore and Kochi are summarized below:

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. Decisions making in terms of expansion to new geographies are based on human resource team’s assessment of availability of quality skilled manpower of required experience and expertise. . Once a new geography qualifies as per human resource team’s assessment, other decision making parameters will be evaluated, which includes, good connectivity, general business environment (ease of doing business due to state/city specific policies), reliability of infrastructure (power, telecom, etc.), availability of good residential, retail, entertainment and leisure, education, healthcare options, and finally the real estate cost of doing business. . Real estate cost of doing business includes rentals for quality warm shell space, cost of support skilled/unskilled manpower (for housekeeping & administrative functions), cost of power, water supply, etc. . Based on existing expansion plans for leading IT-ITES companies in Bangalore, there are no concrete plans to expand to tier-2 and tier-3 cities as the respondents feel that quality of manpower, its cost and real estate cost in Bangalore is quite competitive compared to some of the established IT-ITES tier-2 cities in South India like Mangalore and Kochi. . Some of the occupiers informed that there were plans to expand to tier-2 cities in the past while such plans have been shelved during business restructuring after recent global financial crisis during 2009/2010. . Many of the IT-ITES companies in Bangalore had evaluated Kochi as Tier-2 city in Kerala and opined that Trissur was never evaluated for future expansion. . Occupiers in Kochi have opined that Thrissur is a potential geography for BPO/KPO related activities focusing BFSI segment. However, they do not have any expansion plans as such to expand their business in Thrissur.

In a nutshell, the occupiers’ surveys did not provide any concrete demand for IT-ITES office space in Thrissur in near future.

In order to arrive at a benchmark price (rental value) for commercial / office space on warm shell basis, for the proposed development on the Project Site, comparable projects in the micro-market have been considered and analyzed. Adjustments are made in terms of premium and discount parameters to arrive at the achievable rentals. As described earlier in the report, the city does not have graded commercial space. Most of the offices are located as part of the standalone complex where the floor plate size range from 3,000 to 4,000 sq. ft. Since there are no graded comparable instances for price benchmarking, standalone complex like Vijas Infra located near Vadakke Bus Stand, Spoon Tower (Poothole) and Fabis Arcade (High Road) are considered for benchmarking excises. The arrived average achievable rental for commercial / office space at Project Site is further qualified based on the size of the format, considering the prevailing market discounted percentage. The table in the following page presents the price adjustments carried out to arrive at achievable pricing for the commercial / office space at the Project Site.

Table 6.8: Price Benchmarking - Achievable Rentals for the Proposed Commercial / Office Space (on Warm Shell Basis) on the Project Site Benchmark Competitive Vijas Infra Spoon Tower Fabis Arcade Commercial Office Space Benchmark Unit - Average Rental Adjustments Value Adjustments Value Adjustments Value Value (INR per sq. ft. per month) Benchmark Price 58 50 60 Premium / Discount Factors Location -10% (6) -10% (5) -10% (6) Infrastructure Development - 10% 5 - Initiatives

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Benchmark Competitive Vijas Infra Spoon Tower Fabis Arcade Commercial Office Space Benchmark Unit - Average Rental Adjustments Value Adjustments Value Adjustments Value Value (INR per sq. ft. per month) Scalability Option 5% 3 5% 3 5% 3 Scale of Development -10% (6) -10% (5) -10% (6) Amenities Provided 5% 3 5% 3 5% 3 Grade of Construction 5% 3 5% 3 5% 3 Margin for Negotiation -10% (6) -10% (5) -10% (6) Status of the Project -10% (6) -10% (5) -10% (6) Adjusted Rental (INR per sq. -25% 44 -15% 43 -25% 45 ft.) Weightage 35% 35% 30% Average Achievable Rentals for Commercial / Office Space at the Project Site 44 (INR per sq. ft. per month) on Warm Shell Basis Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Since the proposed floor plate is about 10,000 sq. ft. and overall development is about 70,000 sq. ft., it is recommended to consider different formats for improving the marketability. The table below presents the suggestive format size along with achievable/ recommended rentals.

Table 6.9: Suggestive Format Sizes and Recommended Achievable Rentals for the Proposed Commercial / Office Space (on Warm Shell Basis) on the Project Site Sl. Format Type and Size Average Base Suggestive Achievable Rental No. Rental (INR per sq. Premium/ (INR per sq. ft. per ft. per month) Discount month) 1. Small Format (Unit Size up to 4,000 44 0% 44 sq. ft.) 2. Medium Format (Unit Size ranging 44 (10%) 39 between 4,001-10,000 sq. ft.) 3. Large Format (Unit Size ranging 44 (20%) 35 between 10,001-20,000 sq. ft.) 4. Anchor (Unit Size more than 20,000 44 (35%) 28 sq. ft.) - more than 30% of total Available Area Source: Real Estate Market Research and Analysis; Jones Lang LaSalle; April 2013

Based on the above table, average achievable lease rent (on leasable/chargeable area basis) will be INR 42 per sq. ft. per month, for offices spaces under different format & size. Please note that the above achievable average lease rent is as on the date of assessment and is expected to grow at around 5% per annum during the construction period. Considering 3 years for construction of the proposed office development on the Project Site, estimated achievable average lease rent for the office space will be INR 49 per sq. ft. per month during the year of operation.

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6.3.4 RESIDENTIAL SUB-SECTOR

Overview

The Project Site is located at Punkunnam, which forms part of the SBD. At present, the SBD is the most active market in the city due its proximity to the CBD, comparatively lesser land/real estate cost, and better infrastructure facilities, as compared to the CBD. The SBD includes areas like Ayyanthole, Chembukkav, Chungam, Kottapuram, Saktan Stand premises, locations near Mission Hospital, Palakkad Road, Poothole, Punkunnam, etc.

Micro-Market Trends - Apartment Typology

Supply: About 48% of total apartment supply is in the SBD locations with northwest and southern areas taking the largest share of 35% and 18% respectively. The share of southeast and western SBD is only 6% each. The northeastern SBD are in the early stages of development as majority of the land parcel is owned by the various government departments.

Absorption: The average absorption in the city for all the graded projects (Villas & Apartment) is around 62%. Grade-B & C projects had the highest absorption of 75% and 55% respectively depending upon the location and whereas the Grade-A projects has an average absorption of 60%. There is a marginal increase in the absorption figures from 2011 to 2012 due to weak economic scenario across the country.

Pricing: The average price range of apartments constituting all grades (Grade A, B & C) in the SBD locations like Punkunnam, Ayyanthole, Poothole, etc. ranging between INR 2,400- 3,700 per sq. ft. The table below presents historic trends in capital values of residential apartments in the select SBD locations in the city.

Other market trends in terms of historical capital values, typology, absorption, and inventory & mapping of upcoming residential apartments projects are presented in detail under Section 3.2 of this report.

6.3.5 HOSPITALITY SUB-SECTOR

While there are several starred hotels located within the micro-market of the Project Site, the most prominent being the Lulu International Convention Center, which is located within 1 km distance from the Project Site. Details of key hospitality developments in the city are detailed under Section 3.5 and the Lulu International Convention Center under the Section 3.6 of this report.

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7 RETAIL SHOPPING BEHAVIOR ANALYSIS

7.1 GENERAL

As stated in the previous chapter, the inputs for the assessment are derived from both market assessment and primary demand assessment surveys carried out within the primary & secondary catchments of the Project Site. In the case of primary demand assessment, a perception analysis has been conducted covering households and shoppers for shopping behavior & perceptions. Shoppers’ on-site exit surveys were conducted at City Center, Center Point and Big Bazaar (all together about 100 samples) while the household (in-home) surveys were conducted within select locations (all together about 215 samples) within the primary, secondary and tertiary catchments of the Project Site.

The sections below present the outcome and key observations on the shopping behavior & perceptions of the respondents of household and shoppers surveys.

It may be noted that the city does not have an operational mall and thus majority of the respondents may not have exposure to the retail mall and the experiences of shopping in retail mall. Thus, some of the responses may be attributed to such limited experience.

7.2 RETAIL SHOPPING BEHAVIOR OF TARGET POPULATION

Location Preference for Shopping

In terms of location preference for shopping, many respondents have indicated preference to shop in a mall for very few categories like Gaming/Entertainment, Multiplex, Books & Music, Arts & Crafts and Accessories, as presented in the charts below, separately for primary and secondary catchments of the Project Site.

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Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

Shopping Frequency, Expenditure and Group Size

Majority of the respondents of primary catchment prefer to shop within the city. Higher frequency of trips is for categories like Food & Beverages (2.1 times a month), Fine Dining & Multiplex (1.7 times each a month) and Food & Groceries (1.6 times per month). In case of secondary catchment, higher frequency was reported for Food & Groceries, followed by Food & Beverages and Multiplex. The charts below present monthly frequency of visits by the respondents for different categories of retail.

Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

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In terms of expenditure, excluding large ticket categories like Jewelleries, Furniture and Electronic Goods, highest expenditure is seen in Food & Groceries, Clothing & Fashion and Accessories in both primary and secondary catchment of the Project Site, as presented in the charts below.

Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

The average expenditure in the primary catchment is estimated as INR 41,403 per month while that of the secondary catchment is estimated as INR 39,398 per month.

Average group size visiting the shopping centers is 3.14 indicating the the group may consists of 3 to 4 persons.

Conveyance for Shopping

Majority (two-third) of the respondents prefer to use four wheelers for shopping in the catchment while about two-fifth of the respondents. Others have indicated preference for using Public Transport and Para Transport for shopping. Considering the majority responses, it is of paramount importance to provide adequate parking spaces both 4- wheelers and 2-wheelers in the proposed retail mall.

Perception Analysis

Preferred Shopping Location: In order to ascertain the perception of the target population for shopping, existing/operational shopping centers and malls both in Thrissur and Kochi are considered. A majority (91%) of the respondents in the primary and secondary catchment indicated their preference for shopping within Thrissur City. A small percentage

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(about 9%) of the respondents has reported their interest to visit Kochi mainly for multiplex & entertainment categories. City Center is the preferred shopping location for majority (41%) of the respondents.

Ranking of Operational Malls & Shopping Centers: Majority of the respondents ranked Big Bazaar as number one, as it meets the entire requirements under single roof. Similarly, City Center is also ranked as the best retail outlet, which also is a successful shopping center due to the variety of products available. However, the Center Point at MG Road is not preferred much due to poor design and availability of facilities & amenities. Besides the shopping centers in the city, almost 13% of the respondents have ranked malls in Kochi as a best place for shopping and entertainment.

Incentives and Disincentives for Visiting Operational Malls: The most favored shopping center in the city is City Center. The major incentives for shopping complex are adequacy of parking facilities, merchandise/activity mix, facility management, ambience, design, location and accessibility. No major disincentives are perceived for City Center. The next preferred outlet is Big Bazaar. The major incentives for shopping at Big Bazaar are the variety of products available, location and accessibility while respondents indicated displeasure on the non-availability of adequate parking. Centre Point was ranked third in the survey.

Rating of Location for Mall Development: The ranking of respondents indicate that the preferred location for a mall is MG Road followed by Swaraj Circle, East Fort, West Fort, Patturaikkal and Pookunnam. A majority (about 92%) of the respondents have rated the location of the Project Site (Pookunnam) as good in the primary catchment and scored almost maximum from the respondents of the secondary catchment. Thus, it can be inferred that the Project Site has a potential to emerge as the favored location for shopping.

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Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

Preferred Retail Format: Most favorable product mix option for establishing a new retail outlet in the catchment is a general Mall followed by mall plus hypermarket format. Since the catchment profile is yet to develop in terms of proportion of SEC A&B population category, a hypermarket along with a mall would be a preferred format.

Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

Preferred Activities within the Mall: Activities like Live Shows / Events and Exhibitions were most preferred by the respondents. In terms of facilities, most of the respondents have indicated the need for ATM, Valet Parking, Pick & Drop and Children Play Area within the mall. Activities like Discotheque and Fitness &

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Spa received lesser preference, as presented in the chart below.

Source: Primary Preference Surveys of Households & Shoppers; Jones Lang LaSalle; April 2013

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8 DEMAND SUPPLY ANALYSIS FOR RETAIL MALL AND BROAD TENANT MIX

8.1 GENERAL

As stated earlier, organized retail in Thrissur was introduced during 1998 with the launch of City Centre Mall by a private developer. This development comprised of a built up area of 45,000 sq. ft. and is a Shopping Complex. The trend has continued till date with similar kind development in the form of standalone shopping complexes being developed by many private developers across the city. The current stock of organized retail comprising of high street and standalone developments accounts to about 0.59 million sq. ft. and where the unorganized segment is about 0.39 million sq. ft., indicating a 60:40 ratio of organized to unorganized retail supply.

Thrissur has a presence of global and national brands such as Woodland, Nike, Flying Machine, Lee, Levis, Addidas, Puma, Navigator, Doc & Mark, Wrangler, John Miller, Big Bazzar, KFC (Upcoming- Swaraj Circle), Reliance Digital and Reliance Trends, etc. With the higher exposure for malls (with operation of the Sobha City Mall) and the increasing lifestyle characteristics and behavior, the city population is expected to move towards organized retailing like other cities in India, which will significantly increase demand for organized retail space in the city in the coming years.

8.2 METHODOLOGY ADOPTED FOR DEMAND SUPPLY ANALYSIS

The table below presents step-wise methodology adopted for carrying out demand-supply analysis for the primary, secondary & tertiary catchments of the Project Site.

Table 8.1: Methodology for Estimating Retail Demand Supply Gap for the Catchments of the Project Site Step Description / Action 1. Populations of the primary, secondary & tertiary catchments are considered as per the Census data and the number of households are arrived by dividing the catchment population by average household size of the catchment as arrived at using primary survey analysis 2. No of dwelling units added through future supply in a particular year is also added to the number of households assuming 1 household per new dwelling unit 3. Demand for the each retail category is calculated as per the following steps below: . {No. of target households x Trips per month per household x Spend per trip} = Monthly top-line revenue for each retail category. . Top-line monthly revenue x Occupancy cost (percent) = Monthly Occupancy Cost (INR) . Monthly occupancy cost / Rent per sq. ft. per month = potential demand for retail space (current demand) in sq. ft. per retail category is calculated. 4. Demand Supply Gap = Total Demand - Current Supply in Organized Retail Sector 6. Percentage Share of the Project Site with respect to Demand Supply Gap is calculated.

Demand for retail development is derived based on the catchment population, as maximum business would be catered by the primary & secondary catchment of the Project Site. Total retail space that the catchment can support has been derived based on the following parameters. . Total residing target households in the primary, secondary and tertiary catchments; . Population projections for the year 2016 based on Census 2001 & 2011 population;

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. Occupancy cost for retailers based on the discussions with the retailers and the prevailing market trends; and . Prevailing rentals for each category is based on the market survey of the retail areas.

The table below describes the total demand for retail space in the catchment area.

Table 8.2: Retail Demand Estimate for the Catchment of the Project Site Sl. Catchment Existing Households Target Households No. (Year 2013) (Year 2016) 1. Primary Catchment 16,037 17,385 2. Secondary Catchment 4,263 4,746 3. Tertiary Catchment (7% of district urban 9,432 12,828 population) Grand Total 29,732 34,959 Source: Primary Demand Assessment Surveys & Analysis; Jones Lang LaSalle; April 2013

8.3 DEMAND ASSESSMENT FOR RETAIL SPACE

The following table presents the demand perspective of the primary, secondary and tertiary catchment of the Project Site in terms of potential demand for space under different retail categories for horizon years of 2013 and 2016.

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Table 8.3: Derivation of Potential Retail Demand for the Catchment of the Project Site for the Year 2013 for Different Retail Categories Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment A. Food and Groceries 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 5,451 5,130 5071 3. Top-line monthly revenue (INR) 87,414,236 21,869,208 47,836,170 4. Occupancy cost 6% 6% 5. Monthly occupancy cost (INR) 6,557,007 2,870,170 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 135,756 59,424 195,180 B. Books and Music 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 749 699 650 3. Top-line monthly revenue (INR) 12,013,247 2,981,103 6,131,115 4. Occupancy cost 12% 12% 5. Monthly occupancy cost (INR) 1,799,322 735,734 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 18,360 7,507 25,868 C. Gifts and Toys 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 782 1,090 744 3. Top-line monthly revenue (INR) 12,532,162 4,644,774 7,015,410 4. Occupancy cost 12% 12%

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Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment 5. Monthly occupancy cost (INR) 2,061,232 841,849 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 21,033 8,590 29,623 D. Jewellery 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 21,712 23,273 21,143 3. Top-line monthly revenue (INR) 348,193,039 99,210,559 199,429,665 4. Occupancy cost 3% 3% 5. Monthly occupancy cost (INR) 13,422,108 5,982,890 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 277,890 123,869 401,760 E. Footwear and Leather Goods 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 2,571 2,501 2,321 3. Top-line monthly revenue (INR) 41,222,614 10,660,226 21,896,838 4. Occupancy cost 15% 15% 5. Monthly occupancy cost (INR) 7,782,426 3,284,526 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 79,413 33,516 112,928 F. Clothing and Fashion 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 3,674 3,243 2,857

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Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment 3. Top-line monthly revenue (INR) 58,917,667 13,824,788 26,949,955 4. Occupancy cost 15% 15% 5. Monthly occupancy cost (INR) 10,911,368 4,042,493 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 111,340 41,250 152,590 G. High-End Fashion Brands 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 6,153 5,576 4,393 3. Top-line monthly revenue (INR) 98,671,480 23,770,243 41,435,555 4. Occupancy cost 17% 17% 5. Monthly occupancy cost (INR) 20,202,884 6,836,867 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 206,152 69,764 275,916 H. Accessories, Baggage, Perfumes & Watches 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 4,525 3,784 2,750 3. Top-line monthly revenue (INR) 72,572,706 16,128,906 25,939,331 4. Occupancy cost 14% 14% 5. Monthly occupancy cost (INR) 11,974,718 3,501,810 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 122,191 35,733 157,924

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Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment I. Fast Food and Beverages 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 1,189 1,408 650 3. Top-line monthly revenue (INR) 19,072,845 6,00,0163 6,131,115 4. Occupancy cost 10% 10% 5. Monthly occupancy cost (INR) 2,507,301 613,111 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 51,911 12,694 64,605 J. Fine Dining 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 1,311 1,852 700 3. Top-line monthly revenue (INR) 21,022,216 7,895,613 6,602,739 4. Occupancy cost 15% 15% 5. Monthly occupancy cost (INR) 4,337,674 990,411 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 89,807 20,505 110,312 K. Body and Healthcare 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 1,163 2,173 1,507 3. Top-line monthly revenue (INR) 59,532,956 25,620,593 14,216,101 4. Occupancy cost 11% 11% 5. Monthly occupancy cost (INR) 9,366,890 1,563,771

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Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 193,931 32,376 226,308 L. Furniture and Furnishings 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 9,487 8,549 9,917 3. Top-line monthly revenue (INR) 59,532,956 25,620,593 93,538,801 4. Occupancy cost 8% 8% 5. Monthly occupancy cost (INR) 6,812,284 7,483,104 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 1,41,041 1,54,930 2,95,971 M. Electronic Goods 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 5,653 5,542 4,850 3. Top-line monthly revenue (INR) 90,647,728 23,623,013 45,747,548 4. Occupancy cost 3% 3% 5. Monthly occupancy cost (INR) 3,428,122 1,372,426 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 70,976 28,415 99,390 N. Multiplex and Movies 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 1,115 1,125 650 3. Top-line monthly revenue (INR) 17,882,574 4,794,291 6,131,115

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Sl. Trade / Merchandise Mix Primary Catchment Secondary Total of Primary Tertiary Catchment Potential Size of No. Catchment and Secondary the Trade Catchment 4. Occupancy cost 9% 9% 5. Monthly occupancy cost (INR) 2,040,918 551,800 6. Rent (INR per sq. ft. per month) 43 43 Potential Demand for Retail Space (sq. ft.) 48,022 12,984 61,005 O. Gaming and Entertainment 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 965 659 600 3. Top-line monthly revenue (INR) 15,475,304 2,809,632 5,659,490 4. Occupancy cost 11% 11% 5. Monthly occupancy cost (INR) 2,011,343 622,544 6. Rent (INR per sq. ft. per month) 48 48 Potential Demand for Retail Space (sq. ft.) 41,643 12,889 54,532 P. Arts and Crafts 1. Households (Nos.) 16,037 4,263 9,432 2. Monthly household expenditure (INR) 1,565 1,355 1025 3. Top-line monthly revenue (INR) 25,102,771 5,775,528 9,668,296 4. Occupancy cost 12% 12% 5. Monthly occupancy cost (INR) 3,705,396 1,160,196 6. Rent (INR per sq. ft. per month) 98 98 Potential Demand for Retail Space (sq. ft.) 37,810 11,839 49,649 Total Potential Demand for Retail Space in Year 2013 2,313,561 Source: Estimated based on Market Assessment and Primary Demand Assessment Surveys & Analysis; Jones Lang LaSalle; April 2013

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Based on the demand assessment carried out for the year 2013, demand scenario has been projected for year 2016 using the following assumptions: . Projecting the total residing households in the primary, secondary and tertiary catchments based on the Census 2001 & 2021 and the incremental residential units; . The household expenditure per month for each retail category has been kept constant and same as the year 2013 (without factoring the inflation and potential net increase in household expenditure year-on-year); and . The real estate rentals assumed for each retail category has also been constant as the year 2013 (without factoring the rental escalation/appreciation year-on-year).

The table below summarizes retail segment-wise demand for the year 2013 and 2016 based on the above.

Table 8.4: Estimation of Retail Demand of Thrissur City Sl. Trade / Merchandize Mix Potential Demand for Retail Space (sq. ft.) No. Current Demand (Year 2013) Projected Demand (Year 2016) 1. Food and Groceries 195,180 228,780 2. Books and Music 25,868 30,221 3. Gifts and Toys 29,623 34,650 4. Jewellery 401,760 471,517 5. Footwear and Leather Goods 112,928 132,147 6. Clothing and Fashion 152,590 177,420 7. High-End Fashion Brands 275,916 319,532 8. Accessories, Baggage 157,924 181,710 Perfumes, & Watches 9. Fast Food and Beverages 64,605 73,902 10. Fine Dining 110,312 125,961 11. Body and Healthcare 226,308 237,964 12. Furniture and Furnishings 295,971 351,750 13. Electronic Goods 99,390 116,016 14. Multiplex and Movies 61,005 70,013 15. Gaming and Entertainment 54,532 62,860 16. Arts and Crafts 49,649 57,296 Total 2,313,561 2,671,739 Source: Estimated based on Market Assessment and Primary Demand Assessment Surveys & Analysis; Jones Lang LaSalle; April 2013

Based on the above table, analysis and outcome, the city has a total demand for retail space to a tune of 2.31 million sq. ft. in the current year (2013) and the projected demand for retail space during the year 2016 (potential year of operation of retail mall on the Project Site) is estimated to be 2.67 million sq. ft.

8.4 DEMAND-SUPPLY-GAP ASSESSMENT

Based on the and assessment for retail space presented above, the city has a total demand for retail space to a tune of 2.31 million sq. ft. in the current year (2013) and the projected demand for retail space during the year 2016 (potential year of operation of retail mall on the Project Site) is estimated to be 2.67 million sq. ft. As on the date, the city has

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total organized stock of about 0.59 million sq. ft., which excludes under construction Sobha City Mall (gross leasable area of 320,000 sq. ft.). However, by the year 2016, the total organized retail supply (existing stock and proposed supply) is estimated to be about 1.10 million sq. ft. This includes the existing retail stock and proposed supply from Sobha City Mall, VMB Mall (Shopping Center) and Mall of Joy (Standalone Complex).

The table below summarizes demand-supply-gap scenario with respect to the proposed Retail Mall on the Project Site for the year 2013 and 2016 (estimated year of operation).

Table 8.5: Demand-Supply-Gap for the Potential Retail Space for the Project Site for the Year 2013 and 2016 Particulars Description Current (Year Projected (Year 2013) 2016) Demand for Organized Retail in the Catchment of the Project Site 2,313,561 2,671,739 (sq. ft.) Supply under the Organized Retail (sq. ft.) 586,276 1,101,753 Demand-Supply-Gap for Organized Retail (sq. ft.) 1,727,285 1,569,986 Potential Supply from Proposed Retail Mall (incl. Showroom 460,226 460,226 Space) on the Project Site as given by the Client (sq. ft.) Percentage Utilization 27% 29% Source: Estimated based on Market Assessment and Primary Demand Assessment Surveys & Analysis; Jones Lang LaSalle; April 2013

Based on the above, estimated utilization potential of the upcoming retail mall (incl. showroom space) on the Project Site from the existing demand-supply-gap in the year 2013 is about 27% and the same for projected demand-supply-gap in the year 2016 (estimated year of operation of the mall on the Project Site) is about 29%. Optimal utilization in terms of retail space concentration, from the normative market benchmarks available in tier-1 cities in India is estimated to be 15-20%. Considering normative benchmark of tier-1 cities, estimated utilization of the proposed mall on the Project Site is on the higher side. Since Thrissur retail market is in the beginning of transformation to organized retail and considering the fact that the proposed mall is positioned as city-mall, Consultants are of the opinion that the percentage utilization of 25-30% can be considered as favorable provided the proposed mall is well designed, appropriately positioned with suitable merchandize mix, appropriately priced and well managed during the entire period of operation.

Thus, conceptualization, design, amenities, positioning, mechanize mix, pricing and mall management plays a critical role in ensuring the success of the proposed retail mall on the Project Site.

8.5 BROAD TENANT MIX AND POSITIONING

Location Preference

The retail mix for the proposed mall on the Project Site is worked out from the location preference of various retail categories as expressed during the retailers’ surveys and is presented in the table in the following page.

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Table 8.6: Location Preference of Retail Categories within the Mall as Indicated by the Retailers in Thrissur Categories Apparel Footwear Home F&B Accessories Jewellery Gifts Electronics Supermarket Music Multiplex Furnishing Apparel Footwear Home Furnishing F&B Accessories Jewellery Gifts Electronics Supermarket Music Multiplex

Legend Less Preference Moderate Preference High Preference

In order to achieve optimal favorable mix, it is important to position the retail categories within the mall based on their preference as these preferences indicate inter-dependency and complementing characteristics of each of the retail categories in flourishing and sustaining the business. For example, earmarking a store for footwear category along with apparel, gifts category along with footwear, and gifts category along with footwear will help in creating induced buying behavior among the shoppers. Many a times similar category shops are placed together like apparel next to apparel etc. which helps the consumer in quicker decision making, understanding the location of all categories and creating efficient circulation system.

It is recommended to consider above location preferences indicated by the retailers while determining the tenant/merchandise mix and their position within the mall.

A tentative tenant mix indicating the above preferences for the retailers and positioning within the mall is provided in the Annexure 10.4

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Potential Formats and Brands

As per the current retail scenario in India, a mall development may be broadly divided into three major shop formats, viz. Large, Medium and Small. The percentage distribution of each format depends upon the scale of development and the mall positioning. Each format has a specific role to play within the mall and the success of a mall is largely determined by the efficient design, circulation, category break-up and percentage distribution of shop formats across the mall area. The major categories and brands present across different formats are presented in the table below.

Table 8.7: Potential Formats and Brands for Proposed Retail Mall on the Project Site Sl. Format Type of Retail Typical Sizes Brands having Presence in Kerala Brands having Presence in India in General and No. Categories (sq. ft.) South India in Particular 1. Large Department 15,000- 20,000 Westside Saga, Marks & Spencer’s, Shoppers Stop, Landmark Format - Store International, Pantaloon Retail, Central, Fashion Anchors Station, Depot and Star India Bazaar Hypermarket 30,000-100,000 Big Bazaar, Spencer and Lulu Hyper Market Wal-Mart, HyperCity, Spar and Shoprite Multiplex 15,000- 50,000 Q Cinemas, Cinemax & PVR Cinemas Big Cinemas, Prasads IMAX, Cinepolis, DT Cinemas, E-Square, SRS Cinemas, City Gold Cinemas, 2. Medium Home 10,000-15,000 Home Town, Dream Décor, Impression Furniture and Home stop & Center, Home Décor, Splash, Zurai Format - Furnishings Style Spa Furniture Furniture, Aanantaa, 48 Craft, Riviera Home, Deco Mini Window, Eco Cornor, Fablooms, Handloom Wala, Anchors Jovana Life Style, House This, Litte India, Kabadi, Rope, Shibori, Silver Queen, Saprose, United Floor, Salona Bichona, MOM Italy, Evok, Durian, Damro, Housefull, Usha Lexus and Zyne and Reliance Living Electronics 7,000-12,000 Reliance Digital, Sony Center/ Sony Exclusive Store Chroma, Apple and E-Zone Fine Dine 5,000-7,000 24 Carat Restaurant, Chak De Restaurant, Rice N Saffron, Taj Coromandel, Rang Mahal, Hard Rock Spice, Abad Food Court, Mainland China, Nila, Fort Cafes, California Pizza Kitchen, Oh! Calcutta and Kitchen, Wow Momo, Zaki, Havourit and BTH Masala Zone Apparel 5,000-10,000 Palathra Fashion-Diya, MAX Retail, Reliance Trends, Van Heusen, True Religion, Dolce & Gabbana, Grafitti Clothing, Mantra, Anarkali, Versace, Armani, Killer and Raymonds and Footwear Reliance Foot Print, Liberty, Bata, Red Tape, M&B, Mochi, Metro,

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Sl. Format Type of Retail Typical Sizes Brands having Presence in Kerala Brands having Presence in India in General and No. Categories (sq. ft.) South India in Particular Citywalk, Khadim’s and Lakhani Super Market 10,000-15,000 Food Bazaar, More, Nilgiris, Varkeys Food World, Reliance Mart and Mega Mart

Entertainment 4,000-8,000 Amoeba, Boomerang, Reliance Time Out, Toons, Dashing Car, Cross Word, Sparkys Healthcare 3000-6000 VLCC, Lakme Beauty Salon Jawed Habib Hair & Beauty Salon, Shahnaz Husain Spas and Salons, Naturals Unisex Salon and Spa, L’oreal Professionnel Salons, Star & Sitara Salon, Affinity Salon, Trends Hair & Style Salon, Jewellery 5,000-15,000 Jili Diamonds, Alapatt Gold, Millinium Gold, Mahar Gitanjali Jewels, Nakshatra, Asmi, D,damas, Silverware, Josco, Bhima Jewellary, Malabar Gold, Reliance Jewellery, Abharan jewelers and Saakshi Artique Diamond & Jewels, Avatar, jewelry 3. Small Branded shops 1,000- 2,500 KFC, Pizza Hut, Baskin & Robbins, Skei Ice Cream, Format - under all retail Arabian Mashwi, Chimes, Iceberg, Pepe Jeans, Inline Stores categories like Wrangler, Swiss Time, Pantaloons, Planet Fashion, / Vanilla Apparel, Wild Craft, Thomson Music, Levis, Peter England, Footwear, Gifts, Ayesha, Lee, Jockey, Music World, Fast Track, etc. Archie’s Gallery, Adidas, Hi Design, Navigator, Fab India, American Tourister, Venfield, John Miller, Linen by Bugoyne, Baby Planet, Laura Saloon, Body Art, Citizen & Tissot, Samsonite, Woodland, Gini & Jony, Titan, Nike, US Polo Flying Machine, Casio, Scarlett, Nokia, Addidas, Puma, Identiti, Cannon, Basic Life, K- Lounge, Doc & Mark, Time Factory, Souls, HP, Aircel, Coffee Lounge, Candy Treats, Cookie Man, Juice Bites, Pop King, Arrow, Blackberry, Cafe Coffee Day, Catmoss, Catwalk, Chicking, Cox& Kings, Domino's Pizza, Gold's Gym, JBL, KIDZEE, Koutons, Lawrence & Mayo, Lilliput, Music World, Noodle King, Rado, Rangoli, Reebok, Samsonite, Spykar, Zodiac, Wills Lifestyle, Yatra, Just Books, Beurer, The Body Shop,

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Sl. Format Type of Retail Typical Sizes Brands having Presence in Kerala Brands having Presence in India in General and No. Categories (sq. ft.) South India in Particular Celio, Ethnic Marigold, Kaati zone, Omega, McDonalds, Punjabi Libas, Rolex, Seiko, Soch and Samsung etc.

The above table indicates that there is larger presence of national and international retail brands in Kerala. The brands having presence in Kerala are easy to target for the proposed mall on the Project Site as these brands are familiar about doing business in the State and makes business sense for these brands to look at other cities like Thrissur as part of their expansion as most of these brands have larger presence in operational malls in Kochi.

There are several leading national and international brands having large presence in India in general and South India in particular. These brands may also be targeted for the proposed mall on the Project Site as these brands typically evaluate availability of suitable space meeting their brand standards to formulate their business plans for expansion to new territories and geographies.

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9 DEVELOPMENT MIX, BUSINESS PLAN AND FINANCIAL FEASIBILITY ASSESSMENT

9.1 PROPOSED DEVELOPMENT MIX ON THE PROJECT SITE

As stated earlier, the Client intends to develop a mixed-use development mix on the Project Site, comprising of a shopping mall, office and showroom spaces, hotel as well as residential apartments with the construction taking place in phases (in 3 phases). Tentative phasing of the development is given below:

. Phase I: Proposed to have a Retail Mall of 316,143 sq. ft. of built-up area within FAR and Commercial Block containing 224,223 sq. ft. of built-up area within FAR for both showroom space & commercial / office space on warm shell basis. The entire Phase I is expected to be spread over 4.46 acres land extent;

. Phase II: Proposed to have a Hotel Block and Convention Center Block. The Phase II development is expected to be spread over 6.84 acres land extent; and

. Phase III: This phase of development is expected to be only residential apartment. Land extent is yet to be finalized for the same.

Based on the area statement shared by the Client for the first phase, the Project Site, proposed development is envisaged over a land area of about 4.46 acres (194,276 sq. ft.) comprising Retail Mall, Showroom Space and Office Space. The table below summarizes the break-up of area statement.

Table 9.1: Break-Up of Area Statement for First Phase Development on the Project Site Sl. Uses Built-Up Area within FAR Description No. (sq. m.) (sq. ft.) 1. Retail Mall with 29,370.65 316,143 Planned from First Floor to Sixth Floor as a Multiplex Standalone Building with a small portion on the Ground Floor and Terrace Floors also. 2. Showroom 13,385.73 144,083 Planned from First Floor to Fifth Floor 3. Office 7,445.25 80,140 Planned from Sixth Floor to Tenth Floor above the Showroom Space Total 50,201.63 540,366 Source: As given by the Client

Based on the above area statement, FAR area is about 50,201.63 sq. m., which translates into 540,366 sq. ft., which translates into utilized FAR of 2.78 on land extent of 4.46 acres (i.e. 194,276 sq. ft.). Total built-up area including service areas, common areas, parking, etc. works out to 956,150 sq. ft.

Detailed assessment for components proposed under Phase I development comprising Retail Mall incl. Showroom Space and Commercial / Office Space is presented in the earlier chapters. This chapter presents the overall project configuration, development phasing, key cost & revenue assumptions, detailed business plan and key financial indicators & sensitivity analysis leading to financial feasibility.

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9.2 OVERALL PROJECT CONFIGURATION

9.2.1 BUILT-UP AREA AND SALEABLE AREA STATEMENT

The table below presents the suggested and/or validated product mix along with built-up area and saleable / leasable area statement for first phase development on the Project Site.

Table 9.2: Product Mix and Built-Up Area and Saleable / Leasable Area Statement for the First Phase of the Development on the Project Site Sl. Activity / Product Mix Built-Up Area Proportion with Saleable / within FAR (sq. respect to the Leasable Area ft.) Project (sq. ft.) A. Retail Mall with Multiplex 1. Retail Space 316,143 58.51% 336,614 Sub-Total (A) 316,143 58.51% 336,614 B. Showroom and Office 1. Showroom Space 144,083 26.66% 157,703 2. Office Space 80,140 14.83% 87,715 Sub Total (B) 224,223 41.49% 245,418 Grant Total 540,366 100.00% 582,032 Note: Loading of 6.48% and 9.45% is applied on retail and showroom & office space built-up area to arrive at saleable area as per the common area calculations given by the Client Source: As given by the Client

9.2.2 CAR PARKING PROVISION

Car parking is provided as per the prevailing development control regulations applicable for different type of activities as indicated by the Client. Total of about 701 Car Parking Units (CPU) are provided for the First Phase of development on the Project Site. The table below summarizes car parking provided under the Project Site for the First Phase development, distributed on proportionate basis.

Table 9.3: Car Parking Provision for the First Phase of the Development on the Project Site Sl. Activity / Product Mix Proposed Standard No. of Car Total Area under Car Parking Units Parking (sq. ft.) A. Retail Mall with Multiplex 1. Retail Mall 1 CPU for 819 sq. ft. 386 207,908 Sub-Total (A) 386 207,908 B. Showroom and Office 1. Showroom Space 1 CPU for 713 sq. ft. 202 109,198 2. Office Space 1 CPU for 709 sq. ft. 113 60,737 Sub Total (B) 315 169,936 Grant Total 701 377,843

Above parking provision is provided under 2 basements and ground floor as indicated by the Client.

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9.2.3 DEVELOPMENT PHASING

The Commercial Operation Date (COD) is expected to be 3 years from the date of commencement of the construction. The table below presents development phasing of various project components.

Table 9.4: Proposed Development Phasing for the Project Site Sl. Activity / Product Mix Development Phasing Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

A. Retail Mall with Multiplex Expected COD 1. Retail Mall B. Showroom and Office 1. Showroom Space 2. Office Space

Entire project is proposed to be executed in one phase with development phasing over 3 years period.

Detailed business plan has been prepared for the entire project and financial feasibility has been explored for the entire project on EBIDT basis. However, bankability indicators (for debt financing) have been prepared on post-tax basis.

Key assumptions used in the business plan, consolidated business plan, feasibility and bankability indicators are presented in the next section.

9.3 KEY COST AND REVENUE ASSUMPTIONS

The table below presents some of the key cost and revenue assumptions used in the business plan. Most of the assumptions have been made based on the prevailing market conditions and market practices of the Thrissur real estate market and/or construction industry.

Table 9.5: Key Cost and Revenue Assumptions used for Business Plan for the Project Site Parameters Assumptions Remarks / Basis CAPITAL EXPENDITURE / COST ASSUMPTIONS Land INR 36 per sq. ft. on built-up area / FAR bass. (This This ranges between INR 75-100 Development component comprises site leveling & grading, laying per sq. ft. on plot area basis Cost trunk infrastructure within the Project Site like water depending upon the site supply, sewerage, drainage, power, streetlights, etc. - conditions. - worked out considering INR 100 per sq. ft. on plot area basis) Sanction Fees INR 35 per sq. ft. for commercial development To be considered on the built-up and Cost of (Comprises cost of approvals like sanction plan area basis. Cost considered as Approvals approval fee & other administrative expenses) per the prevalent market practice. Deposits INR 74 per sq. ft. for (Comprises deposits payable to To be considered on the built-up Payable to civic authorities like Electricity & Water Supply for area basis. Cost considered as Civic taking necessary service connections & other per the prevalent market Authorities administrative expenses) practice. Cost 7% per annum Assuming 5% average inflation

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Parameters Assumptions Remarks / Basis Escalation and 2% for increase in cost of materials. Car Parking Car parking average estimated based on car parking As prevalent in Thrissur Real configuration on 2 basements and Ground Floor. Estate market Average for the proposed development works out to INR 750 per sq. ft. Organized INR 2,175 per sq. ft. on built-up area basis. Tentative Includes civil works, high-side Retail Mall & broad break-up is given below: electrical, air-conditioning for Multiplex . Civil Works - INR 1,000 per sq. ft. entire mall, fire hydrants, power back-up, lifts & escalators, . High-side Electrical - INR 200 per sq. ft. security and common area . Air-Conditioners - INR 200 per sq. ft. finishing with false ceiling, . Fire Hydrants - INR 80 per sq. ft. flooring & low-side electrical. . False Ceiling * - INR 53 per sq. ft. Common area considered as 35% of built-up area . Flooring * - INR 140 per sq. ft. . Genset - INR 120 per sq. ft. . Lifts & Escalators - INR 250 per sq. ft. . Security - INR 10 per sq. ft. . Low-side Electrical * - INR 123 per sq. ft. * Expenses accounted for only common areas, which is estimated to be about 35% of the area Showroom and INR 1,760 per sq. ft. on built-up area basis. Tentative Includes civil works, high-side Office Space broad break-up is given below: electrical, air-conditioning for on Warm Shell . Civil Works - INR 950 per sq. ft. entire building, fire hydrants, Basis power back-up, lifts, security and . High-side Electrical - INR 175 per sq. ft. common area finishing with false . Air-Conditioners - INR 200 per sq. ft. ceiling, flooring & low-side . Fire Hydrants - INR 80 per sq. ft. electrical. Common area . False Ceiling * - INR 20 per sq. ft. considered as 20% of built-up area . Flooring * - INR 80 per sq. ft. . Genset - INR 120 per sq. ft. . Lifts - INR 85 per sq. ft. . Security - INR 10 per sq. ft. . Low-side Electrical * - INR 40 per sq. ft. * Expenses accounted for only common areas, which is estimated to be about 20% of the area Preliminary 15% (Includes expenses required for a) feasibility Expressed as percentage of the and study & design consultancy (4%); b) project Construction Cost Preoperative management costs (2%); c) publicity, advertisement Costs and marketing expenses (2%); d) miscellaneous / administrative expenses (2%); and e) contingency expenses (5%)) REVENUE ACCOUNT ASSUMPTIONS Organized . Weighted Average Lease Rent - INR 48 per sq. . Please refer to Section Retail & ft. per month on leasable/chargeable area basis. 6.3.2; Table 6.7 (Page 81) Multiplex Average lease rent as on the date of assessment for achievable average - year 2013) lease rent for the retail mall . Car Parking Charges - INR 1,500 per CPU per . Other assumptions are as month per the market practice for . Price Appreciation during Construction - 5% per retail developments in

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Parameters Assumptions Remarks / Basis annum from the base year (i.e. year of Thrissur assessment - year 2013) till the completion of construction 3 years) . Price Appreciation during Operation - 15% every 3 years from the year of completion of construction . Price appreciation is applicable for both leasable area and car parking . Interest on Deposits - Deposits assumed as average of 10 months rentals with interest earned on the same at 8% per annum . Non-Occupancy Cost - 5% per annum on average . Sale Costs and Overheads - 2% of total receipts . Mall Management Charges - 2% of the total receivables from the Mall . Insurance Premium - assumed as 0.15% of the development cost estimated, increasing at 5% per annum from the year of operation. . Property Tax - assumed as INR 10 per sq. ft. per annum, increasing at 5% per annum from the year of operation. . Occupancy during first year of operation assumed at 80% and that of second & third year assumed at 90% & 100% respectively. Stabilization occupancy at 100% from fourth year of operation. Showroom . Weighted Average Lease Rent - INR 43 per sq. . Please refer to Section Space on ft. per month on leasable/chargeable area basis. 6.3.2; Table 6.7 (Page 81) Warm Shell Average lease rent as on the date of assessment for achievable average Basis - year 2013) lease rent for the large . Car Parking Charges - INR 1,500 per CPU per format stores and month showroom space . Price Appreciation during Construction - 5% per . Other assumptions are as annum from the base year (i.e. year of per the market practice for assessment - year 2013) till the completion of large showroom construction 3 years) developments in Thrissur . Price Appreciation during Operation - 15% every 3 years from the year of completion of construction . Price appreciation is applicable for both leasable area and car parking . Interest on Deposits - Deposits assumed as average of 10 months rentals with interest earned on the same at 8% per annum . Non-Occupancy Cost - 5% per annum on average . Sale Costs and Overheads - 2% of total receipts . Insurance Premium - assumed as 0.15% of the development cost estimated, increasing at 5% per annum from the year of operation.

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Parameters Assumptions Remarks / Basis . Property Tax - assumed as INR 10 per sq. ft. per annum, increasing at 5% per annum from the year of operation. . Occupancy during first year of operation assumed at 80% and that of second & third year assumed at 90% & 100% respectively. Stabilization occupancy at 100% from fourth year of operation. Office Space . Weighted Average Lease Rent - INR 42 per sq. . Please refer to Section on Warm Shell ft. per month on leasable/chargeable area basis. 6.3.3; Table 6.8 and 6.9 Basis Average lease rent as on the date of assessment (Page 82-83) for achievable - year 2013) average lease rent for the . Car Parking Charges - INR 1,500 per CPU per office space of all formats & month sizes . Price Appreciation during Construction - 5% per . Other assumptions are as annum from the base year (i.e. year of per the market practice for assessment - year 2013) till the completion of large showroom construction 3 years) developments in Thrissur . Price Appreciation during Operation - 15% every 3 years from the year of completion of construction . Price appreciation is applicable for both leasable area and car parking . Interest on Deposits - Deposits assumed as average of 10 months rentals with interest earned on the same at 8% per annum . Non-Occupancy Cost - 5% per annum on average . Sale Costs and Overheads - 2% of total receipts . Insurance Premium - assumed as 0.15% of the development cost estimated, increasing at 5% per annum from the year of operation. . Property Tax - assumed as INR 10 per sq. ft. per annum, increasing at 5% per annum from the year of operation. . Occupancy during first year of operation assumed at 50% and that of second & third year assumed at 70% & 90% respectively. Stabilization occupancy at 100% from fourth year of operation. Common Area Assumed as pass-on cost and not used in the Client would collect this charge Management business plan from the tenants and utilizes the (CAM) same for CAM Charges OTHER ASSUMPTIONS Depreciation Rates as per Indian Companies Act using Straight- Depreciation benefits are Schedule Line Method accounted for the entire project . Buildings - 3.34% cost individual component-wise. . Plants & Machinery - 10.34% . Air Conditioning - 4.75%

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Parameters Assumptions Remarks / Basis . Miscellaneous Assets - 6.33% Weighted Average Depreciation Asset-Class-wise . Retail Development (Shopping Mall-cum- Multiplex) - 4.88% . Showroom and Office Space on Warm Shell Basis - 4.51% Capital . Financial analysis and indicators are presented Structuring as agreed with the Structuring and on EBIDT (earnings before interest, depreciation Client Taxation and tax) basis as well as post-tax Taxation as per the Indian . Post-tax business plan with Debt-Equity Income Tax Act considering the structuring of 1:1 is proposed for the proposed asset as ‘House Property’, development. without any tax-efficiency . Applicable Taxation considering as Business measures. Income o Corporate Tax - 30% of taxable income o Surcharge - 5% of Corporate Tax o Education Cess - 3% of Corporate Tax o Effective Tax Component - 32.45% of the taxable income. Capitalization . Retail Development & Multiplex - 12% As prevalent in the market - Rates . Showroom and Office Space on Warm Shell based on market assessment Basis - 11% . Car parking under respective asset classes are capitalized with same capitalization rates as that of the asset class LAND VALUE Tentative . INR 50 Million per Acre, which translates into Tentative market value based on Market Value INR 1,148 per sq. ft. market assessment of the Land . Total land value works out to INR 223.03 million for 4.46 acres land under the First Phase development CAPITAL STRUCTURING Financing and . Combination of debt and equity in the ratio of Debt terms & conditions as Debt Terms approximately 1:1 prevalent for commercial real and Conditions . Debt Terms & Conditions estate project based on their discussion with the financial o Construction Finance institution. . Drawdown - 12 quarters . Principle moratorium - 12 quarters . Repayment - through Lease Rent Discounted (LRD) Loan post operation . Rate of Interest - 14% per annum o LRD Finance . Repayment period - 10 years . Rate of Interest - 13% per annum (100 bps discount on

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Parameters Assumptions Remarks / Basis construction loan) . Ballooned payment considering debt service coverage ratio of 1.50

9.4 ESTIMATED PROJECT COST

Based on above key capital cost assumptions and built-up area statement detailed above, the estimated project cost for the first phase of the proposed development on the Project Site is summarized in the table below:

Table 9.6: Estimated Project Cost for the Proposed First Phase Development on the Project Site Sl. Activity / Product Mix Built-Up Area Unit Gross Development Total Estimated Project (within FAR) Cost (INR per sq. ft.) Cost (INR Million) (sq. ft.) 1. Retail Mall with Multiplex 316,143 3,478 1,099.50 2. Showroom and Office Space 224,223 3,052 684.43 Grant Total 540,366 1,783.93 Total Development Cost 1,783.93 Add: Interest during Construction 224.00 Add: Land Value as per the Books 223.03 Total Estimated Project Cost (incl. Land Value and Interest during 2,230.96 Construction)

9.5 CAPITAL STRUCTURING AND DEBT REPAYMENT SCHEDULE

As stated above, the capital structuring for the proposed development envisages sources of fund from following sources: . INR 1,100 million through debt from financial institutions, which translates into 49.31% of the estimated Project Cost for the development under the First Phase; and . Balance INR 1,130.96 million through equity contribution by the Client, which translates into 50.69% of the estimated Project Cost for the development under the First Phase.

Summary of the proposed capital structuring for the First Phase development is presented in the table below.

Table 9.7: Capital Structuring Used in the Business Plan for the First Phase of Development on the Project Site Sl. Sources of Funds Percentage of the Total Amount (INR No. Project Cost Million) 1. Debt Financing from the Financial Institutions 49.31% 1,100.00 2. Equity Contribution from the Client 50.69% 1,130.96 Total 100.00% 2,230.96

Below are the debt related assumptions used in the business plan for the proposed development under the First Phase based on the commercial real estate project financing terms & conditions based on the discussions with the leading financial institutions.

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. Construction Finance o Drawdown - 12 quarters o Principle moratorium - 12 quarters o Repayment - through Lease Rent Discounted (LRD) Loan post operation o Rate of Interest - 14% per annum . LRD Finance o Repayment period - 10 years o Rate of Interest - 13% per annum (100 bps discount on construction loan) o Ballooned payment considering debt service coverage ratio of 1.50

Following table presents debt drawdown and repayment schedule based on the above capital restructuring for the proposed First Phase development on the Project Site.

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Table 9.8: Capital Structuring, Debt Repayment Schedule and Debt Indicators for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Total Development Cost 1,783.93 INR Million 392.56 672.16 719.21 - - - - - Interest during Construction 224.00 INR Million 24.50 73.50 126.00 - - - - - (Capitalized) Estimated Tentative Market 223.03 223.03 INR Million 223.03 Value of the Land Total Project Cost 2,230.96 INR Million 640.09 745.66 845.21 - - - - - Capital Structuring / Funding Equity Contribution by 50.69% 1,130.96 INR Million 290.09 395.66 445.21 - - - - - Developer Debt by a Financial Institution 49.31% 1,100.00 INR Million 350.00 350.00 400.00 - - - - - Debt Schedule Opening Balance INR Million - 350.00 700.00 1,100.00 1,070.64 1,015.42 931.53 805.88 Loan Receipts INR Million 350.00 350.00 400.00 - - - - - Loan Repayment INR Million - - - 29.36 55.23 83.88 125.65 134.31 Closing Balance INR Million 350.00 700.00 1,100.00 1,070.64 1,015.42 931.53 805.88 671.57 Interest Total Interest on the Debt 1,054.46 INR Million 24.50 73.50 126.00 141.09 135.59 126.55 112.93 96.03 Component Interest during Construction 14.00% 224.00 INR Million 24.50 73.50 126.00 Interest during Operation 13.00% 830.46 INR Million 141.09 135.59 126.55 112.93 96.03 Key Debt Financing Indicators Interest Service Ratio 1.95 2.35 2.85 3.73 4.38 Debt Service Ratio 3.90 2.73 2.25 1.95 1.91

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Debt Service Coverage Ratio 1.50 1.50 1.50 1.50 1.53

Table 9.9: Capital Structuring, Debt Repayment Schedule and Debt Indicators for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Total Development Cost 1,783.93 INR Million ------Interest during Construction 224.00 INR Million ------(Capitalized) Estimated Tentative Market 223.03 223.03 INR Million Value of the Land Total Project Cost 2,230.96 INR Million ------Capital Structuring / Funding Equity Contribution by 50.69% 1,130.96 INR Million ------Developer Debt by a Financial Institution 49.31% 1,100.00 INR Million ------Debt Schedule Opening Balance INR Million 671.57 537.26 402.94 268.63 134.31 - - Loan Receipts INR Million ------Loan Repayment INR Million 134.31 134.31 134.31 134.31 134.31 - - Closing Balance INR Million 537.26 402.94 268.63 134.31 - - - Interest Total Interest on the Debt 1,054.46 INR Million 78.57 61.11 43.65 26.19 8.73 - - Component Interest during Construction 14.00% 224.00 INR Million Interest during Operation 13.00% 830.46 INR Million 78.57 61.11 43.65 26.19 8.73 - -

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15

Key Debt Financing Indicators Cash Profit (Net Cash Accruals INR Million 133.02 193.75 205.09 216.40 284.47 424.16 5,227.03 - Loan Repayment) Project Cash Flows (including INR Million 420.60 484.72 484.18 483.61 557.34 556.72 5,359.49 Land Cost) - EBIDTA Equity Cash Flows (including INR Million 133.02 193.75 205.09 216.40 284.47 424.16 5,227.03 Land Cost) of the Project Interest Service Ratio 5.35 7.93 11.09 18.46 63.84 - - Debt Service Ratio 1.99 2.44 2.53 2.61 3.12 Debt Service Coverage Ratio 1.62 1.99 2.15 2.35 2.99

9.6 FINANCIAL ANALYSIS AND BUSINESS PLAN FOR THE PROPOSED FIRST PHASE DEVELOPMENT

9.6.1 CONSOLIDATED BUSINESS PLAN FOR THE ENTIRE FIRST PHASE DEVELOPMENT

Considering the overall development and revenue stabilization period, business plan is prepared for the 15 years period and factored exit valuation (terminal cash flow) at the end of 15 years period. The tables below present the consolidated business plan for the proposed First Phase development on the Project Site on both EBIDTA and post-tax basis.

Table 9.10: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Consolidated Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Capital Account Capital Expenditure Retail Mall with Multiplex 1,099.50 INR Million 239.95 415.25 444.31 - - - - - Showroom and Office 684.43 INR Million 152.61 256.91 274.90 - - - - - Total Development Cost 1,783.93 INR Million 392.56 672.16 719.21 - - - - -

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Interest during Construction 224.00 INR Million 24.50 73.50 126.00 - - - - - (Capitalized) Estimated Tentative Market 223.03 223.03 INR Million 223.03 Value of the Land Total Project Cost 2,230.96 INR Million 640.09 745.66 845.21 - - - - - Revenue Account Receipts Retail Mall with Multiplex 3,458.55 INR Million - - - 188.48 212.03 235.59 270.93 270.93 Showroom and Office 2,227.75 INR Million - - - 106.92 127.72 148.55 177.06 177.06 Total Net Revenue Receipts 5,686.30 INR Million - - - 295.40 339.75 384.14 448.00 448.00 Expenditure Retail Mall with Multiplex 249.50 INR Million - - - 14.23 15.65 17.08 19.12 19.39 Showroom and Office 96.59 INR Million - - - 5.41 5.99 6.57 7.33 7.51 Total Revenue Expenditure 346.09 INR Million - - - 19.64 21.64 23.66 26.44 26.91 Gross Operating Profit 5,340.21 INR Million - - - 275.76 318.11 360.49 421.56 421.09 (EBIDTA Basis) Add: Terminal Cash Flow 4,803.43 INR Million ------Net Cash Accruals (on 7,912.69 INR Million (640.09) (745.66) (845.21) 275.76 318.11 360.49 421.56 421.09 EBIDTA Basis) Capital Structuring / Funding Equity Contribution by 50.69% 1,130.96 INR Million 290.09 395.66 445.21 - - - - - Developer Debt by a Financial Institution 49.31% 1,100.00 INR Million 350.00 350.00 400.00 - - - - - Debt Schedule Opening Balance INR Million - 350.00 700.00 1,100.00 1,070.64 1,015.42 931.53 805.88

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Loan Receipts INR Million 350.00 350.00 400.00 - - - - - Loan Repayment INR Million - - - 29.36 55.23 83.88 125.65 134.31 Closing Balance INR Million 350.00 700.00 1,100.00 1,070.64 1,015.42 931.53 805.88 671.57 Interest Total Interest on the Debt 1,054.46 INR Million 24.50 73.50 126.00 141.09 135.59 126.55 112.93 96.03 Component Interest during Construction 14.00% 224.00 INR Million 24.50 73.50 126.00 Interest during Operation 13.00% 830.46 INR Million 141.09 135.59 126.55 112.93 96.03 Calculation of Taxable Income Gross/Net Operating Profit (on 5,340.21 INR Million - - - 275.76 318.11 360.49 421.56 421.09 EBIDTA basis) Interest during Operation 830.46 INR Million - - - 141.09 135.59 126.55 112.93 96.03 Depreciation 1,014.01 INR Million - - - 84.50 84.50 84.50 84.50 84.50 Property Tax Payable 86.01 INR Million - - - 5.40 5.67 5.96 6.26 6.57 Taxable Income (PBT) - 30% 3,089.74 INR Million - - - 61.91 98.26 138.18 196.29 212.97 Considering as 'House Property' Profit before Tax (PBT) 4,509.75 INR Million - - - 134.67 182.52 233.93 308.62 325.05 Deduct: Corporate Tax (incl. 32.45% 1,002.47 INR Million - - - 20.09 31.88 44.83 63.69 69.10 Surcharge and Education Cess) Net Profit (PAT) 3,507.28 INR Million - - - 114.58 150.64 189.10 244.94 255.96 Add: Terminal Cash Flow 4,803.43 INR Million ------Net Cash Accruals (Post Tax) 8,310.72 INR Million - - - 114.58 150.64 189.10 244.94 255.96 Summary Cash Flows and Key Financial Indicators Cash Profit (Net Cash Accruals INR Million - - - 85.22 95.41 105.22 119.29 121.64

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 - Loan Repayment) Project Cash Flows (including INR Million (640.09) (745.66) (845.21) 275.76 318.11 360.49 421.56 421.09 Land Cost) - EBIDTA Equity Cash Flows (including INR Million (290.09) (395.66) (445.21) 85.22 95.41 105.22 119.29 121.64 Land Cost) of the Project Interest Service Ratio 1.95 2.35 2.85 3.73 4.38 Debt Service Ratio 3.90 2.73 2.25 1.95 1.91 Debt Service Coverage Ratio 1.50 1.50 1.50 1.50 1.53

Table 9.11: Consolidated Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Consolidated Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Capital Account Capital Expenditure Retail Mall with Multiplex 1,099.50 INR Million ------Showroom and Office 684.43 INR Million ------Total Development Cost 1,783.93 INR Million ------Interest during Construction 224.00 INR Million ------(Capitalized) Estimated Tentative Market 223.03 223.03 INR Million Value of the Land Total Project Cost 2,230.96 INR Million ------Revenue Account Receipts Retail Mall with Multiplex 3,458.55 INR Million 270.93 311.57 311.57 311.57 358.31 358.31 358.31 Showroom and Office 2,227.75 INR Million 177.06 203.62 203.62 203.62 234.17 234.17 234.17

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Total Net Revenue Receipts 5,686.30 INR Million 448.00 515.20 515.20 515.20 592.48 592.48 592.48 Expenditure Retail Mall with Multiplex 249.50 INR Million 19.69 22.03 22.35 22.69 25.38 25.75 26.14 Showroom and Office 96.59 INR Million 7.71 8.45 8.67 8.90 9.75 10.01 10.27 Total Revenue Expenditure 346.09 INR Million 27.40 30.48 31.02 31.59 35.13 35.76 36.42 Gross Operating Profit 5,340.21 INR Million 420.60 484.72 484.18 483.61 557.34 556.72 556.06 (EBIDTA Basis) Add: Terminal Cash Flow 4,803.43 INR Million ------4,803.43 Net Cash Accruals (on 7,912.69 INR Million 420.60 484.72 484.18 483.61 557.34 556.72 5,359.49 EBIDTA Basis) Capital Structuring / Funding Equity Contribution by 50.69% 1,130.96 INR Million ------Developer Debt by a Financial Institution 49.31% 1,100.00 INR Million ------Debt Schedule Opening Balance INR Million 671.57 537.26 402.94 268.63 134.31 - - Loan Receipts INR Million ------Loan Repayment INR Million 134.31 134.31 134.31 134.31 134.31 - - Closing Balance INR Million 537.26 402.94 268.63 134.31 - - - Interest Total Interest on the Debt 1,054.46 INR Million 78.57 61.11 43.65 26.19 8.73 - - Component Interest during Construction 14.00% 224.00 INR Million Interest during Operation 13.00% 830.46 INR Million 78.57 61.11 43.65 26.19 8.73 - -

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15

Calculation of Taxable Income Gross/Net Operating Profit (on 5,340.21 INR Million 420.60 484.72 484.18 483.61 557.34 556.72 556.06 EBIDTA basis) Interest during Operation 830.46 INR Million 78.57 61.11 43.65 26.19 8.73 - - Depreciation 1,014.01 INR Million 84.50 84.50 84.50 84.50 84.50 84.50 84.50 Property Tax Payable 86.01 INR Million 6.90 7.24 7.60 7.98 8.38 8.80 9.24 Taxable Income (PBT) - 30% 3,089.74 INR Million 230.20 294.46 311.66 328.86 400.13 408.57 408.26 Considering as 'House Property' Profit before Tax (PBT) 4,509.75 INR Million 342.02 423.60 440.52 457.42 548.61 556.72 556.06 Deduct: Corporate Tax (incl. 32.45% 1,002.47 INR Million 74.69 95.54 101.12 106.70 129.82 132.56 132.46 Surcharge and Education Cess) Net Profit (PAT) 3,507.28 INR Million 267.34 328.07 339.41 350.72 418.79 424.16 423.60 Add: Terminal Cash Flow 4,803.43 INR Million ------4,803.43 Net Cash Accruals (Post Tax) 8,310.72 INR Million 267.34 328.07 339.41 350.72 418.79 424.16 5,227.03 Summary Cash Flows and Key Financial Indicators Cash Profit (Net Cash Accruals INR Million 133.02 193.75 205.09 216.40 284.47 424.16 5,227.03 - Loan Repayment) Project Cash Flows (including INR Million 420.60 484.72 484.18 483.61 557.34 556.72 5,359.49 Land Cost) - EBIDTA Equity Cash Flows (including INR Million 133.02 193.75 205.09 216.40 284.47 424.16 5,227.03 Land Cost) of the Project Interest Service Ratio 5.35 7.93 11.09 18.46 63.84 - - Debt Service Ratio 1.99 2.44 2.53 2.61 3.12 Debt Service Coverage Ratio 1.62 1.99 2.15 2.35 2.99

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9.6.2 BUSINESS PLAN FOR THE RETAIL MALL AND MULTIPLEX

Considering the overall development and revenue stabilization period, business plan is prepared for the 15 years period and factored exit valuation (terminal cash flow) at the end of 15 years period. The tables below present the business plan for the retail mall & multiplex on EBIDT basis.

Table 9.12: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Retail Mall and Multiplex Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Capital Account Construction Phasing 20% 40% 40% 0% 0% 0% 0% 0% Capital Expenditure Land Development Cost 36 11.37 INR Million 11.37 ------Sanction Fees and Cost of 35 11.07 INR Million 11.07 ------Approvals Deposits Payable to Civic 74 23.47 INR Million 23.47 ------Authorities Cost of Construction - Retail Mall 2,175 INR per sq. 2,175 2,327 2,490 2,664 2,851 3,051 3,264 3,493 & Multiplex Space (excl. Car ft. Parking) Cost of Construction - Parking 750 INR per sq. 750 803 859 919 983 1,052 1,126 1,204 ft. Escalation in Construction Cost 7% Total Construction Cost 916.17 INR Million 168.73 361.08 386.36 - - - - - (including Parking) Preliminary and Preoperative 15% 137.43 INR Million 25.31 54.16 57.95 - - - - - Costs (Percentage of Construction Costs) Total Development Cost 3,478 1,099.50 INR Million 239.95 415.25 444.31 - - - - -

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Revenue Account Absorption Rate of Leasable 0% 0% 0% 80% 90% 100% 100% 100% Area Leasable 336,614 sq. ft. - - - 269,291 302,953 336,614 336,614 336,614 Area No. of 386 Nos. - - - 309 347 386 386 386 CPUs Receipts Weighted Average Lease Rent 48.00 INR per sq. 48.00 50.40 52.92 55.57 55.57 55.57 63.90 63.90 ft. per month Car Parking Charges 1,500 INR per CPU 1,500 1,575 1,654 1,736 1,736 1,736 1,997 1,997 per Month Rent Appreciation (once in 3 15% years) Gross Potential Revenues as 3,294.98 INR Million - - - 179.56 202.01 224.45 258.12 258.12 Lease Rent Gross Potential Revenues from 118.07 INR Million - - - 6.44 7.23 8.04 9.25 9.25 Car Parking Charges Interest on Deposits - Gross 8% 227.54 INR Million - - - 12.40 13.95 15.50 17.82 17.82 Potential Less: Revenue Loss due to Non- 5% 182.03 INR Million - - - 9.92 11.16 12.40 14.26 14.26 Occupancy Total Net Revenue Receipts 3,458.55 INR Million - - - 188.48 212.03 235.59 270.93 270.93 Expenditure Sales Costs and Overheads 2% 69.17 INR Million - - - 3.77 4.24 4.71 5.42 5.42 Mall Management Charges 3% 103.76 INR Million - - - 5.65 6.36 7.07 8.13 8.13

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Property Tax 5% 50.32 INR Million 3.16 3.32 3.49 3.66 3.84 Insurance Premium 5% 26.25 INR Million 1.65 1.73 1.82 1.91 2.00 Total Revenue Expenditure 249.50 INR Million - - - 14.23 15.65 17.08 19.12 19.39 Gross Operating Profit (EBIDT 3,209.05 INR Million - - - 174.25 196.37 218.51 251.82 251.54 Basis) Add: Terminal Cash Flow 2,768.05 INR Million ------Depreciation 4.88% 643.57 INR Million - - - 53.63 53.63 53.63 53.63 53.63

Table 9.13: Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Retail Mall and Multiplex Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Capital Account Construction Phasing 0% 0% 0% 0% 0% 0% 0% Capital Expenditure Land Development Cost 36 11.37 INR Million ------Sanction Fees and Cost of 35 11.07 INR Million ------Approvals Deposits Payable to Civic 74 23.47 INR Million ------Authorities Cost of Construction - Retail Mall 2,175 INR per sq. 3,737 3,999 4,279 4,578 4,899 5,241 5,608 & Multiplex Space (excl. Car ft. Parking) Cost of Construction - Parking 750 INR per sq. 1,289 1,379 1,475 1,579 1,689 1,807 1,934 ft. Escalation in Construction Cost 7% Total Construction Cost 916.17 INR Million ------(including Parking)

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Preliminary and Preoperative 15% 137.43 INR Million ------Costs (Percentage of Construction Costs) Total Development Cost 3,478 1,099.50 INR Million ------Revenue Account Absorption Rate of Leasable 100% 100% 100% 100% 100% 100% 100% Area Leasable 336,614 sq. ft. 336,614 336,614 336,614 336,614 336,614 336,614 336,614 Area No. of 386 Nos. 386 386 386 386 386 386 386 CPUs Receipts Weighted Average Lease Rent 48.00 INR per sq. 63.90 73.49 73.49 73.49 84.51 84.51 84.51 ft. per month Car Parking Charges 1,500 INR per CPU 1,997 2,296 2,296 2,296 2,641 2,641 2,641 per Month Rent Appreciation (once in 3 15% years) Gross Potential Revenues as 3,294.98 INR Million 258.12 296.84 296.84 296.84 341.36 341.36 341.36 Lease Rent Gross Potential Revenues from 118.07 INR Million 9.25 10.64 10.64 10.64 12.23 12.23 12.23 Car Parking Charges Interest on Deposits - Gross 8% 227.54 INR Million 17.82 20.50 20.50 20.50 23.57 23.57 23.57 Potential Less: Revenue Loss due to Non- 5% 182.03 INR Million 14.26 16.40 16.40 16.40 18.86 18.86 18.86 Occupancy Total Net Revenue Receipts 3,458.55 INR Million 270.93 311.57 311.57 311.57 358.31 358.31 358.31

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Expenditure Sales Costs and Overheads 2% 69.17 INR Million 5.42 6.23 6.23 6.23 7.17 7.17 7.17 Mall Management Charges 3% 103.76 INR Million 8.13 9.35 9.35 9.35 10.75 10.75 10.75 Property Tax 5% 50.32 INR Million 4.03 4.24 4.45 4.67 4.90 5.15 5.41 Insurance Premium 5% 26.25 INR Million 2.10 2.21 2.32 2.44 2.56 2.69 2.82 Total Revenue Expenditure 249.50 INR Million 19.69 22.03 22.35 22.69 25.38 25.75 26.14 Gross Operating Profit (EBIDT 3,209.05 INR Million 251.25 289.55 289.23 288.89 332.93 332.56 332.17 Basis) Add: Terminal Cash Flow 2,768.05 INR Million ------2,768.05 Depreciation 4.88% 643.57 INR Million 53.63 53.63 53.63 53.63 53.63 53.63 53.63

9.6.3 BUSINESS PLAN FOR THE SHOWROOM AND OFFICE SPACE

Considering the overall development and revenue stabilization period, business plan is prepared for the 15 years period and factored exit valuation (terminal cash flow) at the end of 15 years period. The tables below present the business plan for the showroom and office space on EBIDT basis.

Table 9.14: Business Plan for the First Phase Proposed Development on the Project Site (Year 1 to Year 8) - Showroom and Office Space Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Capital Account Construction Phasing 20% 40% 40% 0% 0% 0% 0% 0%

Capital Expenditure Land Development Cost 36 8.06 INR Million 8.06 ------Sanction Fees and Cost of 35 7.85 INR Million 7.85 ------Approvals

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Deposits Payable to Civic 74 16.65 INR Million 16.65 ------Authorities Cost of Construction - Showroom 1,760 INR per sq. 1,760 1,883 2,015 2,156 2,307 2,468 2,641 2,826 & Office Space (excl. Car ft. Parking) Cost of Construction - Parking 750 INR per sq. 750 803 859 919 983 1,052 1,126 1,204 ft. Escalation in Construction Cost 7% Total Construction Cost 566.84 INR Million 104.39 223.40 239.04 - - - - - (including Parking) Preliminary and Preoperative 15% 85.03 INR Million 15.66 33.51 35.86 - - - - - Costs (Percentage of Construction Costs) Total Development Cost 3,052 684.43 INR Million 152.61 256.91 274.90 - - - - - Revenue Account Showroom Space Absorption Rate of Leasable 0% 0% 0% 80% 90% 100% 100% 100% Area Leasable 157,703 sq. ft. - - - 126,162 141,933 157,703 157,703 157,703 Area No. of 202 Nos. - - - 162 182 202 202 202 CPUs Receipts Weighted Average Lease Rent 43.00 INR per sq. 43.00 45.15 47.41 49.78 49.78 49.78 57.24 57.24 ft. per month Car Parking Charges 1,500 INR per CPU 1,500 1,575 1,654 1,736 1,736 1,736 1,997 1,997 per Month

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Rent Appreciation (once in 3 15% years) Gross Potential Revenues as 1,382.89 INR Million - - - 75.36 84.78 94.20 108.33 108.33 Lease Rent Gross Potential Revenues from 61.80 INR Million - - - 3.38 3.79 4.21 4.84 4.84 Car Parking Charges Interest on Deposits - Gross 8% 96.31 INR Million - - - 5.25 5.90 6.56 7.54 7.54 Potential Less: Revenue Loss due to Non- 5% 77.05 INR Million - - - 4.20 4.72 5.25 6.04 6.04 Occupancy Receipts - Showroom Space IINR Million - - - 79.79 89.75 99.72 114.68 114.68 Office Space Absorption Rate of Leasable 0% 0% 0% 50% 70% 90% 100% 100% Area Leasable 87,715 sq. ft. - - - 43,858 61,401 78,944 87,715 87,715 Area No. of 113 Nos. - - - 57 79 102 113 113 CPUs Receipts Weighted Average Lease Rent 42.00 INR per sq. 42.00 44.10 46.31 48.62 48.62 48.62 55.91 55.91 ft. per month Car Parking Charges 1,500 INR per CPU 1,500 1,575 1,654 1,736 1,736 1,736 1,997 1,997 per Month Rent Appreciation (once in 3 15% years) Gross Potential Revenues as 720.57 INR Million - - - 25.59 35.82 46.06 58.85 58.85 Lease Rent

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Particulars Inputs Total Unit Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Gross Potential Revenues from 33.17 INR Million - - - 1.19 1.65 2.13 2.71 2.71 Car Parking Charges Interest on Deposits - Gross 8% 50.25 INR Million - - - 1.79 2.50 3.21 4.10 4.10 Potential Less: Revenue Loss due to Non- 5% 40.20 INR Million - - - 1.43 2.00 2.57 3.28 3.28 Occupancy Receipts - Office Space IINR Million - - - 27.13 37.97 48.83 62.38 62.38 Total Net Revenue Receipts 2,227.75 INR Million - - - 106.92 127.72 148.55 177.06 177.06 Expenditure Sales Costs and Overheads 2% 44.55 INR Million - - - 2.14 2.55 2.97 3.54 3.54 Property Tax 5% 35.69 INR Million 2.24 2.35 2.47 2.60 2.73 Insurance Premium 5% 16.34 INR Million 1.03 1.08 1.13 1.19 1.25 Total Revenue Expenditure 96.59 INR Million - - - 5.41 5.99 6.57 7.33 7.51 Gross Operating Profit (EBIDT 2,131.16 INR Million - - - 101.51 121.74 141.97 169.74 169.55 Basis) Add: Terminal Cash Flow 2,035.38 INR Million ------Depreciation 4.51% 370.44 INR Million - - - 30.87 30.87 30.87 30.87 30.87

Table 9.15: Business Plan for the First Phase Proposed Development on the Project Site (Year 9 to Year 15) - Showroom and Office Space Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Capital Account Construction Phasing 0% 0% 0% 0% 0% 0% 0%

Capital Expenditure Land Development Cost 36 8.06 INR Million ------

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Sanction Fees and Cost of 35 7.85 INR Million ------Approvals Deposits Payable to Civic 74 16.65 INR Million ------Authorities Cost of Construction - Showroom 1,760 INR per sq. 3,024 3,236 3,462 3,705 3,964 4,241 4,538 & Office Space (excl. Car ft. Parking) Cost of Construction - Parking 750 INR per sq. 1,289 1,379 1,475 1,579 1,689 1,807 1,934 ft. Escalation in Construction Cost 7% Total Construction Cost 566.84 INR Million ------(including Parking) Preliminary and Preoperative 15% 85.03 INR Million ------Costs (Percentage of Construction Costs) Total Development Cost 3,052 684.43 INR Million ------Revenue Account Showroom Space Absorption Rate of Leasable 100% 100% 100% 100% 100% 100% 100% Area Leasable 157,703 sq. ft. 157,703 157,703 157,703 157,703 157,703 157,703 157,703 Area No. of 202 Nos. 202 202 202 202 202 202 202 CPUs Receipts Weighted Average Lease Rent 43.00 INR per sq. 57.24 65.83 65.83 65.83 75.71 75.71 75.71 ft. per month

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Car Parking Charges 1,500 INR per CPU 1,997 2,296 2,296 2,296 2,641 2,641 2,641 per Month Rent Appreciation (once in 3 15% years) Gross Potential Revenues as 1,382.89 INR Million 108.33 124.58 124.58 124.58 143.27 143.27 143.27 Lease Rent Gross Potential Revenues from 61.80 INR Million 4.84 5.57 5.57 5.57 6.40 6.40 6.40 Car Parking Charges Interest on Deposits - Gross 8% 96.31 INR Million 7.54 8.68 8.68 8.68 9.98 9.98 9.98 Potential Less: Revenue Loss due to Non- 5% 77.05 INR Million 6.04 6.94 6.94 6.94 7.98 7.98 7.98 Occupancy Receipts - Showroom Space IINR Million 114.68 131.88 131.88 131.88 151.67 151.67 151.67 Office Space Absorption Rate of Leasable 100% 100% 100% 100% 100% 100% 100% Area Leasable 87,715 sq. ft. 87,715 87,715 87,715 87,715 87,715 87,715 87,715 Area No. of 113 Nos. 113 113 113 113 113 113 113 CPUs Receipts Weighted Average Lease Rent 42.00 INR per sq. 55.91 64.30 64.30 64.30 73.95 73.95 73.95 ft. per month Car Parking Charges 1,500 INR per CPU 1,997 2,296 2,296 2,296 2,641 2,641 2,641 per Month Rent Appreciation (once in 3 15% years)

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Particulars Inputs Total Unit Y9 Y10 Y11 Y12 Y13 Y14 Y15 Gross Potential Revenues as 720.57 INR Million 58.85 67.68 67.68 67.68 77.83 77.83 77.83 Lease Rent Gross Potential Revenues from 33.17 INR Million 2.71 3.11 3.11 3.11 3.58 3.58 3.58 Car Parking Charges Interest on Deposits - Gross 8% 50.25 INR Million 4.10 4.72 4.72 4.72 5.43 5.43 5.43 Potential Less: Revenue Loss due to Non- 5% 40.20 INR Million 3.28 3.78 3.78 3.78 4.34 4.34 4.34 Occupancy Receipts - Office Space IINR Million 62.38 71.74 71.74 71.74 82.50 82.50 82.50 Total Net Revenue Receipts 2,227.75 INR Million 177.06 203.62 203.62 203.62 234.17 234.17 234.17 Expenditure Sales Costs and Overheads 2% 44.55 INR Million 3.54 4.07 4.07 4.07 4.68 4.68 4.68 Property Tax 5% 35.69 INR Million 2.86 3.00 3.16 3.31 3.48 3.65 3.83 Insurance Premium 5% 16.34 INR Million 1.31 1.38 1.44 1.52 1.59 1.67 1.76 Total Revenue Expenditure 96.59 INR Million 7.71 8.45 8.67 8.90 9.75 10.01 10.27 Gross Operating Profit (EBIDT 2,131.16 INR Million 169.35 195.17 194.95 194.72 224.41 224.16 223.89 Basis) Add: Terminal Cash Flow 2,035.38 INR Million ------2,035.38 Depreciation 4.51% 370.44 INR Million 30.87 30.87 30.87 30.87 30.87 30.87 30.87

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9.7 FINANCIAL INDICATORS FOR THE PROPOSED DEVELOPMENT

The table below summarizes key financial indicators for the First Phase of the proposed development on the Project Site.

Table 9.16: Key Financial Indicators for the First Phase Proposed Development on the Project Site Particulars Unit Financial Indicator Project Internal Rate of Return (IRR) - EBIDT Percent 17.67% Equity IRR - Post Tax Percent 18.49% Minimum Interest Service Ratio Ratio 1.95 Average Interest Service Ratio Ratio 12.19 Minimum Debt Service Ratio Ratio 1.91 Average Debt Service Ratio Ratio 2.54 Minimum Debt Service Coverage Ratio Ratio 1.50 Average Debt Service Coverage Ratio Ratio 1.86 Estimated Development Cost INR Million 1,783.93 Estimated Project Cost (incl. Land Cost and IDC) INR Million 2,230.96

Based on the above table, it may be concluded that the upcoming First Phase development on the Project Site with built-up area of approximately 540,366 sq. ft. comprising retail mall & multiplex, showroom space and office space, proposed to be executed over next 3 years timeframe, has favorable financial feasibility indicators with project internal rate of return (IRR) of about 18%, which is within the range of 18-20% as expected in the market.

Further, the project also demonstrates favorable bankability indicators indicating healthy cash flows and loan repayment potential. Average debt service coverage ratio works out 1.86, which is higher than 1.50 as desired by financial institutions. Minimum debt service coverage ratio during the debt repayment period is 1.50, which is also higher than 1.30 as desired by financial institutions.

Based on the above, it may be concluded that the proposed First Phase development on the Project Site with built-up area of approximately 540,366 sq. ft. comprising retail mall & multiplex, showroom space and office space, proposed to be executed over next 3 years timeframe, is feasible both from the market and financial feasibility perspective. Further, the cash flows demonstrate favorable bankability indicators, indicating healthy cash flows and loan repayment.

9.8 SENSITIVITY / RISK ANALYSIS

A sensitivity analysis has been carried out for the proposed development under the First Phase development on the Project Site assuming the following six scenarios:

Downside Scenario

. Scenario 1: 10 percent increase in capital cost over the base case scenario; . Scenario 2: 10 percent decrease in revenues over the base case scenario; and . Scenario 3: 10 percent increase in capital cost and 10 percent decrease in revenues, over the base case scenario

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Upside Scenario

. Scenario 4: 10 percent decrease in capital cost over the base case scenario; . Scenario 5: 10 percent increase in revenues over the base case scenario; and . Scenario 6: 10 percent decrease in capital cost and 10 percent increase in revenues, over the base case scenario

The table in the following page presents and summarizes the behavior of the project cost and performance of key financial & bankability indicators for the proposed development under each of the above sensitivity scenarios.

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Table 9.17: Sensitivity Analysis - Behavior of the Project Cost and Performance of the Key Financial & Bankability Indicators for the Proposed First Phase Development on the Project Site Sl. Particulars Behavior of the Project Cost and Performance of Key Financial Indicators for Sensitivity Scenarios No. (Base Case) Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6( (10% Increase in (10% Decrease in (Combination of (10% Decrease in (10% Increase in Combination of Capital Cost) Revenue) Scenario 1 & 2) Capital Cost) Revenue) Scenario 4 & 5) 1. Project Internal Rate of Return 17.67% 16.84% 16.20% 15.39% 18.58% 19.06% 19.99% (IRR) - EBIDT 2. Equity IRR - Post Tax 18.49% 17.17% 16.76% 15.49% 20.01% 20.14% 21.72% 3. Minimum Interest Service Ratio 1.95 1.95 1.75 1.75 1.96 2.16 2.16 4. Average Interest Service Ratio 12.19 12.18 9.05 9.02 12.21 14.34 14.36 5. Minimum Debt Service Ratio 1.91 1.90 1.73 1.73 1.91 2.07 2.07 6. Average Debt Service Ratio 2.54 2.54 2.59 2.60 2.54 2.73 2.73 7. Minimum Debt Service 1.50 1.50 1.50 1.50 1.50 1.50 1.50 Coverage Ratio 8. Average Debt Service Coverage 1.86 1.86 1.60 1.60 1.87 2.10 2.10 Ratio 9. Estimated Development Cost 1,783.93 1,919.09 1,783.93 1,919.09 1,648.77 1,783.93 1,648.77 10. Estimated Project Cost (incl. 2,230.96 2,366.12 2,230.96 2,366.12 2,095.80 2,230.96 2,095.80 Land Cost and IDC)

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Based on the above table, it may be noted that the proposed first phase of development on the Project Site with built-up area of approximately 540,366 sq. ft. comprising retail mall & multiplex, showroom space and office space, proposed to be executed over next 3 years timeframe, indicates higher sensitivity towards change in revenue assumptions. The base rate indicators are marginally higher than the accepted market norms and therefore the downside scenarios show non-favorable indicators. As the project shows higher sensitivity towards revenue assumptions, it is important to maintain and increase the revenue realization from that of the base case scenario.

The project demonstrates favorable bankability indicators indicating healthy cash flows and loan repayment. Under the worst case scenario, average debt service coverage ratio works out to 1.60, which is higher than 1.50 as desired by financial institutions. Minimum debt service coverage ratio during the debt repayment period is 1.50, which is also higher than 1.30 as desired by financial institutions.

Therefore, based on the above sensitivity analysis, it is evident that the proposed development is sensitive to both increase in cost and decrease in revenue. Thus, it is of paramount importance to administer strict cost control management measures during the execution of the project. Further, as the sensitivity is higher towards the revenue assumptions, aggressive marketing is very essential to ensure similar or higher pricing recommended in this report is achieved during the disposal/ operation. A close watch and control of costing and pricing is of critical importance in ensuring financial feasibility of the project.

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10 ANNEXURE

10.1 DESCRIPTION OF SOCIO ECONOMIC CLASSIFICATION

Socio Economic Classification (SEC) is widely used classification under market researchers world- wide to describe the quality of the population. This classification of Indian consumers is on two parameters, namely occupation and education of the chief wage earner (head) of the households. The classification criteria were formulated in 1988 and were subsequently ratified by Market Research Society of India (MRSI). This classification is used widely by media researchers and brand managers to understand the Indian consuming class. The table below presents the Socio- Economic Classification Matrix for ready reference.

EDUCATION OCCUPATION Illiterat Literate School up SSC/ Some Graduate/ Graduate/ e but not to 9 Years HSC College but Postgraduate Post Formal Not - General Graduate- School Graduate Profession Unskilled Workers E2 E2 E1 D D D D Skilled Workers E2 E1 D C C B2 B2 Petty Workers E2 D D C C B2 B2 Shop Owners D D C B2 B1 A2 A2 Self-Employed Prof. D D D B2 B1 A2 A1 Clerical /Salesmen D D D C B2 B1 B1 Supervisory Level D D C C B2 B1 A2 Officers/ Executive-Junior C C C B2 B1 A2 A2 Officers/Executive-Middle/Senior B1 B1 B1 B1 A2 A1 A1 Businessmen/ Industrialists with No. of Employees: Less than 3 D C B2 B1 A2 A2 A1 4 to 10 C B2 B2 B1 A2 A2 A1 More than 10 B1 B1 A2 A2 A1 A1 A1

Various SEC classifications are described below:

. SEC A (Urban): Shop owners/ farmers/ wholesalers/ traders/ self employed professionals/ junior executives/ officers who have a graduate degree or above, businessmen/ industrialists with less than 10 employees and have been to college, businessmen/industrialists with 10 or more employees and have greater than four years of schooling, all middle/senior officers and executives who have been to college in urban areas

. SEC B (Urban): Shop owners/ farmers/ wholesale traders/ self employed professionals/ officers/ junior executives who have spent some time in college but are not graduates, clerks and salesmen who are graduate and above, supervisors who are graduate and general post graduates, businessmen/industrialists with 9 or less employees and have completed schooling, businessmen/ industrialists with 10 or more employees but up to 9 years of schooling, all middle/senior officers and executives who have not been to college, skilled workers and petty traders with graduate or higher degree, Shop owners who have completed schooling, businessmen with 5 to 9 years of schooling, businessmen with up to 9 years of schooling, self employed professionals, officers and junior executives who have completed schooling,

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supervisors/ clerks/ salesmen who have spent some time in college but are not graduates in urban areas

. SEC C (Urban): Skilled workers and petty traders with greater than 9 years of schooling but not graduates, shop owners/ farmers/ wholesalers/ traders with 5 to 9 years of schooling, illiterate businessmen with 1 to 9 employees, businessmen with no employees but up to 4 years of schooling, clerks and salesmen who have completed schooling, supervisors with greater than five years of schooling but not college, officers and junior executives with up to 9 years of schooling in urban areas

. SEC D (Urban): Unskilled workers with greater than 9 years of schooling, skilled workers with 5 to 9 years of schooling, literate petty traders with up to 9 years of schooling, shop owners/farmers or wholesale traders with up to 4 years of schooling, self employed with no employees, self employed with up to 9 years of schooling, Clerks and salesmen with up to 9 years of schooling, Supervisors with up to 4 years of schooling in urban areas

. SEC E (Urban): Unskilled workers with 5 to 9 years of schooling, skilled workers with up to 4 years of schooling, unskilled workers with up to 4 years of schooling, illiterate skilled workers, illiterate petty traders in urban areas

Development Advisory Services for Proposed Mixed-Use Development Project on Final Report 11.3 Acres Land Parcel Located in Thrissur, Kerala, India - 139 -

10.2 PERCEPTION ANALYSIS FROM PROMINENT RETAILERS IN THRISSUR AND KOCHI

Retail Brand/ Category Key Perceptions and Preferences Reliance Trend . Footfalls & Conversions: The average footfalls vary from 200-300 during weekdays with conversion of about 50% and 200-400 during the weekends with conversion rate of 80%. Both footfalls and conversions are significantly high during festival season. . Shoppers: Shoppers are basically from Thrissur (major percentage) followed by adjoining urban centers like Chavakkad, , Vadakkencherry, Irinjalakuda , Chalakuddy, Kunnamkulam and partly from Pollachi. . Age of Shoppers: The active shoppers in Thrissur are basically those between 25 to 50 years of age and these are primarily the working class population. . Expansion Plan: Looking for expansion or shifting to new premises with better facilities in the city with space of about 10,000-15,000 sq. ft. . Willingness to Relocate to Mall: Indicated willingness to relocate to a mall with rental ranging from INR 40-45 per sq. ft. per month . Preference for Facilities and Amenities: Require ample parking facilities and facility should have good ambience. . Rating of Location of the Project Site for Mall: Excellent location, as shoppers catchment is from Punkunnam, Ayyanthole & Chembukkav. Puma, Woodlands, . Footfalls & Conversions: The average footfalls vary from 30-40 during weekdays with conversion of about 75% and 30-60 during the weekends with Arrow, Lee, United conversion rate of 40%. Both footfalls and conversions are significantly high during festival season. Colour of Benetton & . Shoppers: Shoppers are basically from Thrissur. However, during the festive seasons and holidays, shoppers are coming from adjoining urban Van Heusen centers like Chavakkad, Shoranur, and Chalakuddy. . Age of Shoppers: The active shoppers in Thrissur are basically from 16-25 years of age and these are primarily students. . Expansion Plan: Looking for expansion or shifting to new premises with better facilities in the city with space of about 1,200-2,000 sq. ft. . Willingness to Relocate to Mall: Indicated willingness to relocate to a mall with rental ranging from INR 75-100 per sq. ft. per month . Preference for Facilities and Amenities: Require ample parking facilities. Prefer locating in the ground floor, close to atrium with good frontage. . Rating of Location of the Project Site for Mall: Excellent location, as the catchment has good residing population. Kalyan Silk . Footfalls & Conversions: The average footfalls vary from 500-600 during weekdays with conversion of about 75% and 500-750 during the weekends with conversion rate of 85%. Both footfalls and conversions are significantly high during festival season. . Shoppers: Shoppers are basically from Thrissur (major percentage) followed by adjoining urban centers like Chavakkad, Shoranur, Chalakuddy and Kunnamkulam etc. with high disposable income. . Age of Shoppers: The active shoppers in Thrissur are basically those between 25 to 50 years of age and these are primarily the working class population and also NRIs (NRKs). . Expansion Plan: Looking for expansion or shifting to new premises with better facilities in the city with space of about 15,000 sq. ft. . Willingness to Relocate to Mall: Indicated willingness to relocate to a mall with competitive rentals (not specifically indicated rental range). However, indicated larger preference for standalone complex.

Development Advisory Services for Proposed Mixed-Use Development Project on Final Report 11.3 Acres Land Parcel Located in Thrissur, Kerala, India - 140 -

Retail Brand/ Category Key Perceptions and Preferences . Preference for Facilities and Amenities: Require ample parking facilities and facility should have good ambience. Other preferences include lifts, road frontage, and location close to food court. . Rating of Location of the Project Site for Mall: Excellent location, as located away from city traffic congestion and also good residential catchment with disposable income. Shoppers . Retail Format: Due to non-availability of malls in the city, shopping centers and high streets are the most preferred destination. . Preference for Shopping: Prefer to shop for Food & Groceries at the supermarkets and the frequency is almost 4-5 times a month. Jewellery, watches, Body & Healthcare products, Furniture & Electronics Goods are usually purchased from the high streets. Gifts, Music, Footwear, F&B and Fine Dining are usually from the shopping centers. . Expectations: Expect variety of product within one roof. . Rating of Existing Shopping Centers: Rated City Center and Big Bazaar as preferred retail outlets for shopping as both encompasses variety of products and witness huge crowd across all times. However, majority brands are local and non-reliable - requires branded national and international brands. . Rating of Location: Good location as located away from city traffic congestion. Excellent road network and regional connectivity. . Feature within Mall: Food Court & Fine Dining Restaurants, adequate parking facility, Multiplex, Children’s Play Area, Game Centre, Fitness Centre, ambience and good circulation. Officials, . Retail Format in Thrissur: Very limited retail options available for a mall format in Thrissur CBD. However, corridors like High Road connecting Kochi Gold Souk Grande and Thrissur, and Kuttippuram Road can be a good location for mall format. Existing retail development like, Big Bazaar, City Center and Center Officials & Retailers Point are catering to middle income segment and student population. Majority of the retail format in Thrissur are in the form of Standalone complex and they prefer the same. A mall development in Thrissur will change the entire scenario in terms of Format, Size & Scale and also Brands. Existing larger format apparel brands like Kalyan Silks can be a part of Mall instead of being in a standalone format. . Shoppers from Thrissur visiting Kochi: Larger percentage of shoppers from Thrissur with high disposable income visit Kochi during the weekends and the same is very high during festival and marriage seasons. . Mall / Retail Positioning: There are few options available with respect to diamond jewellery. Very few urban centers like Trivandrum, Kochi, Kozhikode has outlets of the same. However since Thrissur is prominent for Diamond Cutting and Polishing, the same can be considered while positioning the brands. It also been witnessed the adjoining district, namely the Coimbatore from Tamil Nadu state, the upper middle income segment prefer diamond rather than gold. . Critical Success Factors for Mall Development: Features like signing of large format in the initial stage is a critical factor for all organized malls. With respect to the same, the under construction Sobha City Mall will be fronting a challenging task. Also witnessed, that few of the formats were been sold out to the investors, make it further more critical in terms of mall management. It’s advisable to place the large format shops in the upper floors and the F&B close to Multiplex. Familiar brands from middle-east can be incorporated while positioning the branding.

Development Advisory Services for Proposed Mixed-Use Development Project on Final Report 11.3 Acres Land Parcel Located in Thrissur, Kerala, India - 141 -

10.3 PERCEPTION ANALYSIS FROM OCCUPIERS SURVEY IN KOCHI AND BANGALORE

Category of Key Perceptions and Preferences Occupiers Survey conducted . Very satisfied by being located in Bangalore- the IT hub of India from IT/ITES occupiers . Less willingness to expand in Tier II cities which is restricted to Kochi in in Bangalore Kerala . Thrissur not considered as a preferable location for IT/ITES development and considered as a Tier III city in terms of Real estate and IT penetration . Very low visibility of Thrissur among the IT/ITES occupiers . Reasons provided for not expanding to Tier II or Tier III cities are- . High cost of establishments . Similar real estate costs as in periphery of a Tier I city like Bangalore . Less availability of graded office buildings . Due to lack of opportunities, there is high rate of migration to Tier I cites among the potential workforce Survey conducted . Most of the occupiers are satisfied with the presence in Kochi and have very from IT/ITES and other less preference for further expansion in Tier III cities in Kerala occupiers in Kochi . Most preferred locations in Kerala for IT/ITES are Kochi followed by Trivandrum . Availability of excellent air connectivity to Kochi and Trivandrum and provision of good infrastructure facilities mainly promoted by the government are the major drivers for establishment of the units in these cities. . There is high availability of graded office space in Kochi and therefore no preference to move to a Tier III city. . As there would not be any cheaper rates offered in Thrissur as compared with Kochi, there is almost negligible preference to start fresh operations in a new market

10.4 BROAD TENANT MIX FOR THE PROPOSED MALL

Based on the surveys of the retailers and their preferences, a broad tenant mix has been prepared for the proposed retail mall development on the project site. The tenant mix has been worked out on the following parameters-

. Retailers’ preference as illustrated in the Table 8.6 above . Positioning categories complementary to each other in close proximity like apparel and accessories to create impulsive buying . Placing high value and high in demand categories easily accessible and on lower floors of the mall . Placing categories with lower footfalls and focused sales like electronics and health and beauty on higher floors while categories with higher footfalls and which can induce impulse buying on the lower floors like apparel, accessories, F&B etc.