The Hindu Business Line : Corporates optimistic on retail boom; line up huge investments

New Delhi, March 23 As the investment rate of 36.3 per cent is driving the Indian growth story, corporate retailers across the country have announced investments plans amounting to Rs 1,31,804 crore in the past six months for expanding their network of stores in the next four-five years to cash in the retail boom, according to the ASSOCHAM Investment Meter (AIM).

According to AIM — which has been tracking investments from September 2007 to February 2008 — the organised retail, growing at an estimated 25 per cent, is set to penetrate the tier II and III cities like Pune, Chandigarh and Hyderabad, as they are attracting a major share of investment announcements worth Rs 27,550 crore.

Real estate majors like Unitech and DLF have drawn massive plans to cater to the burgeoning demand of the shopping malls.

Capex amounting to Rs 65,000 is planned to be invested in real estate development for retail space in the next four to five years while ‘food and grocery’ is the next big retail segment with an investment plan of Rs 22,100 crore.

Changing consumer behaviour

With mega retail malls coming big way, the real estate development for the organised retail sector has attracted the maximum number of investment announcements amounting to Rs 65,000 crore.

With inflated metropolitan land prices and the growing untapped consumer markets in smaller cities, tier II cities such as Hyderabad, Kochi, Goa, Chennai, and Chandigarh are becoming the preferred destination for investment by these leading real estate players for exploring retail business opportunities, said ASSOCHAM President, Mr Venugopal N. Dhoot.

The fast-growing Indian economy has given a major thrust to changing consumer behaviour as reflected by the increase in investment announcements worth Rs 29,154 crore for setting up hyper-marts.

With huge demand for food and grocery items in the country, with its 1.1 billion population, the organised retail in this segment is gaining momentum. Capex of Rs 22,100 crore has been planned to be invested in setting up chains of food and grocery stores in the next three years.

With more and more corporates investing in the sector, the prospects of job creation will surge in the next five years in cities like Hyderabad, Pune, Surat, and Chandigarh, among others.

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