Real estate in India is soaring high with people reaping profits from this sector. In the last 2-3 years real estate has plummeted to new highs with around 100 % to even 600% increase in the rates of both commercial and residential sector.
The shift today is and expected in the future will be towards the commercial segment with retail giving a strong impetus to it. The international retail giants have keenly set their eyes on government of India for granting them entry into this enormous demand generating country with huge potential. At present only single brand retailers can own upto 51% of the equity. All the international players are anxious to have their share of this pie in an attempt to raise the company’s profit graphs northwards touching new peaks. The retail wave which is waiting to come into its full swing will sweep the real estate sector to further highs.
Not only the global retail giants are eager to foray into Indian markets but big and well established companies back home are mapping out plans to explore new expansions into retail. Wal-Mart recently entered into a JV with Bharti and will soon be setting shop in India. Other retailers waiting on the wings are: TESCO, Carrefour, IKEA, Target, VF brands, etc.
According to AT Kerney’s report, India is the most favored destination for global retailers. AT Kerney’s Global Retail Development Index 2005 puts India at the top.
The retail outlets opening up in tier II and tier III cities exemplifies the company’s strategies to target the middle class, rural and semi urban category of more than 70% of the population living in villages and non-metros who do not have access to quality retail markets; with assumptions of this segment worth more than $350 billion. With companies like Reliance on the verge of opening their retail store, Fresh in cities like Yamunanagar, Ambala in Haryana. Chandigarh tri city including Panchkula and Mohali is also soon going to witness the mall culture in the next 10-14 months with around 8-10 malls ready to offer a new world of organized retail to the local residents. Places like Ludhiana and Amritsar have already followed this league.
Not only the retail sector is making waves in the country but also IT and ITES is turning to be a boon for real estate. With a vast number of global IT companies foraying into India, the demand for quality office space is increasing and thus are the prices. Real estate companies are vying to fill this gap between demand and supply by offering standardized office space. Even the state and central government is coming up with IT parks in tier II cities anticipating the demand and the availability of quality human resource. For instance Chandigarh and Mohali both have their own IT parks within a distance of about15 kms.
This upward trajectory in organized retailing and IT sector will certainly boost the commercial retail sector with demand expected to increase manifold.
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