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Indian Retail Sector





Retail Space: Prospects and Perspectives
The emergence of modern retail formats would lead to the development of appropriate retail space in India. This may be the reason that the very first retail formats were started by the organizations
which were already into real estate, such as Raheja's Shoppers' Stop and Piramals' Piramyd Retail. Also in the last few years, real estate in this sector has seen positive changes in terms of high rents, property development and financing cost. The real estate developers have been busy in hiring international mall architects and consultants. The major players are developing strong ties with retailers and brands. Due to the boom in the industry, the trend of pre-booking of retail space has started.
It is also expected that this would lead to increase in joint ventures between Indian and International retailers. This also means that there would be a significant change in warehousing and quality of malls and shopping centers.
Most of the malls in the pipeline will be made in metro cities and Tier II cities. Leased properties or a mix of leased space and owned space are generally preferred in this sector. Also, fragmentation of the industry and stringent laws might lead to retail space troubles.

Concentration of the Retail Activity

Cities

Retail space (mn. sq.ft)

Percentage

Mumbai

6.6

31%

NCR ( Delhi )

6.5

30%

Banglore

1.3

6%

Pune

1.5

7%

Hyderabad

0.7

3%

Chennai

1.4

6%

Kolkata

0.7

3%

Others

3.2

15%





As the organizations plan to expand their operations, the demand for retail space would increase. The more the number of entrants, the more will be the competition. The bulk of the malls are being launched in the metro cities, owing to better civic amenities, infrastructure, higher disposable incomes, propensity to spend, etc.