Mohit Arora Director, Supertech, opines that India being very price-sensitive, a lower land rate is something that can boost the industry as it will lead to lower rental values. According to him, about 20–25 percent of the value of a product is accounted for by the retail rentals. However, if the rentals go down, the sales will definitely become higher in malls.
Are you satisfied with the way the Indian retail real-estate industry has grown until now?
Personally, I am not satisfied. The Indian retail real-estate industry has lots of potential but it has not been tapped properly, mainly because of high rental values and low-budget customers. We are only focussed on malls but there could have been a good focus on high streets and unorganised retail as well. Overall, it could have been much better.
How do you think the Indian retail real-estate industry will evolve by 2020?
The year 2020 is going to be very different because the purchasing power of the people is growing. But before that, the journey is going to be a bit difficult because we will have to change the shopping habits of the consumers, expose them to organised retail, and also understand their needs. The whole way to 2020 will be challenging.
What do you think are some of the biggest problems and challenges facing the retail real-estate industry of India today?
Exposure of the customer to organised retail is going to be the biggest challenge the industry is going to face. It is not that people don’t have purchasing power. They just don’t want to get into a mall. Exposing them to the brands that are available to shop and bringing them to the retail space are the biggest challenge.
What do you think have been the main disappointments for the industry?
Quality retail space is one area where Indian retail real estate is lagging behind. The space utilisation is not being done properly. I feel that Indian retail real-estate industry is on the right track. Exposing consumers to brands and inspiring them to shop around is the only way we can educate them.
What should be done by the industry and the government to consolidate the growth of retail real-estate in the country?
India being very price-sensitive, a lower land rate is something that can boost the industry as it will lead to lower rental values. About 20–25 percent of the value of a product is accounted for by the retail rentals. However, if the rentals go down, the sales will definitely become higher in malls. Retailers don’t want to get into malls or organised retail mainly because of the high rentals.
If you were granted one wish for the retail real-estate industry, what would it be?
Government should treat retail real-estate as a separate industry. Form separate norms for this industry in terms of lower interest rate and land rates. Retail real-estate industry should not be compared to the real estate industry. Just like infrastructural projects, there should be just retail projects.