Foreign cos to form 40% of retail investors in India

FOREIGN retailers like Wal-Mart, Metro, Carrefour and Tesco would account for 40% of the estimated $30 billion investment in organized retail over the next 4-5 years. The top seven players including Reliance, Bharti-Wal-Mart, Aditya Birla Group and the Future Group would account for about 70% of the investment.
According to the ICICI Property Services- Technopak Advisors white paper released on Saturday, of the $30 billion investment, about 94% is slated for the urban markets. Though the investments being planned are expected to be across the spectrum of all types of cities, more than 60% would flow in the top 25 cities in the country. While urban investments are slated to be across all formats, a majority share will be taken by supermarkets and hypermarkets, according to the white paper.
Food and grocery is expected to attract the maximum investment in retail categories in the formats hypermarkets, cash-and-carry and supermarkets. Apparel would be served mainly by specialty stores and hypermarkets. The real estate at high streets will play a major role for this category as these have traditionally been the apparel markets in the urban areas.
Furniture and consumer durables, which are destination categories, being high value items and bought at larger intervals, will drive the need for specialty real estate developments, says the white paper.
The white paper also pointed out that organised retailers are headed for a shortage of mall space. Real estate developers in the country have planned only for about 143 million sq ft of mall space over the next five years, against the retail requirement of about 250 million sq ft, causing a space shortage of about 40%, says the white paper.
The total real estate required by the retail chains in India will be in the range of 500 million sq ft, of which shopping malls alone would occupy 250 million sq ft. There are currently 137 operational malls in the country.
The organized retail sector has grown from 0.9 million sq ft in 1999 to 28 million today. The growth so far has been at an annual rate of 75% for the last six years and is expected to grow at least 50% for the next 4-5 years, the white paper says.
courtesy:economictimes
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