|
What in a few years will be India's largest shopping
mall today is a kilometer-long, three-storey deep hole in the earth marked
with a billboard the size of a tennis court. It will have 4.5 m sq. feet
of retail space with 9000 parking spots.
"There is a paradigm shift in Indian retail,"
says Rajeev Talwar, group E.D. of DLF, the biggest Indian real estate
company and also developers of this mall, "India's growing prosperity,
the large population of under 25-year-olds who have grown up in an economy
that is booming, means that lifestyles and shopping habits are shifting
in favour of malls."
A country of 1.1 bn people, India had just six malls
covering 1m sq ft of space in 2002, according to Jones Lang LaSalle Meghraj,
a property consultancy. By the beginning of 2007 that had risen to 90
malls covering 19m sq ft. It is expected to rise threefold next year.
Driving the growth is a rapid rise in middle-class ¬salaries
and the emergence of a high-income class, with 1.6m households earning
more than $100,000 a year. Besides, there has been an exponential increase
in consumer credit.
The growth of organised retail is also accelerating the
mall boom. The tiny corporate share of India's $300bn-plus retail business
is likely to increase to about a fifth of the market within five years,
according to estimates from Technopak, a research and consultancy firm.
Analysts caution, however, that plenty of hype is accompanying
the boom. In a recent report, Jones Lang warned that "over 90 per
cent of the current and planned shopping mall stock falls below international
quality in terms of specification and design".
The infrastructure surrounding malls is also a problem
– many can only be reached via pot-holed roads through slums.
Government restrictions on the entry of foreign retailers
means the developers may find it hard to populate their malls. The world's
biggest retailers also carry some baggage after bad experiences in other
emerging markets.
Full Report: http://www.ft.com/
|