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Indian Real Estate News : Delhi NCR
High Streets Back in Retailers Priority List
Source: Indian Realty News Apr 15, 2010
High streets such as Connaught Place in New Delhi and Brigade Road in Bangalore are back in retailers' priority lists as they prepare for a temporary lull in mall supply next year. Shoppers Stop, Reliance Retail, Madura Garments, Arvind Brands, United Colors of Benetton and others plan greater presence in high streets and co-location with multiplexes to keep their expansion intact between October 2011 and March 2013 when real estate analysts foresee a void in mall expansions. "Although high street properties will be limited, we may see a lot of end use changes in commercial infrastructure, where possibly the first and second floors could be converted for retail," says Bijou Kurien, president & CEO - lifestyle division at Reliance Retail. Developers may be prompted to demolish old buildings or theatres to develop retail stores to meet the demand in high streets at that time, says Mr Kurien, who heads brands such as Reliance Time Out, Vision Express, Reliance Jewels and Marks & Spencer.

While Reliance Retail, Arvind Brands and Madura Garments bet on high streets, Shoppers Stop intends to co-locate its large-format properties with multiplexes and United Colors of Benetton (UCB) plans to focus on smaller cities. Retailers and real estate analysts foresee a temporary void in mall expansions beginning October 2011 up to March 2013 because developers shelved hundreds of projects when retailers withdrew lease contracts and rentals crashed due to the economic slowdown in the last two years. Out of 800 malls originally slated open in 2010, only 100 will turn operational, says a report jointly released by Shopping Centres Association of India and retail consultancies Jones Lang LaSalle Meghraj (JLLM) and Cushman & Wakefield. This will force retailers to look at alternative models to keep their expansion plans intact, says S Raghunandan, CEO of retail at Prestige Estate Projects, a real estate firm that operates the Forum Mall in Bangalore.

BS Nagesh, customer care associate and vice-chairman of Shoppers Stop, says the retail chain will pursue co-location with multiplexes following the success of its store at Juhu in Mumbai which draws higher footfalls because a multiplex is located on the top floor. United Colors of Benetton (UCB) will concentrate on enlarging its existing stores in metros rather than opening new ones during he lull period, says Sanjeev Mohanty, MD of the Italian apparel retailer. Aditya Birla Nuvo's apparel division Madura Garments, however, is confident of finding stores of 1, 000-3, 000 sq ft across high streets, says Ashish Dikshit president of the company that owns brands such as Van Heusen, Louis Philippe and Allen Solly.

Analysts expect developers to boost retail space in high streets across cities by converting commercial properties into retail space. Properties having locked-in commercial tenants for around three years can easily be expanded to house retail outlets as well, says Baqar Naqvi, associate VP, retail and consumer goods, at advisory firm Technopak. But expanding on high streets may be costlier for retailers. Most retailers tend to have more stores in malls because of easier availability, better infrastructure such as air conditioning and parking facilities, and relatively lower store rentals. This could mean a slowdown in the pace of retail expansion when mall supply drops. Kabir Lumba, MD of Lifestyle, an upmarket department chain of the Landmark Group, says smaller players will face more pressure because the growth of organised retail is dependent on affordable real estate properties.

Tag: All India, Bangalore, India Real Estate, Commercial
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