Quality of real estate key to retail growth: study

Monday, 09 June 2003, 19:30 IST
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NEW DELHI: The availability and quality of real estate space will be key to a sharp growth in the Indian retail sector, says a new study. "India is one of the most complex real estate markets in the world due to a large degree of variation in market practices and regulatory norms," said a joint study by the Confederation of Indian Industry and Jones Lang LaSalle. According to the study, the prevailing situation in the real estate market is "extremely unfriendly, unpredictable, expensive and difficult" for shop owners, retailers, multiplexes and food and beverage operators, among others. The study said lack of transparency and organised space-formats to conduct business is coming in the way of expansion by retailers. Major areas in the real estate market that require radical change include area calculation, leasing costs and practices, deposit levels, operating costs, standard leasing terms and conditions, it added. "Most developing economies like Malaysia, Indonesia, Taiwan, Egypt, Turkey and the Eastern European nations have identified and rectified their shortcomings in the area, and now offer excellent environments for conducting retailing," it said. "India, despite having active retail across over 12 million outlets and over 200 shopping malls planned, is seen to be lagging behind, and it would require a concerted effort by all stakeholders." The study pointed out that real estate is one of the essential determinants of modernisation of retailing in India. "Addition of better and affordable retail space will enable retailers to deliver more products and value added services to their consumers, resulting in increased volumes and efficiencies of scale, reducing their costs in the supply chain."
Source: IANS