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- Real estate to be the most critical part of the retail strategy.
Retail groups are now relying on real estate and thereby consider location to be the most critical part of the retail strategy.
The raring to go Bharti-Wal-Mart joint venture between the US retail giant Wal-mart and Sunil Mittal's Bharti Group has opted to follow the US giant’s global model even in India by setting up stores at least 10 kms away from residential hubs. This will set the trend for shopper and shopaholics to go to the retail store with a purpose to shop instead of straying in for the sake of ameteur window shopping while you have other shopping areas around.
The Bharti-Wal-mart joint venture company, is looking at a variety of options such as leasing, renting and owning property. the company is also contemplating that, land for the venture to be bought by a group of big-ticket financial investors who will lease out the land to the Bharti-Wal-Mart alliance for which a fund could be set up. This they believe will further reduce the dependence of the alliance on developers.
With rents going through the roof, its easy to see why rentals of prime retail properties, such as malls and multiplexes, have shot up by as much as 60-70% in the last one year. At present, rentals in Delhi’s CBD (central business district) varies between Rs 175-250/sqft and that in the SBD (suburban business district), comprising satellite towns, is approximately Rs 125-150/sqft. Rentals in Mumbai are even higher at around Rs 350/sqft in the CBD and Rs 200/sqft in the SBD.
All these reaffirms that real estate is to become the most critical part of the retail strategy. But how dependent are the businesses on each other?CommentQuote0Flag