RETAIL reforms to help real estate firms like DLF to kick-start projects

Friday's big-bang retail reforms have perked up some of India's biggest real estate firms such as DLF, the country's largest real estate company, is already planning to kick start the largest mall in India, with 4 million sq ft of space in Gurgaon and is hoping that by the time the mall opens in 2015-16, quite a few new retailers and brands would have entered the country by then with the easing of FDI in single and multi-brand retail."Retail real estate has been down and out for the last three years and this move will give a fillip to the segment," says Pranay Vakil, chairman, Knight Frank India.There are lots of empty spaces in malls across the top metros in the country right now. In the April-June 2012 quarter, there was about 26% vacancy in malls of Delhi-NCR, 23.5% in Mumbai and 18% in Pune and between 5% and 15% in Bangalore, Hyderabad and Chennai, and rentals have been under pressure."Rentals are not likely to go up immediately, but space take-up will be far better than current levels," said Anuj Puri, chairman and country head, Jones Lang LaSalle India. The condition to put at least 50% of total FDI in back-end infrastructure within three years of the induction of FDI will also help improve the infrastructure and its efficiency, say experts. According to Jones Lang LaSalle, malls are a Rs 24,000-crore business opportunity, which is expected to double over the next 10 years, with the opening up of FDI in retail While there has been severe opposition to opening up foreign investment in multi-brand retail in India which has delayed the policy by many years, there's no doubt that retail plays a big role in improving the productivity of economies at large.many real estate majors like DLf have seen complained about this delay in policies in the past. Ramesh Sanka, who heads retail at DLF, is more confident of building malls now. "We should be able to construct malls more confidently now," he says. The group is currently building one of the largest malls in India, in Noida, which will be operational middle of next year, and another one in Gurgaon's Golf Course Road.Next year, it will start construction on the 4 million sq ft Mall of India in Gurgaon, which will be the largest in the country when completed in 2015-16. "The policy will help the growth of organised retail in the country, including in malls," says Sanka. The opening up of both single and multi-brand retail for foreign players would allow for a whole new tenant mix in malls. At present, there are only a handful of large retailers who are chosen by builders to come in as anchor tenants for their malls, which is one of the reasons why a number of smaller malls have not been able to get the footfalls in the past few years. The total number of malls in India has jumped from 20 in 2003 to about 240 in 2010 to about 280 now. According to Jones Lang LaSalle, malls are a Rs 24,000-crore business opportunity, which is expected to double over the next 10 years, with the opening up of FDI in retail. While there has been severe opposition to opening up foreign investment in multi-brand retail in India which has delayed the policy by many years, there's no doubt that retail plays a big role in improving the productivity of economies at large.