The southern Indian states of Karnataka, Tamil Nadu and Andhra Pradesh, with their relatively lower real estate costs, peaceful social environment and stable governments have helped organised retailers expand their businesses faster in the region.

The retail market in South India was valued at Rs 2,62,930 crore at 2006 prices. Of this, the size of the organised retail market in 2006 stood at Rs 12,825 crore, representing 4.9 per cent of the total retail market. Only 4.6 per cent of the Indian retail market was organised in 2006 and only 0.8 per cent of the Rs 743,900 crore food and grocery (F&G) retail in India was organised. About 1.4 per cent and 1.3 per cent of the retail segment was organised in Andhra Pradesh and Karnataka respectively.

According to 'The South India Retail And Realty Report: 2015 and Beyond' brought out by international real estate consultants Cushman & Wakefield for 'Images Retail', quality real estate space is a key concern of the retail sector in India. With the changes in the regulatory environment, the opening up of the market and the growth of private equity, and the rising demand for high-end residential and commercial premises is gradually transforming the traditional real estate sector into a more transparent and accessible market. The same held true for real estate sector in southern India.

In the south, capital values saw a sharp rise in the rates throughout the review period across all centres. The rates were the highest in Bangalore at Rs 17,083 per square feet, with Hyderabad second with Rs 16,388 per square feet while Chennai stood third with Rs 11,014 per square feet. Bangalore indicated the highest retail rentals, followed closely by Hyderabad, with Chennai with the lowest retail rental rates of the three. Cushman & Wakefield said in its report that by 2007-08, an estimated 100 million square feet of quality shopping centre space was expected to generate retail sales of over Rs 50,000 crore ($11 billion).

In tandem with the growth in organised retail, the present two square feet-per capita retailing space would rise 15-20 per cent by 2010. By 2011 roughly 300 million square feet of additional retail space was likely to be generated. At present, there were about 200 operational malls and this number was expected to rise to 600 by 2010-11. Of the new malls coming up, about 40 per cent would be located in the country's smaller towns and cities.

The supply of shopping centre space in South India was at 14.1 million square feet in 2006-07, accounting for an increase of about five million square feet space in 2004. On the basis of the projects announced, by 2007-end, the north zone would account for 41 per cent of the shopping space in India, followed by the west zone, accounting for 35 per cent share, with the South enjoying 16.8 per cent share and eastern India the remaining 7 per cent.
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  • regarding Southern Retail market

    Dear sir,

    Your article was very informative.......

    You have any data more specific to individual souther states.....and also the retail growth for metro vs nonmetro of southern states???????

    Jambaavan
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