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ANOTHER NEW REASON FOR REAL ESTATE PRICES TO RISE IN INDIA

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ANOTHER NEW REASON FOR REAL ESTATE PRICES TO RISE IN INDIA

Last updated: September 12 2011
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  • ANOTHER NEW REASON FOR REAL ESTATE PRICES TO RISE IN INDIA

    Friends, try to understand and analyse the below news intelligently with "Real Estate" prices in mind and how retail business expansion as mentioned below will affect you and your property purchase desires.

    For those of you who are very young and those who are not used to reading the "below" kind of news, I want to bring their focus to the last line in the below news.

    In the last line below, u will find a mention of "India's Retail Market" which is currently of $28 billion now in 2011. For those who dont know, I want to explain here - retail market is where retailers like u and me go and buy our daily needs or household stuff. As u are aware, we all go only to malls for such stuff and most of our needs. Now, here is where your "intelligence" should come in and play a role. If Bangalore now currently has 45 Malls, let's say for example, then, to contribute to $260 billion (almost 10 times rise from 28 billion) as mentioned in the last line in below news, Bangalore should also have 10 times the current number of Malls. That too, in 10 years by 2020, as per the last line in below news. Means 450 Malls. In other words, If India currently has 450 Malls in 2011, India will need 4500 Malls to do a business of $260 billion by 2020, as per last line in below news.

    Since 450 Malls in Bangalore is unthinkable in 10 years and all of u will laugh at me, let us say Bangalore will atleast have another new 75 malls in the next 10 years. What will happen to real estate prices around those 75 malls in the next 10 years??? That is what u have to visualise and imagine - see as a "vision" - after reading the below news and then plan your property purchase now, accordingly - without waiting for the next 5 years to buy. Happy analysis!


    Retailers willing to offload stakes

    In Times of India, by Dipti JainDipti Jain, TNN | Sep 12, 2011, 06.41AM IST

    NEW DELHI: Several domestic retailers are willing to offload stakes in their ventures once the government allows foreign direct investment (FDI) in multi-brand retail . Most retailers TOI spoke to said they were keenly awaiting the new rules which would enable them to access capital and help expand their businesses .

    A panel of secretaries has approved the move to open up the multi-brand retail sector to foreign firms . The decision will be sent to the cabinet for approval . Officials said the government might open up the sector soon but analysts said the decision could face stiff opposition from traders , who fear that mom-and-pop stores will be wiped out if foreign firms are allowed entry .

    "FDI in multi-brand retail is very much needed in India . We have both talent and consumption power here . Only thing missing is the capital . FDI will take care of that ," said Ram Chandra Agarwal , owner of hypermarket chain V2 Retail Ltd. Agarwal , who recently sold his previous retail business , Vishal Retail Ltd, is willing to offload his stake if he gets a good partner . "I don't understand why the government is delaying opening up FDI in this sector . Foreign players will help us improve technology , storage capacity . They too would need the help of good
    Indian companies . So growth will be parallel ," he added .

    India allowed 51% FDI in single brand retail in 2010 and 100% in cash and carry wholesale segment in 1997.
    Several foreign retailers such as Wal-M art , Tesco, Carrefour and Metro AG are present in the country in the wholesale segment and eagerly awaiting the opening up of the multibrand retail sector .

    Cantabil Retail Ltd, which recently restructured its business due to mounting losses , is willing to join hands with a foreign partner . "FDI in multi-brand retail will be good for us. The market will become more competitive and more professional ," said Vijay Bansal , CMD, Cantabil Retail Ltd.

    Domestic retailers said the move to open up the sector should not be delayed .

    "Foreign retailers will bring in new technology and know-how . If not now , FDI in this sector will have to be opened in a few years . It cannot be stalled forever ," said Lalit Agarwal , MD, V Mart .

    Competition has helped domestic companies to grow and undertake innovation , other players said . "Foreign companies will not stunt our growth . Several foreign brands , like Zara , Mango , Guess, came to India in the last few years.

    Our sales have only increased . Instead of adversely affecting the market , they will provide consumers with more choices to pick from and boost awareness ," said Deepak Agarwal , chief executive officer , Kazo .
    The current size of India's retail market is around $28 billion (Rs 1.26 lakh crore ) and is estimated to grow to $260 billion by 2020
    Last edited September 12 2011, 05:15 PM.
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