| Retail space, particularly the Mall space, is expected to fall short by 40 per cent in the next five years according to a study done by ICICI Property Services and Technopak- a retail consultancy, reports indiaretailbiz.com.
Against the projected requirement of Mall space of 250 million square feet during this period, the availability based on the projects under execution and planned for construction, only 143 million square feet (about 60%) of space may be available, concludes the study. This will lead to a severe space crunch, which may prove to be a major hurdle in the pace of the retail industry's growth.
According to an earlier research report of international property consultants, Knight & Frank, 361 new Malls with 117 million square feet of space are currently under construction in 7 Metro and 50 Tier II & III cities across the country. Approximately, 65 per cent of this space is being constructed in the top seven cities. These are expected to be completed by 2008.
Retail chains, which are expected to grow exponentially, to maintain their growth momentum, according to the report, however, will require an overall quality retail space of around 500 million square feet. Organised retail turnover currently estimated at around $10 billion, is expected to reach around $200 billion in 10 years, according to Technopak. This sector is estimated to attract investment of around $30 billion within the next 4-5 years.
Until now, the shopping mall owners, like property developers, have sold the properties to investors who in turn have leased the same to the retailers. This has resulted in the emergence of unplanned and uncontrolled development of malls, which may lead to eventual loss of rental values. One of the key recommendations made to the retail sector by the study has, therefore, been to introduce the mall management. Mall owners and developers should consider the importance of controlling and managing their malls in order to maximise the value on their investments, says the report.
" India is getting into an interesting phase as far as retail and real estate is concerned and we will continue to see more world class shopping ambience being created by developers. Builders backed by global funds and skill sets are now equipped to look at long term perspective and hence create centers, which can be benchmarked against the very best in the world and take Indian real estate sector in to the next orbit," said V Vaidyanathan, executive director of ICICI Bank.
Source: www.indiaretailbiz.com
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