"Rising steel and cement prices have boosted construction costs of shopping malls in India by as much as 40 per cent over the past two years," Biyani said in an interview with UK daily Financial Times.
The report said that the head of leading retailer Pantaloon has warned that high property prices in big Indian cities are threatening the country's burgeoning retail industry and adding to the pressures brought on by soaring construction and labour costs.
"At current property prices, you cannot exist in the modern retail business. Either productivity has to increase significantly or rent has to come down, " Biyani was quoted as saying in the Financial Times report.
Rents in Main Indian cities such as Delhi and Mumbai are among the highest in Asia, in spite of the poor infrastructure and uneven quality of properties. Rents for prime retail space in Delhi is 1,146 dollar per square meter a year, as per real estate adviser Jones Lang LaSalle.
Further in the FT report Biyani said that volumes become very important. For anyone who starts at a smaller scale, the pressures become much higher.
