Indian real estate prices are going through the rooftop which
have made the creation of a viable retail sector a little difficult,
feels most Indian retailers.
91 per cent of respondents are of view that the property prices
in the country had been overpriced whereas the remaining feel
the prices to be out of reach, says the data showcased by the
survey conducted by KPMG on the retail sector in India says Despite
the proper supply of retail space in some peripheral locations
including Indian metropolitans, the prices are shooting up.
The same situation has been felt by Reserve Bank of India, construction
industry experts, and pioneering housing finance companies. Most
retailers prefer to get the land on long term leases. Also, there
are many who use a mix of owned and leased retail space while
others opt for owned areas.
Another bottleneck hampering the growth of retail sector has
emerged in selected locations, where both the users and retailers
require waiting for years to get a proper space at proper locations
to establish their stores.
All the large players in Indian retail sector would look forward
to increase the retail space area to develop new retail stores
in the next three years, says the report which is also supported
by FICCI. However, proper infrastructure facilities are also required
to service this growth in retail sector.
This is one of the major issues faced across all Indian cities.
The central areas in most cities, or the central business districts,
seem to lack sufficient momentum to deliver the required real
estate space. The retail sector would fall for the development
of 68 million square feet of mall space which has been scheduled
to come up by the end of 2007.
