 "Foreign retail chains to heat up real estate by store expansion")
Of these, IKEA is awaiting a clearance from the Cabinet Committee on Economic Affairs (CCEA) for investing Rs 10,500 crore in India for opening stores. While Swedish fashion chain H&M is in the process of applying for India entry, American coffee chain Starbucks has opened stores in Mumbai and Delhi through a joint venture with the Tatas. Others like UK-based toy major Hamleys, French apparel brand Lacoste and European kidswear chain Gron Stockholm are present in the country through local partnerships.
Among the Indian retailers, Reliance Retail is likely to be a lead player in terms of expansion, followed by Bharti group, both for Easy Day and Bharti-Walmart's cash and carry or wholesale stores, analysts pointed out. Aditya Birla Group and Spencers, too, may be on a store expansion spree this year. (NCR TO TOP IN MALL SUPPLY IN 2013)
Anshul Jain, India chief executive officer of DTZ, an international real estate consultancy, told Business Standard Reliance Retail, Mahindra Retail, MORE, Jubilant FoodWorks, etc have charted aggressive expansion plans. He added Malabar Gold, Peter England, Proline and Liberty Shoes are some of the major brands that have indicated to pursue accelerated expansion plans for 2013.
Cushman and Wakefield, another leading consultancy, named K Raheja Corp (promoters of Shoppers Stop, Crossword and HyperCity), Future Group (with outlets like Pantaloons, Central, Big Bazaar, Brand Factory, Food Bazaar) , Aditya Birla Retail (with MORE outlets and owning brands like Louis Philippe, Peter England, Allen Solly, Van Huesen, etc), as some of the prominent chains expected to look at expansion of space across India in 2013.
Landmark Group (with outlets like Auchen, Lifestyle, Home centre, Max), Trent Retail (with outlets like Westside, Star Bazaar, Landmark), Infiniti Retail (owning Tata Croma), Tata Starbucks, PVR, INOX and Cinepolis are the other groups mentioned in Cushman's report.
Sanjay Dutt, executive managing director, Cushman & Wakefield, said cash-and-carry and hypermarkets will see high activity in terms of retail chains acquiring space. Dutt is hopeful the supply side in retail or mall real estate will be better this year than 2012.
Cushman projects that a large chunk of mall supply for 2013 will come in the northern parts of the country and absorption is also expected to follow suit. But the overall absorption level could remain the same as last year. Quantum of leasing activity will be more in the north due to the availability of quality space, and maximum retail action is expected to take place in Delhi, Gurgaon and Noida, it pointed out. So, if 2012 witnessed a weak supply of 3.44 million square ft of mall space spread across eight cities of Ahmedabad, Bengaluru, Chennai, Hyderabad, the national capital region, Mumbai, Pune and Kolkata, 2013 is likely to experience a mall supply of about 12 million square ft in these cities, four times that of the previous year.
Jain of DTZ agreed that maximum action was likely to be centred across cities like Delhi NCR, Mumbai and Bangalore. "While some Indian brands are exploring opportunities to expand in Tier-II and Tier-III cities, most retailers, particularly international brands, aim to consolidate their presence in established retail hubs before expanding in new emerging centers," he added.
Analysts attribute the cautious optimism in the Indian commercial real estate to some strengthening of the US economy in recent months, along with policy reforms undertaken and proposed in the Indian market.
According to DTZ, the government policy allowing up to 51 per cent foreign direct investment in multi brand and 100 per cent in single brand retail, along with an improvement in overall sentiment, is expected to bring an uptrend in leasing activity from retailers in 2013. This may result in an upward movement in retail rents, particularly in the second half of 2013 across most cities, DTZ said.
The total mall space stock across seven major cities was around 66 million sq ft at the end of 2012.