India Real Estate Monitor

KOLKATA: Rising retail industry in India would see a phase of consolidation in the medium term while ill-planned malls were likely to go out of business, an official of real estate management company Jones Lang LaSalle Meghraj (JLLM) said.
“There is a enormous potential for the retail sector in the country since India is a large economy and 97 % of the country’s retail trade is still in the unorganized sector,” JLLM Managing Director (Kolkata market) A. Das told reporters.
With the country’s economy estimated to grow at a rate of 9% per year, there would be steady shift of the retail business from unorganized to organized sector, he said.
Despite of this, retail sector would see a stage of consolidation in the medium term. According to Das, malls which are ill-planned and of below average standards would be under severe pressure.
Companies like Reliance Retail, Future Group’s Big Bazaar are expanding their network in the country while new players are entering the market, he said.
He said a small player with an terrific mall in terms of design, positioning, tenant mix and value proposition would always do better than a big player with a below average mall, ill-designed and poor value proposition.
The sector would continue to magnetize investments in the subsequent 5 years, he said, adding that there was no scope for deceleration in the development of the industry in the country.