Last checked at 
* Many malls of poor design or inefficiently managed
* Global retailers such as Gap, H&M planning big push intoIndia
* Alternatives like online services become more atttractive
By Aditi Shah and Nivedita Bhattacharjee
NEW DELHI/MUMBAI, Feb 24 (Reuters) - A severe shortage ofattractive malls has made setting up shop in India easier saidthan done, crimping expansion plans for both foreign retailerssuch as Lacoste and domestic giants like department store chainShoppers Stop.
India's searing heat, heavy traffic and cluttered pavementsmake malls the most popular option for urban middle classconsumers looking for a day out. But many centres - despitehaving been built in the last decade - are struggling to drawshoppers or retailers because of poor design or because they aredifficult to manage.
P.S. Puri, CEO of MGF Mall Management, which runs MGFMetropolitan, knows this all too well. Located in a poshdistrict in the south of New Delhi, security guards and salesstaff outnumbered shoppers last Tuesday evening in what was oncea bustling mall.
It has restaurants but lacks popular attractions like a foodcourt and a cinema. The sale of shop ownership piecemeal hasmade management difficult and now only one quarter of the spaceis occupied by fashion retailers - about the same amount that isvacant.
"There is very little we can do because the shops are soldand the owners bring in whomever they want. They lease it to aliquor shop because they get slightly higher rents but then noother retailer wants to be next to a liquor store," said Puri.
Recently built malls where shops are leased, not sold, arefaring better but there are not yet enough of them to meet aforecast rapid increase in demand as the economy improves.
"There are very few projects coming up in the next one ortwo years where we can open a store," said Rajesh Jain, CEO atFrench sportswear maker Lacoste' India division. "This is reallyrestricting our expansion for sure."
FIRST FORAYS
Revenue from organised bricks-and-mortar retail in India isexpected to more than triple to $150 billion by 2020, accordingto consulting firm Technopak - spurred by a raft of foreignretailers planning their first foray into the market, heating upcompetition for mall space.
In the past six months, Gap Inc has said it plans 40stores, The Children's Place is looking at 50 while Hennes & Mauritz (H&M) has plans for an initial 50shops. Established brands are also expanding, with Marks &Spencer aiming to lift its store numbers to 80 from 45by 2016/17.
But India has only 77.6 million square feet of mall space,less than one tenth of U.S. levels, despite having nearly fourtimes the population, with the shortage of attractive malls mostacute in New Delhi and Mumbai.
One in every six stores is empty, according to propertyconsultants Jones Lang LaSalle, while advisory and managementfirm Beyond Squarefeet estimates that up to 25 malls have beenshut or converted to other uses in the past two years. That doesnot include two of Mumbai's oldest suburban malls, Centre Oneand Nirmal Lifestyle, which have said they are shutting down asshoppers stayed away.
Many centres, especially those that went up during the2006-2007 real estate boom, were built by developers with littlemall building experience. Ownership of shops was often sold offpiecemeal while many do not have sufficient parking for shoppersor areas for retailers to bring in their supplies.
"Many of the malls that grew up did not even think of thesethings," said Kumar Rajagopalan, CEO of the Retailers'Association of India.
Until new and better malls are built, some retailers arelooking at alternatives such as leasing standalone shops thatcan often be less lucrative or investing big in fast-growing butnascent online services.
"We...have to look at online spaces in a bigger way muchearlier than before, because there is definitely a big shortage(of physical retail space)," said Govind Shrikhande, managingdirector at Shoppers Stop. (Additional reporting by Sumeet Chatterjee in Mumbai; Editingby Clara Ferreira Marques and Edwina Gibbs)
