Arjun Sharma, Director, Select Citywalk, shares his 2020 vision for the retail real estate industry considering the entry of new brands in the country and high streets doing good business despite the development of malls.
Are you satisfied with the way the Indian retail real-estate industry has grown until now? are you satisfied with its progress over the past decade?
To a certain extent, the scenario of retail real-estate in India could havebeen much better. The pace of development should have been faster. The quality of organised retail spaces in the country is below standard. Brands are slowly increasing in number Good-quality retail space is a challenge.Though consumers are present in numbers and the same is increasing speedily,the growth could have been much more.
How according to you will the Indian retail real-estate industry look like in the year 2020 and beyond? How do you think it will evolve over the next decade?
At present, it stands at about 5 percent of organised retail. It should definitely cross the 15-20 percent mark over the next decade. The industry will continue to grow in the organised retail sector and more quality retail places will be available by the year 2020. Every day, we hear of a new brand(s) that is to enter India. Numerous new brands will flock to the country eventually.
What do you think are some of the biggest problems and challenges facing the retail real-estate industry of India today? What critical bottlenecks have to be overcome to allow the Indian retail real-estate to grow to its maximum potential?
Unorganised retail real estate is the biggest problem facing the industry because there are no specific and uniform laws. In fact, retail does not even have industry status in India. The guidelines could be clearer. Currently, FDI is also state-centric. For brands coming from outside India, it becomes very difficult to have one uniform policy for the entire country.
In which areas do you think the Indian retail real-estate industry islagging behind the West and China? What do you think have been its main disappointments?
Government participation is one area where we can take more steps. For example, certain catchments have been over-utilised. Proper planning and study to find proportionate allocation of areas between residential and commercial and retail can be done. For example, in China, the government participates much more in the development of commercial and retailreal-estate.
What do you suggest should be done by the industry and the government toconsolidate the growth of retail real-estate in the country and push it to ahigher growth path?
Retail real-estate should be given industry status. Retail is the second biggest employer and contributor to GDP in India after agriculture. The government and the insdustry have to work together to create quality retail spaces so that brands get the real estate according to the catchment.
What impact will the FDI in single and multi-brand retail have on the prospects of the retail real-estate industry?
FDI will help in promoting retail in India. India’s first requirement is foreign exchange because we are highly dependent on imports. To feed the import business, either we have to export or allow foreign exchange to comein. Besides, high street markets are doing good business despite the development of malls. The market is extremely accommodating. It is high time that we alloe REITs in India.
If you were granted one wish for the retail real-estate industry, what would it be?
If there has to be one wish, then it would be for the retail and retail real-estate sectors to get industry status.