Bob Popat is a very proud man. Walking through his East Shopping Centre in Newham, E7, he talks excitedly about the development, which opened in March, the tenant mix and how successfully retailers are already trading.
“This unit,” Popat says, pointing right to Asian Bridal, “these guys have a 57-acre site where they do weddings and charge up to £70,000 for an event. Some weekends they are selling up to 40 bridal outfits that range between £1,500 to £6,000. ”
Weddings are extravagant affairs in Asian culture and East Shopping Centre has the top Asian wedding boutique names – some of which have opened their first store in the UK.
As a result occupiers are attracting customers from not just the UK, but internationally. “Shoppers come from Holland, France, the whole of England, Manchester, Birmingham, and Leicester. We get people from Scotland, Wales. On bank holidays and the half terms, they come in coach-loads,” says Popat.
What makes the 55,000 sq ft centre different from the UK’s other 640 shopping centres, is that it was built and occupied by retailers specifically targeting South East Asian shoppers.
The mall sits in the heart of Green Street – Europe’s second busiest Asian retail area outside of Southall in west London, that caters for high-end and value shoppers.
And Popat has no doubt how special his centre is. “It’s totally unique in the sense that Oriental City (at Colindale, London, but now closed) was for the Chinese market.”
It was last year that the British Indian co-director of the London-based property developers behind the £18m project, ACR Investments, saw the opportunity to convert a disused bus garage that had lain empty for 60 years. So enamoured was Popat with the building that he bought the property within five days of viewing it.
“It was love at first sight,” he says. “Within half an hour I’d made my mind up. I actually saw this site 10 years ago. It was on the market then for between £15m and £20m. But, because of the recession and the planning having expired, I paid £3.8m for it.”
Given how long the building was empty Newham Council was particularly helpful to Popat, whose company builds mixed-use residential blocks with ground-level retail around north
London.
“There had been two or three unsuccessful attempts to develop retail here, probably because they were trying to be a bit too clever,” says the centre’s architect Philip Wren, adding that previous planning applications were for a two-level shopping centre, or a full-level basement .
“One of the problems is the measurements of the site are relatively narrow for its depth,” says Wren. “It’s 250 metres front to back and 28 metres wide. Whether it was Bob’s genius or serendipity that he bought it, it’s actually perfect for this market.
“The measurement of the units work really well because these shopkeepers don’t necessarily want a Westfield-type unit. They don’t need all that.”
Popat adds: “What they do want is lots of window display capacity.”
Such was the competition for space in the mall that Popat says he had almost 2,500 enquiries for the 35 two-storey shops, and the 17 units in a Souk-style market area at the back of the linear building. There is a six-unit food court on a first floor mezzanine. “We were 100% let before we opened and we’ve got a waiting list of 85 retailers. We didn’t give them any incentives and they pay premiums,” he says.
Lease lengths range from four to 20 years with breaks, while rent is from £40 to £60 per sq ft, with added service charge.
Popat says his rental charges are deliberately about 25% lower than those paid by occupiers on Green Street. “We’re cheaper to bring in the retailers. You see, Green Street has been a monopoly for 25 years. Retail units are owned or run by only about a dozen families made up of cousins and uncles. When we were building this centre, we had a lot of scaremongering, a lot of rumours being spread about taking business away from the street. So we gave the incentive and we’ve still got a rental of circa £2m.”
Given the unique target audience, Popat admits it was hard work to convince banks to fund the venture.
“We actually put a lot of our own funds in and we refinanced around March. Getting funding initially was virtually impossible and we had to give a substantial amount of collateral because it was a speculative first – an Asian shopping centre.”
He adds: “When banks don’t understand something they don’t want to lend. And we had just come out of the recession, hadn’t we? So we went to bridging companies and we paid quite heavy rates, but we raised the funds. Then we refinanced with Santander. The first time they came it blew them away. They brought their head of committee the second time and they said how much do you want? It’s the quickest finance I’ve done in 30 years.”
Normally the centre averages between 25,000 – 30,000 shoppers a week, but on EG’s visit it was quiet due to Ramadan. When the month-long Muslim festival was over (Eid this year fell on 17 July) Popat says sales at the centre would quadruple.
“The seven days before Eid are so busy because it’s the equivalent of the seven days before Christmas in the West End.”
Popat firmly believes his mall will set a precedent within the Asian retail market. “We’ve already been approached by people in Birmingham, a lot of people from Leicester who’ve come here and said why can’t you open one there? It’s finding the location. It’s the old adage, isn’t it, location, location, location. This area is prime for the Asian market.”
What the occupiers think
Bollywood is big business. Not only is it one of the world’s largest film industries – last year it churned out 201 films – but its actors are equally revered by the paying public who last year bought 2.6bn tickets compared to Hollywood’s 1.4bn.
Two designers who dress those stars are Anjalee and Arjun Kapoor (pictured above). The couple sell couture bridal gowns costing up to £60,000. Their East store is their first in the UK and their European flagship.
Afia Khatun is the Kapoor’s UK-based partner. She says: “I felt there was a huge gap in the market for good quality fashion for young Asians, so I met Bob [Popat], and saw what East was going to look like.
“In November last year I decided that I was going to go into the venture. So in February I went to India, and then I decided to do a standalone partnership with Anjalee and Arjun and this is where we are now.”
Khatun is adamant she would only have opened in the shopping centre, and not on Green Street itself. “The high street itself is not where a designer of couture should be based.
“A lot of people have told me I should be in the West End and not in Green Street, but I completely disagree because the market is the Asian market. We cater for the Western market as well, but it needs to be in the Asian hub. And when you walk into this shopping centre it’s amazing.”
Highlighting the shop’s success, she adds: “I’ve got clients coming in from Leicester, Leeds, Norwich and Norway, the US and Dubai. They’ve walked in because of Anjalee and Arjun Kapoor. And they know that Green Street is where we all go for Asian bridal shopping.”
noella.pio.kivlehan@estatesgazette.com
