Over 375 shopping centres with 90 million sq ft to map Indian retail by 2007- I

Indian Retail will see over 34 million sqft of shopping centre space by the year end, reveals the Images 2005 report on shopping centre development in India. The second edition of ‘Retail Real Estate : Malls in India’ was jointly released by the secretary, commerce and industry, Dr Ajay Dua, Unitech director Mr Sanjay Chandra, K Raheja Corporation’s director Mr Ravi Raheja and Pantaloon Retail’s Mr Kishore Biyani at the India Retail Forum (IRF) in Mumbai.

According to Mr Amitabh Taneja, director (India) International Council of Shopping Centres (ICSC) and chief convenor, IRF, “The projection for emerging retail space by end-2005 stood at 26.4 million sqft of built-up area when last compiled in February 2004. This second report details over 32 million sqft of mall space by the year end and 2 million sq ft more would be under development that could not be listed.”

“Performance beyond expectation is all the more significant in the backdrop of adverse reports and predictions on this sector - ground reality would suggest that observed developments are but just the tip of the iceberg,” Mr Taneja said. Based on a complete list of shopping centres developments taking place across the country, the projection for listed developments by 2007 end is 358 shopping centres with a total built up area of 87.8 million square feet, growing at the rate of over 60 per cent per annum. There would be at least 20 more developments, details of which were yet to come and which could not be incorporated for publishing in the book. Adding them to the listed developments the total built up area is expected to exceed 90 million sq ft.

Based on the listed developments till end-August 2005 in the IMAGES study, there were a total of 96 operational malls/shopping centres in India with a total built-up area of 21.6 million sqft. With respect to the recoded numbers, the National Capital Region was on top though Mumbai gained en edge in terms of total space.

The Images Malls In India 2005 Book has contributions from major international Property Consultants like Chesterton Meghraj, Cushman & Wakefield, Jones Lang Lasalle, global consulting organisations like A T Kearney, KSA Technopak, Price Waterhouse Cooper, experts from the panel of International Council of Shopping Centres (ICSC) and industry experts with thorough understanding of global best practices in shopping centre and retail business.

Major Highlights

a. By end Aug 2005 there were 93 operational malls/shopping centres with 21.6 million sq.ft of built-up area

b. From 158 malls/shopping centres by end-2005, India to have 358 malls/shopping centres in 2007

c. Based on ongoing projects, built-up shopping centre area to increase from 32.6 million sq.ft in 2005 to 87.8 million sq.ft in 2007

d. Rate of growth in mall space to drop from 97% in 2005 to about 61% in 2007

e. By 2007, north zone to account for 39% of total mall space followed by West zone (33%), South zone (18%) and East zone (10%)

f. Smaller B-Grade cities to have about 12.8 million sqft of mall space by 2007 - Ludhiana accounting for about 2.5 million sqft and Ahmedabad about 3.4 million sqft

IMAGES - KSA Technopak Report:

a. Retail industry currently estimated at USD 205 billion (INR 930,000 crore), expected to grow at 5% p.a

b. Organised retailing projected to grow at the rate of 25-30% p.a., to become USD 8 billion (INR 35,000 crore) by 2005 and USD 24 billion (INR 100,000 crore) by 2010.

c. Contribution of the organised sector to total retailing sales is likely to rise to 9% by 2010

d. Large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa Group, and Piramal Group among others have either entered or expressed serious interest in organised retailing

e. Foreign investors and private equity players also firming up plans to enter retail - Investments in the sector are estimated at USD 400-500 million (INR 2,000-2,500 crore) in the next 2-3 years, and over USD 4,000 million (INR 20,000 crore) by end of 2010.

To be continued