Retail finds a foothold again

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}   As long-term prospects start to lookupbeat, retail formats such as furnishings, lifestyle apparel, fitness,electronics and accessories are set to see growth   With the market slowing down in thebeginning of the year 2009, retailers were forced to offer discounts, sales andspecial in-store promotions to maintain sales volumes. As a result of thesefactors and a surge in supply of new shoppingcentre space , the market changed from onefavouring landlords to one where tenants' negotiation power grew significantly. During the course of the last year,rental levels fell substantially from the highs reached in 2007 and 2008. In addition, lease terms have become more favourable to the lessee, says areport titled India Retail Market View published by realestate consultancy CB Richard Ellis. Retailers have become more cautiousin their approach towards retail markets and are increasingly looking atfootfalls, tenant mix and conversion rates before committing to renting retailspaces. Additionally, developers have become more understanding of the tenant'sneeds, and are willing to offer more flexible lease terms to ensure higheroccupancy. A downsized Minimum Guarantee (MG) coupled with revenue share hasrapidly become a norm for retail establishments. This flexibility has allowed retailers to reassess their positions and developtheir brands in specific retail micro markets, says the report. Further, many mall owners areorganising regular events, such as night bazaars, concerts and promotions toensure regular and sustained footfalls. In the past few months, retailrealty has slowly but surely startedfinding its feet again. Despite the economic slowdown, mediumto long-term prospects for the domesticeconomy appear increasingly optimistic. While almost all retailers have adjustedtheir expansion plans to suit current market conditions, and a few haverationalised their store portfolio, no major retailers have had to downsizesignificantly. The flexible approach taken by landlords -deep rental discountsand other inducements to keep stores open and trading within their schemes -hashelped retailers. For 2010, a positive trend inconsumer spending is expected. It is also expected that the new trend of powersharing between the landlords and tenants to become balanced at a point thatenables both sides to work together to ensure that shopping centres andhighstreet locations succeed. National Capital Region: TheNational Capital Region (NCR) continues to command its preferred destinationstatus for retailers looking to venture into India. Rentals in Grade A retail spaces witnessed minor corrections and have since been moving towards stability. Meanwhile, secondary retail pockets posted sizeable corrections over the pastfew quarters. The slowdown saw most malls footing the bulk of the bill,amounting to nearly 40 per cent value erosion. Meanwhile, high streets observeda 20-25 per cent drop in rental values. Prime retail spaces continued to bein demand, with retail activity remaining focused around South and CentralDelhi. Key international brands like Haagen Dazs and Zara are looking to maketheir market entry in the coming months with outlets in Saket District Centreand Vasant Kunj mall clusters. Meanwhile, players like Estee Lauder and Alcotthave already become operational. Luxury brands like DKNY and Versace have alsoopened their flagship stores at DLF Emporio, India's first luxurymall , at Vasant Kunj. Khan Market, one of Asia's mostexpensive retail destinations, continues to hold forth with the mushrooming ofseveral eateries, designer boutiques and international brands like L'Occitaneand Celio. A clear trend that is emerging is the rise in share of food andbeverage players actively acquiring retail spaces .The preference of the end consumer has shifted to affordable eating places,triggering a climb in the number of quick service restaurants, as is evident byKFC's rapid expansion. With long-term prospects looking upbeat, retailers withformats, such as lifestyle apparel, furnishing, fitness, electronics,accessories etc. are contemplating their market entry, or expansion. Rental trends Rentals in Delhi NCR have corrected further by approximately10-15 per cent over the levels witnessed in the first half of last year; anoverall drop of 20-30 per cent from the levels observed at the beginning ofthat year. Also, an increasing number of retailers and developers are takingthe Minimum Guarantee (MG) and Revenue Share route to partner each other'ssuccess. Outlook for the year The current period may be looked at as one moving out offlux and towards stabilisation. There is significant activity in the sector,but retailers are also watchful and judicious of the specific micro markets andretail hubs. The outlook remains optimistic inthe long term as new international brands evaluate their entry in the Indianretail market. Prime high streets and malls may continue to dominate retailermind space with limited availability and increasingly rational commercialterms. Secondary markets should witnessfurther corrections in rental values with decreased demand and the availabilityof betterreal estate options . New and planned mall developmentsmay remain on hold until the demand scenario becomes clearer. Mumbai and Bangalore: The next yearseems promising both for retailers and developers in these cities becausemerchants have chalked out innovative models, both in terms of reduced storesizes as well as financial models that ensure long term sustainability. Developers are looking to complete projects that have been on hold and enteringnew markets in Tier II cities where there is a demand and potential for growthof organised retail. Chennai: The year ahead holdspromise for the retail industry with new and existing retailers evaluating thecity for expansion. Established retail locations ,such as Nungambakkam, Anna Nagar, Anna Salai and RK Salai, have already seeingdemand. This trend is gradually expected to spread over to other micro marketslike ECR, OMR and Velachery with the development of residential areas. Major developers like Prestige,Phoenix Mills and Aerens Gold Souk have already commenced work on malls theyhad announced some time back. These are expected to be operational in thecoming years. Kolkata: The mediumto long-termhorizon promises to be retailer centric with an influx of new mall supply and retaildevelopments at both prime and suburbanlocations. With further political liberalisation and infrastructuraldevelopment, demand for organised retail will increase. The retailers' anddevelopers' efforts would be directed towards achieving mutually beneficialbusiness models, which should be favourable for sustainability of business. Occupancy levels may increase acrossmalls and high streets keeping the above purview in mind. Courtesy:HT Estatesdt:06-March-2010 For more information regarding apartment in mumbai, bedroom apartments, buyproperty in india, commercial complex in india, commercial real estate,commercial space in mumbai, dealers, flats for sale, indian real estateinvestment, investment options in real estate, luxurious flats, malls, officespace, office space in mumbai, online real estate, penthouses mumbai, plots,property consultants, property in mumbai, property india, property investment,real estate company, real estate developer, real estate mumbai, real estate inindia, real estate investment strategies, real estate market, real estate news,real estate portals, realtors, realty, residence, residential real estate, sellproperty, shop, villas, Residential Apartment   Visit    www.zameen-zaidad.com             www.propertycafeteria.com   Author Hi I am Ravi Chauhan I am working in ( Bhardwaj Buildtech PvtLtd ) Company in Delhi. 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