Bangalore Real Estate Trends

The organised retail sector is undergoing major streamlining in the city, says Deepti Ganapathy

Retail in India is a booming industry. The whole concept of shopping has changed in terms of format and consumer buying behaviour,thereby creating a revolution in shopping experience. Retailing has entered Indian cities in the form of high-end stores transforming the landscape of the urban sprawl.

Multi-storied malls and huge complexes offering shopping, entertainment and food have brought in a new dimension to retailing.

The city is one of the top destinations in this segment.Bangalore being a garment hub,the retail industry began here 10 years ago. There were local players too in the commercial avenues of Brigade Road and M G Road in electronics goods, F&B and other goods. "The market in the city gradually saw the entry of a couple of retail stores in the large format of retail (30,000-40,000 sqft area). Today,the market is at a stage where the biggest challenge is to get a customer and retain him,"says Siddharth Indrakanti,Store Manager at an international chain of apparel stores.

Retail focus

The expansion of retailing is in the most active phase today.It is rapidly growing at 25 percent annually, it could be worth USD 175-200 billion by 2016. It is witnessing the entry of new players and development of new formats. The food retail industry in India dominates the shopping basket.Apart from large industrial conglomerates and international retailers,a number of regional players particularly in the supermarket segment have also entered the retail arena.

The rapid growth has attracted the luxury product segment in an environment of economic liberalisation. This,coupled with the rising purchasing power parity (PPP) index of domestic consumers, made retailers realise the relatively untapped domestic market. With the FDI policy 2005-06 allowing single-brand foreign retailers to take up to 51 percent stake in a joint venture with a local firm,the intervening years saw the entry of several premium brands mostly through joint ventures. Currently, FDI is not allowed in single brand retail. However, there is 100 percent FDI permission in wholesale trading.

"This has not been much of a deterrent and retail stalwarts have already made inroads into the Indian retail industry,"says Pradeep S M, Brand Manager at a high-end store. "With multi-million dollar investments by major domestic players, the market is expected to grow, as Indian retailing takes off on a long-term growth trajectory,"he adds.

Assessing demand-supply

Despite the global economic recession and a consequent slowdown in the Indian economy,organised retail continued to make headway although at a slower pace in 2009."When recession hit,everyone realised that they were paying high rentals and the need for owning retail space was top priority,"explains Siddharth."The process to study catchment areas began.In the city the localities where the IT population was residing became high street shopping regions."

High street shopping

Most major retailers have at least 2-3 stores spread across the city. Brookefields, Whitefield, Bannerghatta Road,Koramangala, Indiranagar 100 Feet Road, New BEL Road and Malleshwaram have become success stories in the retail sector. From food courts, electronic goods, cash and carry, large format discounters, multiplexes, children's play zones - they have it all.

These residential areas now cater to the needs of the residents providing a one-stop destination for all their shopping and entertainment needs. Owing to this trend,the demand for retail space in these areas has led to many residents opting to rent out their premises and make way for retail establishments.

_{Source: TimesProperty Dt: 27-8-10}