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The next wave of growth in the service sector will be powered by organised retail, leading to a huge spurt in demand for quality real estate, especially for shopping malls. The insight is part of the findings of a new survey carried out by ICICI Property Services and Technopak.

According to the survey, the Indian retail industry is expected to grow from the current level of US $330 billion to over US $500 billion by 2011. The growth will create unprecedented demand for at least 500 million square feet of real estate, with shopping malls accounting for 50 per cent of the requirement.

The study suggests that India can accommodate 1,000 additional shopping malls, spread over 500 cities and towns. Currently, 137 malls are operational in the country.

Developers, however, have planned for only 143 million sq ft of space for the retail industry, leading to a projected shortage of 40 per cent. That said, the survey predicts that Indian real estate will move into the ‘next orbit’, with international developers and MNCs creating world-class and ever expanding shopping environs.

The survey estimates that the retail sector will see an investment of US $30 billion over the next four to five years. Seventy per cent of the infusion will come from just seven top players such as Reliance Industries, Aditya Birla Group, Bharti-Wal-Mart, and the Future Group. International companies such as Wal-Mart, Metro, Carrefour, Auchan, and TESCO will account for 40 per cent of the investment.

More than half the investment (60 per cent) will be in India’s top 25 cities, that is, the five metros and smaller A-class cities such as Hyderabad, Surat, Nagpur, Indore, and Baroda.

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The real property boom will be shifting towards places like, Nasik. Satara, Sangli, Solapur, Kolahpur, Baroda, Surat and such places. The investors as well as retailers are finding value here.