HYDERABAD: Close to 9,00,000 square meters of retail space in the form of malls and other shopping centre formats will hit cities like Hyderabad, Bangalore and Delhi next year compared to 5,90,000 square meters in 2013.
According to a recent report by international property consultant Jones Lang LaSalle, this considerable supply coming up in city peripheries will find takers due to limited supply in these areas.
Commenting on the number of malls in the offing, global property consultant Cushman & Wakefield’s executive managing director Sanjay Dutt said, “There is decent supply coming up next year including 18 malls. However, I suspect that some 30 to 40 per cent of construction may be deferred if the shopping centres don’t open by Diwali.”
“However, rental and capital values will remain stable in most cities on account of the on-going slowdown in the real estate sector. Viewed cumulatively, these factors will prove to be incentives for retailers to enter the market or expand their business,” said the Jones Lang LaSalle report.
Coupled with stable real estate prices and potential resolution of various policy issues and rising incomes of the consuming class, global retailers will be more interested in India in 2014, the report added.
UK retailer Tesco has already made a beginning by announcing a $110 million investment in India along with Trent Ltd. The consultancy see uncertainty on account of the general elections as a negative factor in attracting foreign direct investment to the sector.
According to its recently released report ‘India’s Retail Luxury Quotient’ as of 2014, India’s retail sector has the potential to reach around Rs. 25 trillion. The same report says that the size of retail market is around Rs. 19.2 trillion (as of 2012), accounting for 22% of India’s GDP.