Professional Documents
Culture Documents
REAL ESTATE
AND
RETAIL FORMATS
IN AHMEDABAD
PREPARED BY
Arpi Shah (020101012)
Manali Pandya (020101057)
Rohin Mattoo (020101092)
Swapnil Ambre (020101118)
Scope Of Real Estate And Retail In Ahmedabad
ACKNOWLEDGEMENT
This dissertation could not have been written without Prof. Haresh Kothari who not
only served as our college mentor but also encouraged and challenged us
throughout first two months of our Summer Internship Project (SIP). Prof. Hardik
Gandhi and Archana Dutta our SIP college mentor for remaining one month
guided us and helped us with their best knowledge. We would also appreciate the
co-operation given by other faculty members, Dr. Shalini and Pallavi Mittal.
We would like to thank Mr. Harit Kothari and Mr. Pranav Patel, our Industry
Mentors for sharing their knowledge about retail and real estate in Ahmedabad and
helping us in our project.
We appreciate the co-operation by the management and staff of each and every
retail and real estate format.
Through this acknowledgement, we express our sincere gratitude toward all those
people who have helped us in the preparation of this project, which has been a
learning experience.
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DECLARATION
We: Arpi Shah, Manali Pandya, Rohin Mattoo and Swapnil Ambre hereby declare
that the project report on ―SCOPE OF REAL ESTATE AND RETAIL FORMATS
IN AHMEDABAD‖ has been prepared with best of our knowledge and the details
in the project are according to the survey and research work which we did.
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EXECUTIVE SUMMARY
The trend and demand of application oriented studies have increased in the past
decade dramatically and hence the demand of an MBA degree to which the
inclination of the industries has also increased.
The following project deals with ―Scope of Real Estate and Retail in
Ahmedabad‖
We collected our data by exploratory research technique.
After analysing the real estate, we came to know its different formats in which real
estate is categorized. It includes formats like residential, Commercial, IT PARKS,
Shopping Malls, SEZ, etc.
To understand each format we went and spoke with different real estate developers
of Ahmedabad. After having spoken to them we came to know, how each
developer was working, their target segment of people and their interested formats.
Each developer had its own style of working. Regarding real estate, we came to
know how real estate works in Ahmedabad.
It is governed by two authorities:
1) AUDA – Ahmedabad Urban Development Authority
2) AMC – Ahmedabad Municipal Corporation
R1 – High Rise
R2 – Low Rise
R3 – Bungalows
At the end we could analyze the scope of real estate in Ahmedabad. Scope of real
estate in Ahmedabad has surely increased in some specific formats and at the same
time decreased in some because of recession. Residential format is evergreen
according to every developer. Real Estate is the best in terms of Investment.
Having analyzed Scope of real estate we started working on second part of our
project which was scope of retail in Ahmedabad. To start with we tried to
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understand what retail is? How and in which different formats it works. After some
study we came to know that retail is mainly divided into two main sectors:
1. Organised
2. Unorganised
Because of time constraint we only studied organised sector of retail which had
many formats in it.
1. Super Market
2. Hyper Market
3. Shopping Mall
4. Convenience Store
5. Speciality Store
6. Franchisee Outlets
To understand each format we visited each store of different format and carried our
research. We spoke to some store managers and did some survey by discussing and
filling some questionnaires by customers. We also visited main malls of
Ahmedabad and carried our research over there. It helped us to find scope of malls
in Ahmedabad. We visited company store outlets and carried its comparative study
with standalone store outlets to know which format is doing well.
We concluded that because of oversupply and improper management, malls are not
doing well but there were some standalone outlets that are exclusively doing well
because of their location and footfalls.
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SCOPE
The scope of our research was limited to real estate and organized retail. We have
confined our research to Ahmedabad city only. Our study was limited to new city
only. Our study include following
1) For real estate research
- Iscon Group
- Parshwanath Realty Pvt. Ltd.
- Pacifica Companies
- Shivalik Group
- Savvy Infrastructures Ltd.
- Bakeri
- Safal
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LIMITATIONS
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TABLE OF CONTENTS
Serial Page
Particulars
No. No.
1. Research Design 10-12
2. Real Estate 13-27
2.1 Macro-Economic Overview 14
Iscon Group
Parshwanath Realty Pvt. Ltd.
Pacifica Companies 20-27
Shivalik Projects
Savvy Infrastructures
Bakeri
Safal
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Shopping Malls
Super Markets
34-42
Hyper Markets
Convenience Stores
Specialty Stores
Franchisee Outlets
Levis Store
Pantaloons
82-85
Jadeblue
Westside
Pepe Jeans
United Colors Of Benetton
Conclusion 86
Questionnaires 87-89
Appendix 90-104
Bibliography 105
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1. RESEARCH DESIGN
We used exploratory research for our project. The objective of exploratory research is to provide
insights and understanding. Information needed is defined only loosely. Research process is
flexible and unstructured. Sample is small and non-representative. Analysis of primary data is
qualitative. Finding of exploratory research are Tentative. It is generally followed by further
exploratory or conclusive research. Methods to do exploratory research are Expert surveys, Pilot
surveys, qualitative analysis and Qualitative research.
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Primary objective
Our primary objective is to know the scope of real estate and various retail format in
Ahmedabad.
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2. REAL ESTATE
The pace of economic growth is usually regarded as the primary indicator of a country‘s
macroeconomic health. By this measure India has done very well in this decade, especially in the
most recent five years, with GDP growth averaging an unprecedented 8.8 percent a year.
In recent years, the broad based growth in services sector has been a principle driver of the GDP
growth.
The growth of service exports has been strong throughout the period, especially of IT software.
Software exports increased more than six fold from $ 5.7 billion in 2000/01 to $ 37 billion in 2007/8,
raising their ratio to GDP from 1.2 percent to 3.2 percent.
The drop in interest rates from 11.5% to 9.25% combined with a reduction of 15% in real estate
rates has resulted in an increase in purchasing power of 33%. The same EMI would, at a lower
interest rate provide for a higher loan. The higher loan used to purchase a home at a lower price
would enable the customer to purchase more square feet.
Although the initial real estate boom was concentrated in places like Bangalore and the National
Capital Region of Delhi (including Gurgaon), more recently the geographical spread has
widened. There has been a significant shift in real estate market from metros to its suburbs and to
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tier II and tier III cities. Lease rentals and occupancies have been picking up steadily and there is
an increasing demand for quality infrastructure across various segments of the real estate sector.
There are following types of formats in India.
The Indian IT-ITES Industry, estimated at USD 36.3 billion in 2006 has grown at a CAGR of
36% over the last decade and by 2008, is expected to account for over 7% of India‘s GDP and
30% of foreign exchange inflows. In 2005 alone, IT/ITES sector absorbed a total of approx 30
million sq. ft and is estimated to generate a demand of 150 million sq. ft. of space across major
cities by 2010. South Indian cities like Bangalore, Chennai and Hyderabad along with NCR
(National Capital Region) continue to attract the major share of IT/ITES and business investment.
However, secondary cities, like Pune, Chandigarh, Indore, Kochi and Kolkata are now emerging
as the new preferred destinations for these companies due to their cost and infrastructure
advantages.
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The Indian retail market, which is the fifth largest retail destination globally, was ranked second
after Vietnam as the most attractive emerging market destination for investment in the retail
sector. Organised retail segment would see an investment of USD 70 billion by 2010. By 2015,
the retail sector is projected to overtake the USD 650 billion mark, and organised retail will cross
the USD 130 billion mark. The consumer spending in India has increased by an impressive 75
per cent in the last four years and will quadruple in the next 20 years. Of the 12 million retail
outlets present in the country, nearly five million sell food and related products. Mall space, from
a meagre one million square feet in 2002, is expected to touch an estimated 35 million square
feet by end 2008 in the top seven cities in India. At a time when the Indian consumer space is
undergoing a metamorphosis, with increasing spending power and changing purchase habits,
consumer space is getting slowly but surely better defined.
Hospitality industry in India is growing at an annual rate of over 8%. The number of foreign
tourists‘ arrivals (a major driver of hospitality industry) in the country increased to approx. 4
million in 2005. Over 55% of the total demand for hotels in the country is generated by foreign
leisure tourists and business travellers (domestic and foreign). A large proportion of lodging
demand in commercial cities such as Bangalore, Mumbai, and Delhi etc. comes from business
travellers. This category also accounts for the major proportion of demand for five star or five
star deluxe hotels. However, against the total current supply of 96,000 rooms, five star category
accounts for just a quarter of the supply. With the expected growth in demand for rooms at 18%,
another 65,000 – 80,000 hotel rooms will be needed till 2010. This demand – supply gap is
expected to result in high level of activity in construction of hotels. The established brands in this
sector such as Asian Hotels, Indian Hotels, ITC, Le Meridian etc are in expansion mode with
many new players such as Accor Group, Marriot, Choice, IHG Group keen to establish their
footprint.
The upcoming realty trend in India after multiplexes and mega housing projects are the Special
Economic Zones (SEZ). Currently, 28 SEZs are operational in the country, including those
converted from Export Processing Zones (EPZ) to SEZ. Approx. 189 proposals have already
been granted approval since the SEZ Act, 2005 came into force. These include SEZs in various
segments such as multi-product, Information Technology, Bio-technology, Gems and Jewellery,
Textiles and technology intensive industries. Both developers and corporate have shown
tremendous interest in developing SEZs in the country. Reliance Industries, for instance, is
planning a 25,000 acre SEZ in Gurgaon and is also the main partner in twin SEZs coming up at
Navi Mumbai and Maha Mumbai, with a combined size of 35,000 acres. The Adani group is also
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setting up an SEZ at Mundra, covering 30,000-35,000 acres, and it proposes to invest Rs 7,300
core on infrastructure. Other corporate who are in process of setting up SEZs include TCG
Refineries of the Chatterjee Group (SEZ refinery at Haldia in West Bengal), Suzlon
Infrastructure (hi-tech engineering products and services near Coimbatore in Tamil Nadu, Udupi
in Karnataka and Vadodara in Gujarat), Hindalco (aluminium SEZ at Sambalpur in Orissa),
Genpact (IT SEZ at Bhubaneshwar in Orissa, Jaipur in Rajasthan and Bhopal in Madhya
Pradesh), Vedanta Alumina (aluminium SEZ at Orissa). Seeking the permission for SEZs is also
a number of real estate developers, including DLF, Ansals, Omaxe, Parsvnath, Shipra Estate and
Sunny Vista Realtors.
SOURCES OF INFORMATION
-- Indian council for research on international economic relations by Shankar Acharya
-- Rohit Gera, Executive Director, Gera Developers posted his article on Expressindia.com
-- Images Retail magazine, March 2009 issue
-- http://www.dtz.com/portal/site/en-in
-- www.inrnews.com/indianrealestate/reports/dtz_india_real_estate_overview
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Real estate Ahmedabad is divided into two core sectors that are residential and commercial.
Residential real estate sector mainly comprises of flats in Ahmedabad, apartments in
Ahmedabad, serviced apartments in Ahmedabad, bungalows in Ahmedabad, penthouses and
townships in Ahmedabad. Whereas commercial complexes include shopping malls in
Ahmedabad, multiplexes in Ahmedabad etc. it means an overall development is in full swing.
Ahmedabad is a spacious land and if you want to buy a property in Ahmedabad then it will
surely provide you good facilities be it educational or housing. In short your property will be
amidst the best state-of-art designed property. But the prices of properties in Ahmedabad vary
depending on the location and the facilities provided and also they keep on fluctuating from time
to time.
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The Promoters of NG Group are reputed and eminent ent repreneurs with required
resources in terms of investment capabilities and abilities to undertake the commercial
construction and development project of any size and dimension.
The Group has interest in InfoTech, Automobiles, Stock broking and Finance industry.
The Group has been providing customized solutions to the Government and reputed
institutions in the field of E Governance and smart card based solutions. One of the
Group concern is the sole dealer of GM (General Motors) in western part of Gujara t for
sales and services of cars and utility vehicles manufactured by them.
In line with Mission and objective statement, The Group concern NG Realty Private
Limited, is setting up a Special Economic Zone near Ahmedabad for Engineering Sector
in the first phase. The Group plans to expand the SEZ in near future to make it a multi -
product SEZ as per the Government policy and guidelines.
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Over the years, Iscon Group has built an enviable reputation for quality even as they built homes,
commercial centers or malls. Iscon Group goes beyond exceptional value, quality and customer
service to create a lifestyle that is rich in beauty, comfort and luxury.
The Group ensures investment of best talent, maximum energy & quality resources in planning,
design and implementation of projects. Best known for timely completion of projects,
architectural expertise, superior quality of construction & efficient property management; the
Group has pioneered the concept of centrally air-conditioned malls in Ahmedabad, Surat &
Rajkot.
Iscon Group has developed over 50 lakh sq ft of residential, office & retail space in Gujarat. It is
an ISO 9001:2000 certified organization and has also received an award from the esteemed Tata
Group for the quality & timely completion of projects.
Iscon Group has now acquired properties at prime location around the country including
Ahmedabad, Mumbai, Bangalore, Jaipur, Vadodara, Surat, Rajkot, Bhavnagar, Anand, etc for an
epic construction drive of Townships, Malls, Hotels, IT Parks, Residential & Commercial
properties.
They skilfully bring together hundreds of engineers and thousands of workers to complete
projects ‗on time‘, always maintaining an uncompromising focus on quality and safety. Setting
high benchmarks for ourselves, they have consistently broken new ground, achieved a long list
of targets and yet aiming high for betterment of lives.
They, at ISCON, are engaged in the property development, property management, and
relationship building, satisfying every customer‘s smallest of needs and developing exclusive
commercial and residential projects across the major cities of India. Having witnessed the
phenomenal infrastructure revolution in the country, they have applied the latest technology and
trends in all our undertakings.
FINDINGS:
Iscon group has their existence in both new and old Ahmedabad. This was one of the reason to
make their hotel in old Ahmedabad as they wanted to enter that area as well. Other reason behind
it was, 1- it is near to the air port, and 2- there are no five star hotel in that area. Location is
selected by the higher authority. They decide location as per the need of the project. They also
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keep flexibility and keep necessary changes as per the change in demand. Rates are decided as
per the location and format. Rates are decided before starting of any project, it increases with the
completion of the project. They have to follow the rules made by the government like AUDA as
per zone. They usually have their in-house engineers. They could not give us the information
about finance. According to them residential format will work in near future.
―It takes hands to build a house, but only hearts can build a home‖ & then…in true sense it will
be ―Ghar nu Ghar!‖
With this inherent philosophy of creating dwellings that bring heartfelt joy, four decades ago, in
the year 1967, Parshwanath Construction started realizing the dreams of millions by offering the
abodes that truly brought peace of mind for them.
Their journey, started with a sole mission to provide residential offerings to the people of
Ahmedabad, took another turn when it ventured into commercial construction arena with many
successful and noteworthy commercial projects. As the pioneers of in construction in
Ahmedabad, Parshwanath Group has adorned the city with more than 118 successful projects &
many novel & first of its kind initiatives. It was the first company in Gujarat to introduce mass
housing activities, with special repayment plans.
In the journey of 40 years, Parshwanath Group is associated with 120 glorious projects, 20,000
designed spaces, 1, 07, 00,000 sq.ft. Of built up spaces & 2, 60, 00,000 sq.ft of land
development. From one end of Ahmedabad to other end, every area bears testimony of unique
Parshwanath identity.
FINDINGS:
Being very old firm of Ahmedabad since 1967 they have spread in both old and new
Ahmedabad. They make every project as per the demand of the location. Location is being
decided as per the locality and income group. For example they have made metro city for royal
class people and Royal Park for middle class people especially for ONGC people.75% of
construction is done by them in Chandkheda.
They are able to send their projects at lower rate than other builder‘s reason behind it that they
have their own purchased land on which they are making their project which is not the case for
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other builders. They also have to follow government polices made as per the location. They
normally have their in-house engineers but they do hire them on contact basis if they want more.
Most of the finance is also in-house and if they want more then they can go for bank loan (no
particular bank). They are not much affected by the recession. They also said that SG high way is
most suitable for the five star hotels though it is far from the air port. According to them people
won‘t mind to travel if they get proper comfort and service. Residential is the format which will
work well in near future, as one person is having more than 1 house nowadays. Even commercial
format will also work as it gives more return than residential.
Pacifica companies started its Indian operation in 2004-05, with the head office in Ahmedabad &
regional offices in New Delhi, Bangalore, Hyderabad and Chennai. These offices are well poised
to meet their vision of establishing a national leading position in the real estate industry,
spanning the spectrum of all real estate development. Pacifica brings along with itself 30 years of
experience in real estate to India. With the rationalized Foreign Investment Policies in India, the
real estate/property developer has targeted several Indian Cities for its projects.
Declared as no.1 builder of the year 2005 in San Diego. Courtyard by Marriott in Ahmedabad is
the biggest 5 Star hotel in Gujarat in its category with 160 + rooms. Pacifica signed an MOU of
100 Cores for Courtyard Marriott during Vibrant Gujarat Global Investors Summit '07 with
Government of Gujarat & Tourism Corporation of Gujarat Ltd. (TCGL). Pacifica signed an
MOU of 1000 Cores for residential and townships, projects with Government of Gujarat during
Vibrant Gujarat Urban Summit '07. 1500 Cores Investments already done in various Projects in
India & other Projects Worth 1500 Cores are in pipeline.
FINDINGS:
Pacifica does not have any project in old Ahmedabad. They mainly have ample land in new
Ahmedabad, but they need to think what kind of project should be made. Rates are decided
before the project is made. AUDA has given them permission of R1 and R2 zone which are high
rise and low rise building resp. in certain areas. They are not interested to make any retail format.
They are fully into residential and hospitality. Their main target customers are upper middle
class. Right now they have 3 projects namely, hotel Country yard, Satellite; Green Arc,
Prahaladnagar and La habitat, Thaltej.
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They have their own team of engineers even they have own architectures and team which works
as their consultants. They use mix of their own and bank loan for the finance of any project.
Main source of loans are SBI, SEZ and FDI. They also agreed that they are affected by recession.
They prefer residential format to other formats. Reason behind it is they believe demand is still
there, everybody is looking for best price with best quality. Earlier there was culture of joint
family but now that has totally changed to nuclear family. The age of buyer has decreased and
come down to 25-40 years. According to them land in Maninagar area was more in demand then
it shifted to Ashram Road then to CG Road and right now it is SG Highway.
The company has a vision to go global envisaged through its current expansion, in different cities
of Gujarat and India, starting from Rajkot.
Currently the group consists of 25 companies, with aggressive marketing and efficient operation,
the group has forayed in the first five prominent positions among the real estate developers in the
city.
The organization sternly believes in making and sustaining relationships. It strongly believes that
relationship cannot be established on hollow things. It is the quality which has brought the group
to such an esteemed platform. The company follows stringent rules for quality assurance. Never
to compromise on quality irrespective of market conditions is a theme of the success is the motto
of the company. The group has been certified and has obtained ISO 2001 Certificate
from Bureau Veritas.
Shivalik Plaza, one of the landmark projects has been nominated in the category of best
commercial building for the year 2006 by G.I.H.E.D
FINDINGS:
Shivalik is totally into commercials format right now. Their preferable location for any project is
in new Ahmedabad for 2 reasons: 1) it is more expensive than old Ahmedabad. 2) They prefer to
have their project near their competitors. Their main motto is to make mindset of people that
they should come to their place by the name of Shivalik. They decide the height of project as per
R1, R2, and R3 area. Rates do not depend on zone. Higher building gives fewer amounts. The
whole team of engineers is of Shivalik. Their finance is not fixed. Sometimes it is of own;
sometimes of project loan (bank loan also depends upon market rates and project). They do not
compromise with the rates. They start making their project after at least 40-50% of the booking
is done.
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They choose the location as per the need of project. They also told that right now SG Road is the
place which is cheap and spacious than other area to build any project. Their MD decides which
venture should be made. They do not consider what others are doing. Being an ISO certified
company help them but on the other side they have to look for good management. According to
them mall is not for middle class as many people just come for roam around in the mall. Mall
concept will not work near future. The rates will be decreasing. Residential format will definitely
work. As per them everyday 4 families buy house. That is also right that there is more money in
commercial format but demand is more in residential format. Even government is also helping in
residential format.
At Savvy it is always their endeavour to provide value for money to their customers. They
believe in making safe, clean, efficient and technologically advanced buildings. They design
their buildings from inside out. Their focus is on providing sound building utility systems which
forms the backbone of their buildings.
FINDINGS:
The selection of land is done as per the requirement of project; it is mainly done by higher
authority. Rates are being decided as per the location of the project at the time of finalizing the
plan of project. They are also bond to follow the rules given by the government. They also have
their own team of engineers. They use mix of in-house and loan for finance of project it depends
upon project. They are also affected by the recession. They said residential and commercial is the
format which will be giving more returns.
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Bakeri - a name that spells trust, has given to Gujarat the nuances of architecture with three
generations. Set up in 1959, Bakeri is one of the oldest real estate developers in India. The
company has in its fold a team of skilled architects, civil engineers and contractors.
The vision of the company is to be able to live up to the expectations that the people have from
the Baker‘s, keeping in mind the fundamentals of providing a comfortable customer relationship
that ensures transparency, trust, quality, commitment and prudent business policies.
The brand speaks for itself. It was the first one in India to be awarded the highest PA-1 rating by
CRISIL for SAKAR-III project in October 1995. The Bakeris brought the corporate brand
buildings concept to Gujarat by bringing in the Sakar Series of branded corporate communes.
The Bakeris have introduced affordable housing schemes, with the aim to be able to reach out to
all sectors of society. They have experimented with new forms of architecture and built more
than 11 million square feet of exceptional architecture that symbolizes the city and its beauty.
The company brings with it knowledge and experience from the golden past and works towards
delivering a bright future to all its clients. It doesn‘t only build structures it also builds relations.
Dedicated architects, techno-savvy engineers and an experienced legal team form the nucleus of
Bakeri group. The people at Bakeri have blended creativity with utilitarianism to carve out
masterpieces that are today benchmarks in real estate development, office construction,
residential complexes, country resorts, industrial estates, etc.
FINDINGS:
Being an old company for more than 50 years they have spread their root to both new and old
Ahmedabad. Up till now their main focus was on residential which included townships, villas
etc. The selection of location is done by the demand in the market and target audience. Their
team will analyse these and on the basis of that they will select the land. Their rates are decided
as per the demand and location, client have to pay rates before the project is completed. Being an
old name it has got a brand name which is giving tough competition to Parshwanath. They have
their own team of engineers which look after every project. They did not give us information
about their finance. They also said that they are not much affected by the recession. According to
them real estate and commercial are two format which will be helpful to get proper return in near
future.
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Established in 1995, we at SAFAL have never believed in creating mere brick and mortar
structures. Instead, we believe in creating masterpieces in concrete woven around the great
outdoors and with plenty of nature‘s colours.
Their philosophy is described by their baseline, ‗beyond walls‘, which aptly depicts their value
offerings and commitment to innovations and quality. They believe that every structure be it a
home, an office or any other place where one spends time, should be replete with nature‘s
wonders. They believe in creating comfortable bonding by not shutting out nature but by being
surrounded with it. Reason why, all their projects --commercial, residential and plotted lands,
offer a tranquil home, a peaceful office or a serene retreat for all our customers.
Over 20 million sq. feet of land in & around Ahmedabad is filled with projects created by us.
Some of them have become benchmarks, not to mention. Their corporate client list includes
many prestigious names and so are our individual clients.
SAFAL has always believed in constructing innovative properties for its clients. Their logo, a
carving, has been a symbol for shelter and construction since time immemorial and represents
their commitment to the industry. Since their inception, we have grown steadily and rapidly but
have always maintained our focus on construction and improving quality of life through it.
Their group has seen many a business cycle long with catastrophe of nature such as earthquake.
They have survived all these challenges, because of their construction quality, integrity, honesty
and sheer determination.
Consistency has also been a key word at SAFAL. Over the years they have grown steadily and
rapidly, but they never lost our focus. They have always been committed in improving and
enhancing quality of life. Their approach is always customer friendly which has only improved
with time, and they still thrive to be the best.
FINDINGS:
Safal is working successfully in last few years in the market. The selection of land is done
through the higher authority. Rates are decided as per the project. They have to follow the
government rules as per the location. They have their own team of engineers and can hire from
outside if they require more. They could not give us information about finance. They also agree
that they are somewhat affected by the recession like other firms. They believe that commercial
is the format which will work in near future.
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FORMATS
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3. RETAIL INDUSTRY
The Indian retail market, which is the fifth largest retail destination globally, has been ranked the
second most attractive emerging market for investment after Vietnam in the retail sector by AT
Kearney's seventh annual Global Retail Development Index (GRDI), in 2008. The share of retail
trade in the country's gross domestic product (GDP) was between 8–10 per cent in 2007. It is
currently around 12 per cent, and is likely to reach 22 per cent by 2010.
A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer
market is likely to grow four times by 2025. Commercial real estate services company, CB
Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion.
Banks, capital goods, engineering, fast moving consumer goods (FMCG), software services, oil
marketing, power, two-wheelers and telecom companies are leading the sales and profit growth
of India Inc in the fourth quarter of 2008-09. India continues to be among the most attractive
countries for global retailers. At US$ 511 billion in 2008, its retail market is larger than ever and
drawing both global and local retailers. Foreign direct investment (FDI) inflows as on January
2009, in single-brand retail trading, stood at approx. US$ 25.18 million, according to the
Department of Industrial Policy and Promotion (DIPP).
India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion
by 2018, at a compound annual growth rate (CAGR) of 10 per cent. As a democratic country
with high growth rates, consumer spending has risen sharply as the youth population (more than
33 percent of the country is below the age of 15) has seen a significant increase in its disposable
income. Consumer spending rose an impressive 75 per cent in the past four years alone. Also,
organised retail, which accounts for almost 5 per cent of the market, is expected to grow at a
CAGR of 40 per cent from US$ 20 billion in 2007 to US$ 107 billion by 2013.
India has emerged the third most attractive market destination for apparel retailers, according to
a new study by global management consulting firm AT Kearney. It further says that in India,
apparel is the second largest retail category, representing 10 per cent of the US$ 37 billion retail
market. It is expected to grow 12-15 per cent per year. Apparel, along with food and grocery,
will lead the organised retailing in India. India has one of the largest numbers of retail outlets in
the world. A report by Images Retail estimates the number of operational malls to grow more
than two-fold, to cross 412, with 205 million square feet by 2010, and a further 715 malls to be
added by 2015, with major retail developments even in tier-II and tier-III cities in India
Source: http://www.ibef.org/industry/retail.aspx
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Indian organized retail market is growing at a fast pace due to the boom in the India retail
industry. In 2005, the retail industry in India amounted to Rs 10,000 billion accounting for about
10% to the country's GDP. The organized retail market in India out of this total market
accounted for Rs 350 billion which is about 3.5% of the total revenues.
Retail market in the Indian organized sector is expected to cross Rs 1000 billion by 2010.
Traditionally the retail industry in India was largely unorganized, comprising of drug stores,
medium, and small grocery stores. Most of the organized retailing in India have started recently
and is concentrating mainly in metropolitan cities.
The growth in the Indian organized retail market is mainly due to the change in the consumer‘s
behavior. This change has come in the consumer due to increased income, changing lifestyles,
and patterns of demography which are favorable. Now the consumer wants to shop at a place
where he can get food, entertainment, and shopping all less than one roof. This has given Indian
organized retail market a major boost.
Retail market in the organized sector in India is growing can be seen from the fact that 1500
supermarkets, 325 departmental stores, and 300 new malls are being built. Many Indian
companies are entering the Indian retail market which is giving Indian organized retail market a
boost. One such company is the Reliance Industries Limited. It plans to invest US$ 6 billion in
the Indian retail market by opening 1000 hypermarkets and 1500 supermarkets.
Pantaloons is another Indian company which plans to increase its retail space to 30 million
square feet with an investment of US$ 1 billion. Bharti Telecoms an Indian company is in talks
with Tesco a global giant for a £ 750 million joint venture. A number of global retail giants such
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as Walmart, Carrefour, and Metro AG are also planning to set up shop in India. Indian organized
retail market will definitely grow as a result of all this investments.
Indian organized retail market is increasing and for this growth to continue the Indian retailers as
well as government must make a combined effort.
Source: http://business.mapsofindia.com/india-retail-industry
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Growth of Retail Companies in India is still not yet in a matured stage with great potentials
within this sector still to be explored. Apart from the retail company like Nilgiri's of Bangalore,
most of the retail companies are sections of other industries that have stepped in the retail sector
for a better business. The Growth of Retail Companies in India is most pronounced in the metro
cities of India; however the smaller towns are also not lagging behind in this. The retail
companies are not only targeting the four metros in India but also is considering the second
graded upcoming cities like Ahmedabad, Baroda, Chandigarh, Coimbatore, Cochin, Ludhiana,
Pune, Trivandrum, Simla, Gurgaon, and others. The South Indian zone have adopted the process
of shopping in the supermarkets for their daily requirements and this has also been influencing
other cities as well where many hypermarkets are coming up day to day.
Source: http://business.mapsofindia.com/india-retail-industry
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Formats in Indian Organized Retail Sector and its subsequent successful operation are credited to
India Economic System reform earnest in July 1991. Formats in Indian Organized Retail Sector
are at its nascent stage. The Central Government has ultimately realized the need to remove the
insulation out of the Indian retail sector. Skeptics opine opening up Indian retail industry would
jeopardize way of income for the poor small retailers. In fact, the actual story is quite heartening
for the small time retailer and its vendors.
Source: http://business.mapsofindia.com/india-retail-industry
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SHOPPING MALLS
Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind
about the shopping malls is that it is a big enclosed building housing a variety of shops or
products. According to historical evidences shopping malls came into existence in the Middle
Ages, though it was not called so. The concept of departmental stores came up in the 19th
century with the Industrial Revolution. Consumers wanted a better shopping experience and this
demand gave rise to the emergence of shopping malls in India.
Originally the first of the shopping malls was opened in Paris. Then the trend followed in the
other metros over the world, and there was a spree of shopping malls coming up at various
places. In this age of mass production and mass consumption, the concepts of shopping malls are
most modern method of attracting consumers. The concept of shopping was altered completely
with the emergence of these shopping malls.
Shopping was no longer limited to a mere buying activity - it has become synonymous with
splurging time and money. People simply go about roaming through the shopping mall in order
to peep through the window of the shop and often ending up buying something they like. The
consumers desire a combination of comfort and suitability which the shopping malls cater to, and
so this format of shopping has become so popular all over the world, and especially so in India.
The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more
crowds to shopping malls that are considered family hangout zones.
The companies with superior resources would muscle out the ones inferior to them.
Monopolization of the organized retail sector
In India, the emergence of shopping malls has mostly altered the lifestyle of the consumers. With
the growth in income, changing attitudes, and also the demographic patterns favor the emergence
of shopping malls.
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The shopping malls favor a growth in the Indian organized retail sector by 10% within
2010
There would be different formats of shopping malls depending on the region.
GROWTH OF MALLS:
The Indian Retail Sector is booming and the growth of shopping malls is being seen as a clear
indicator of the economic prosperity in India. These shopping cum entertainment complexes are
getting bigger and better, sporting multiplexes and food courts to woo shoppers. Dominant retail
activity is visible in the top cities but tier II and III cities are also witnessing change.
Of late, global recessionary trends have not spared India, and its robust growth figures have
slipped to the region of 6%. Although India may not have been directly impacted, the global
trends have made the Indian shopper wary.
Source: http://business.mapsofindia.com/india-retail-industry
SUPERMARKETS
The concept of Supermarkets is not new to Indian consumers. Actually, the British colonial
government introduced the idea of Supermarkets to facilitate its officers with access of all
household goods under one roof. Supermarkets in India houses varied shops selling different
types of essential commodities along with luxury items. These Supermarkets are mainly
concentrated in urban areas or semi-urban areas. Supermarkets operating in India typically have
a heterogeneous mixture of large and small individual retailers. Most of these Supermarkets sell
branded products of both, domestic and international manufacturers. Supermarkets of India offer
products with different price bands for each and every sections of urban society.
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Source: http://business.mapsofindia.com/india-retail-industry
HYPERMARKETS
The concept of Hypermarkets is new to Indian consumers. Actually, the British colonial
government introduced the idea of Supermarkets to facilitate its officers with access of all
household goods under one roof. This led to the development of super-supermarket or modern
supermarket or Hypermarket. Hypermarkets in India houses varied shops selling different types
of essential commodities along with luxury items. These Hypermarkets are mainly concentrated
in urban areas only. Hypermarkets operating in India typically have a heterogeneous mixture of
large and small individual retailers. Most of these Hypermarkets sell branded products of both,
domestic and international manufacturers. Hypermarkets of India offer products with different
price bands for each and every sections of urban society.
Going to be the third largest economy in terms of GDP in next few years
It ranks high amongst the top 10 FDI destinations of the world
Fastest growing tourist market in Asia
World bank states, India to be world's second largest economy after China by the year
2050
Stable and investor friendly Central Government at the helm of affairs
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Till date the second largest employer after agriculture sector for the huge semi-skilled segment of
the Indian population
Electronic goods
Groceries
Vegetables and fruits
House hold items
Stationeries,
Pharmaceuticals and health care products
Consumer durables
Vegetables
Dress materials
Furniture‘s
Furnishings etc.
Delhi
Noida
Gurgaon
Hyderabad
Bangalore
Ahmedabad
Chandigarh
Reliance retail
Bharti-Wal-Mart retail
Source: http://business.mapsofindia.com/india-retail-industry
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CONVENIENCE STORES
The successful launch and operations of convenience stores in India is credited to the Indian
economic reforms in July, 1991. Convenience stores in India are still at a nascent stage but are
headed for stupendous growth in the near future. The central government has ultimately realized
the need to open up the Indian retail sector.
The key advantages of convenience stores in India are:
Specialty Stores
Supermarkets
Franchisee Outlets
Hypermarkets
Skeptics opine that liberalizing the Indian retail industry would jeopardize the income of small
retailers. However, small-time retailers and vendors also stand to gain from the launch of
convenience stores in India. Indian and international market leaders are flocking to the Indian
market to cash in on the specialty stores retail boom. Some industry leaders operating in other
sectors are also diversifying into the specialty stores sector.
Source: http://business.mapsofindia.com/india-retail-industry
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SPECIALTY STORES
Specialty Stores of India and its subsequent successful operation is credited to India Economic
System reform earnest in July 1991. Specialty Stores of India is at its nascent stage and heading
for a stupendous growth in the near future. The Central Government has ultimately realized the
need to remove the insulation out of the Indian retail sector. Skeptics opine that opening up of
the Indian retail industry would jeopardize the way of income for the poor small retailers. In fact,
the actual story is quite heartening for the small time retailer and its vendors. Both, Indian and
international market leaders are pouring into the Indian market to Ancash on the specialty stores
retail boom. In fact, some industry leaders operating in other sectors are also diversifying into
specialty stores sector.
Pantaloons,
Steel junction,
Metal junction,
Food bazaar,
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Scope Of Real Estate And Retail In Ahmedabad
Haldiram bhujiwala,
Music world,
Nokia world,
Sony world,
Khadims,
Adidas,
Bata,
Raymonds,
Ganguram,
KC Das,
Bausch and Lomb,
Apollo pharmacy,
Sifyiway,
Are doing good business and the profit margin of these Specialty Stores of India are rising every
year.
Source: http://business.mapsofindia.com/india-retail-industry
FRANCHISEE OUTLETS
Franchisee outlets in India are predominantly unorganized and considerably new in concept. For
an international company with a famous product or service to sell, Franchisee outlets can provide
huge opportunity for fast expansion and deep market penetration. Opening up of Franchisee
Outlets saves initial capital investment. Franchisee outlets in India can effectively help in the
distribution process of goods and services in lesser time but creating similar effects on balance
sheet. The greatest advantage of opening Franchisee outlets in India is that it offers full
commitment from franchisees. And as a matter of fact the franchisees are more committed than
employers or staff since they own a share of the main business and are accountable for losses.
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Macdonald's
Kentucky Fried Chicken
Subway
Monginis
Sugar and spice
Coca cola
Pepsi
Frito lays
Perfetti
Source: http://business.mapsofindia.com/india-retail-industry
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Strength:
1. Retailing is a " technology-intensive" industry. It is technology that will help the organized
retailers to score over the unorganized retailers. Successful organized retailers today work
closely with their vendors to predict consumer demand, shorten lead times, reduce inventory
holding and ultimately save cost. Example: Wal-Mart pioneered the concept of building
competitive advantage through distribution & information systems in the retailing industry. They
introduced two innovative logistics techniques cross-docking and EDI (electronic data
interchange).
2. On an average a super market stocks up to 5000 SKU's against a few hundreds stocked with an
average unorganized retailer.
Weakness:
1. Less Conversion level: Despite high footfalls, the conversion ratio has been very low in the
retail outlets in a mall as compared to the standalone counter parts. It is seen that actual
conversions of footfall into sales for a mall outlet is approximately 20-25%. On the other hand, a
high street store of retail chain has an average conversion of about 50-60%. As a result, a stand-
alone store has a ROI (return on investment) of 25-30%; in contrast the retail majors are
experiencing a ROI of 8-10%.
2. Customer Loyalty: Retail chains are yet to settle down with the proper merchandise mix for
the mall outlets. Since the stand-alone outlets were established long time back, so they have
stabilized in terms of footfalls & merchandise mix and thus have a higher customer loyalty base.
Opportunity :
1. The Indian middle class is already 30 Crore & is projected to grow to over 60 Crore by 2010
making India one of the largest consumer markets of the world. The IMAGES-KSA projections
indicate that by 2015, India will have over 55 Crore people under the age of 20 - reflecting the
enormous opportunities possible in the kids and teens retailing segment.
2. Organized retail is only 3% of the total retailing market in India. It is estimated to grow at the
rate of 25-30% p.a. and reach INR 1,00,000 Crore by 2010.
3. Percolating down: In India it has been found out that the top 6 cities contribute for 66% of
total organized retailing. While the metros have already been exploited, the focus has now been
shifted towards the tier-II cities. The 'retail boom', 85% of which has so far been concentrated in
the metros is beginning to percolate down to these smaller cities and towns. The contribution of
these tier-II cities to total organized retailing sales is expected to grow to 20-25%.
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4. Rural Retailing: India's huge rural population has caught the eye of the retailers looking for
new areas of growth. ITC launched India's first rural mall "Chaupal Saga" offering a diverse
range of products from FMCG to electronic goods to automobiles, attempting to provide farmers
a one-stop destination for all their needs." Hariyali Bazar" is started by DCM Sriram group
which provides farm related inputs & services. The Godrej group has launched the concept of
'agri-stores' named "Adhaar" which offers agricultural products such as fertilizers & animal feed
along with the required knowledge for effective use of the same to the farmers. Pepsi on the
other hand is experimenting with the farmers of Punjab for growing the right quality of tomato
for its tomato purees & pastes.
Threats :
1. If the unorganized retailers are put together, they are parallel to a large supermarket with no or
little overheads, high degree of flexibility in merchandise, display, prices and turnover.
2. Shopping Culture: Shopping culture has not developed in India as yet. Even now malls are just
a place to hang around with family and friends and largely confined to window-shopping.
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What was a mere trickle a couple of years ago are fast turning into a flood? Cautious till recently
on Gujarat, organized retail biggies are now turning on their investment taps in the state and it‘s
not just Ahmedabad but also Surat, Vadodara and Rajkot are on their shopping lists and SG
Road, Satellite Road, CG Road, Ghod Dod Road, Dumas Road, Parle Point, RC Dutt Road, Race
Course Road and Kalawad Road are fast becoming a part of their vocabulary.
While Pantaloon Retail India Ltd, which made an entry into Gujarat four years ago, plans to
pump Rs 100 core in adding 7 lakh sq ft of retail space over two years, eager debutants like
Piramyd Retail, Shopper‘s Stop and Dubai-based Lifestyle, too, are shopping big.
"Queries from players like Big Bazaar and Shopper‘s Stop are coming in, ―says Vadodara realtor
Sachin Shroff. Adds Vadodara builder Chetan Dedia: "Few years ago, no one had expected such
a drastic change in the retail scenario. Now it is not just big names with deep pockets, smaller
players are driving in too."
Swinging the pendulum in Gujarat‘s favor is easy availability of low-cost realty, rapidly
expanding cities and a good base of high spending consumers.
"Real estate cost is reasonable and building laws are conducive to good growth which is why
cities here have expanded faster than others like Pune and Hyderabad, ―explains Rakesh Biyani,
director, Pantaloon Retail India Ltd. Pantaloon, which had an initial plan to open a mall in
Ahmedabad only, now plans to take it to Surat (1 lakh sq ft) and Vadodara, where it has signed a
1.3 lakh sq ft space at Race Course Circle. Also afoot are a Big Bazaar each in Rajkot, Vadodara
and Surat, two more Pantaloons in Ahmedabad (SG Road and Maninagar) and one each in Surat
and Rajkot.
Ahmedabad Retail is the large format retailing development in India. These large format retail
outlets are on increasing and now more and more coming from retail big names. The Organized
retail big names like Amdavadi wallet, Piramyds, Shopper's Stop and lifestyle retailing were
launched their malls in Ahmedabad Retail Sector. As well as the chain retailers like Pantaloons
and Big Bazaar were already have multiple outlets in Ahmedabad. These companies are eager
turning on their investment taps in Gujarat.
Ahmedabad increased activity during this quarter across Retail Markets. The insisting for real
estate was first and foremost motivated by retail players. The demand for Gandhinagar-Sarkhej
Highway and C.G. road was primarily driven by medium and large size format spaces. The
demand and supply additions for shopping cum office spaces of nearly 3 lakh ft to 9 lakh ft are
probable in these areas. With extra supply inflowing into the market, the costs are probable to
steady in the medium term.
The Ahmedabad City has improved leasing actions in the last quarter, which is first and foremost
motivated by the retail sector. The tendency is probable to go on in the next coming quarters as a
demand for Retail Spaces. IT locations continue to remain floating. The Retail Market in
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Ahmedabad is observed a part in drift from pay for leasing. These Retail sectors, which are likely
to force retail growth in medium term, F&B, Apparel, Financial Services, Entertainment and
Jewellery. The retail market in Ahmedabad is familiarity go faster change from high street
retailing to organized retailing formats.
Source: http://www.ahmedabadretail.com
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Iscon Mall, located in West Ahmedabad, is one of the most popular malls in the city. All the
famous international and domestic brands in categories of garments, electronics, cosmetics,
accessories, shoes and more are housed under one roof. Westside, Reliance Mega Mart,
Revolution, Tommy Hilfiger, and Esprit are some of the brands available here. Two huge central
atriums are perfect areas to host festivals. Ample parking and escalators leading up from the
parking lot all make this a very convenient shopping destination.
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1. Location
2. Outlets
3. Ambience
4. Spacious
Factors of Attraction
10% 14%
46%
Location
30% Outlets
Ambience
Spacious
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1. < 500
2. 500-1000
3. 1001-2000
4. > 2000
Avg.spending(in Rs.)
16%
36%
<500
36% 500-1000
12%
1001-2000
2000>
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Ranking
6% 4% 2%
IsconMega Mall
26%
62% Himalaya Mall
Gallops Mall
Gulmohar Mall
Dev Arc Mall
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1. High Prices
2. Confusion between Atrium:1 & Atrium:2
3. Nothing.
48% 36%
High Prices
16% Confusion between Atriums
Nothing
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SWOT
Strengths:
Location
Good Brand Mix
Food courts and Gaming zone
Weakness:
Atriums 1 and 2 confuse people and therefore less number of people enter Atrium 2
Reliance Mart
Prices are high
Opportunities:
Threats:
Reliance Mart
Other Malls in vicinity
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People visit Iscon Mall because of its Location and variety of Outlets
According to them Iscon is a complete mall in terms of having all basic
necessities like food court, gaming zone and perfect brand mix
We found in our survey that around 30-40% people just come to spend time
Some students come here just to access free Wi-Fi
We saw that those who made purchases, their avg. spending was above Rs.2000
Many people come here just for food court
In our survey we found that more than 50% of the respondents preferred Iscon
over other malls
Most of the people suggest that the prices here are high
Also find difficulty in finding their preferred outlet because of Atrium 1 & 2
Few of them wanted some activities in the mall
The Map is difficult to understand
Around 50% of respondents are satisfied with the facilities provided by the mall
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Himalaya Mall is one of the most happening malls in the city of Ahmedabad located on Drive in
Road. A Pot-pourri of entertainment, shopping and food outlets makes it a Pièce de résistance.
National and International brands like McDonalds, Adidas, ADLABS, Big Bazaar, Croma, Peter
England, Planet M, Crossword, K-Lounge etc are present in the mall.
The BRAND mix of Mall lives up to its positioning as "One Mall Fits All" i.e. catering to all the
segments of the society. With a parking capacity of over 230 cars and 700 two wheelers, 7
escalators & 5 lifts, Special ramps & toilets for handicap, makes it one of the most convenient/
hassle free places to visit. On an average13000 and 80000 people throng the mall on a weekday
and weekends respectively making it the favorite hangout place
Himalaya Mall is a part of Himalaya Group promoted by Modi Build Well Ltd which is a well
established company in Building and construction in Gujarat since 1992.
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1. Location
2. Outlets
3. Ambience
4. Spacious
Factors of Attraction
10%
10%
50%
Location
30% Outlets
Ambience
Spacious
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1. 1.< 500
2. 500-1000
3. 1001-2000
4. > 2000
Avg.Spending(in Rs.)
13% 17%
<500
40% 30%
500-1000
1001-2000
>2000
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Ranking
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1. Parking Facility
2. International Brands
3. Nothing
30% 20%
Parking Facility
50% International Brands
Nothing
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SWOT
Strengths:
Location
Adlabs , Mc Donalds and CCD
Stores like Croma and Big Bazaar
Gaming zone
Weakness:
Opportunities:
Threats:
Recession
Unorganized retail outlets (Moonlight)
Brand awareness is less among people visiting the Mall
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GALLOPS
The 'GALLOPS', India's first designer mall is situated on Satellite Highway Cross Roads. The
'GALLOPS' spreads over 350,000 sq ft area with offering of almost 225,000 sq ft area is the first
mall of Ahmedabad.
'The 'GALLOPS' mall has been specifically designed to enable a large number of visitors to have
an interesting environment right through the day without any compromise of ease, comfort,
convenience or safety. By providing the best in shopping facilities in the city, the 'GALLOPS'
Mall promises to generate a lot of excitement amongst its patrons who are exposed to
international malls.
Four anchor stores such as Lifestyle, Max, Globus and Shoe Factory have made the GALLOPS
Mall already a 'MUST VISIT' place. The one of the most unique features of the Mall is its huge
parking space with facility to park over 700 cars.
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1. Location
2. Outlets
3. Ambience
4. Spacious
Factors of Attraction
10%
20% 50%
Outlets
20% Location
Ambience
Spacious
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Scope Of Real Estate And Retail In Ahmedabad
1. 1.< 500
2. 500-1000
3. 1001-2000
4. > 2000
Avg.Spending(in Rs.)
10%
40% 20%
<500
500-1000
30%
1001-2000
2000>
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Ranking
10% 5%
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1. High Prices
2. Less number of Outlets
3. Nothing.
30% 40%
High Prices
30% Less Outlets
Nothing
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Scope Of Real Estate And Retail In Ahmedabad
SWOT
Strengths:
Weakness:
Opportunities:
Threats:
Recession
Other Malls in vicinity
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GULMOHAR PARK
Gulmohar Park is the only mall by Retail Company i.e. Kshitij, which is the subsidiary company
of Pantaloons retail India Ltd. Gulmohar Park, is branded as lifestyle mall. Pantaloons and E
zone are its anchor stores. It has got unique brands like Sworski and Ethinicity which are the
only stores in Gujarat.
It is one of the better managed malls in Ahmedabad. It has perfect brand mix. Also the structure
is simple and attractive as a result people step in for the purpose of shopping rather than roam
around.
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1. Location
2. Outlets
3. Ambience
4. Spacious
Factors of Attraction
6%
20% 27%
Location
Outlets
47%
Ambience
Spacious
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Scope Of Real Estate And Retail In Ahmedabad
1. 1.< 500
2. 500-1000
3. 1001-2000
4. > 2000
Avg.Spending(in Rs.)
14% 6%
53% <500
27%
500-1000
1001-2000
2000>
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Ranking
7%
13% 40% Iscon Mega Mall
13%
Himalaya Mall
27% Gallops Mall
Gulmohar Park
Dev Arc Mall
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20%
47%
Gaming zone/Kids Area
33%
Sitting Place
Nothing
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SWOT
Strengths:
Weakness:
High Prices
No seating space
No facility of drinking water
Gaming zone for children not enough
Opportunities:
Threats:
High Prices
Recession
Other Malls in vicinity
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People visit Gulmohar Park because of its Location and Variety of Outlets.
We saw that those who made purchases, their avg. spending was above Rs.1500
People also said that the structure is simple, small and it is easy to locate outlets.
It being a Lifestyle Mall people comes in for shopping only and not to just roam
around.
Most of the People come in for Pantaloons.
Though it has outlets which are First in Ahmedabad (Swarovski, Ethnicity) people are
not aware of it.
Most of people said that there is no sitting place.
Also Drinking water facility is not there.
Parents also said that there should be Gaming zone/Kids area for the kids.
Few of the people said that prices are high.
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DEVARC MALL
Dev Arc Mall is situated on SG Highway. It is Mall which has a multiplex, retail and commercial
outlets. Its anchor store is Marks and Spencer and Bose. It is Mall which has everything for
people coming to visit it like food courts, theatre, gaming zone, events, etc.
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1. Location
2. Outlets
3. Ambience
4. Spacious
Factors of Attraction
27%
47%
Location
20% Outlets
Ambience
6%
Spacious
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1. 1.< 500
2. 500-1000
3. 1001-2000
4. > 2000
Avg.Spending(in Rs.)
6%
27%
27%
<500
500-1000
40%
1001-2000
>2000
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Ranking
10%
14% 40% Iscon Mega Mall
16% Himalaya Mall
20% Gallops mall
Gulmohar Park
Dev Arc Mall
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Ques: 4 According to you where does Dev Arc Mall need to improve?
1. More Outlets
2. Events
3. Gaming zone
4. Food courts
20%
15% Outlets
55%
10% Events
Gaming Zone
Food Courts
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SWOT
Strengths:
Location
Anchor store like Mark and Spencers and Bose
Cinemax
Commercial area
Weakness:
Opportunities:
Threats:
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Dev Arc is a complete mall with all Good brand mix, multiplex and food courts,
along with commercial area.
Also has stores like Mark and Spencers and Bose which very well known.
Location of Mall is good.
Had held activities for customers.
Though it is a good mall, but it didn‘t work because it was not marketed properly.
Also the stores were sold by the developer and the stores themselves had to
survive.
Also stores are not satisfied with the Mall Management.
India Bulls has also shut down.
Lots of Stores are empty.
On other had commercial area is doing well.
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We visited the following Standalone outlets at CG road, Ahmedabad. The data we found
are as following:
We started our survey with Levi‘s which is at CG Road, It is Asia‘s 3rd largest store in
terms of store size which is approx. 4500 sq ft. We found that sales at this store were
more as compared to its other outlet in Iscon Mall.
REASONS:
1. Its prime location i.e., being at a High Street.
2. Since years CG Road is known for its ambience and variety of outlet it offers.
3. Brand conscious segment of customers prefer this standalone outlet as it offer
latest and more varieties.
4. It gets customers who are just in mood of purchasing what they have come
for.
We found that this outlet of Pantaloon was doing best among all other
Pantaloons in the city.
We even found that Pantaloons in Abhijeet III was doing better in terms of
sales when compared to Pantaloons (Inox) at Vadodara.
REASONS:
1. Again reason was same, its prime location and it being a standalone outlet.
2. Talking to some customers we came to know, that they preferred a standalone
outlet of Pantaloons to its other store which is in Gulmohar Park and 10 Acre
Mall.
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It started from a tailor‘s shop of a meagre 250 square we are now a team of over
200 skilled workers working towards a common goal of excellence, a goal that
would be possible because it is a team.
Four in house brands namely Jade Blue, Jb Studio, Greenfibre, and Metal.
It‘s a grand store, covering 13000 sq. feet of area, at a prime location on C. G.
road of Ahmedabad.
Having started from a tailor‘s shop of a meagre 250 square we are now a team of
over 200 skilled workers working towards a common goal of excellence, a goal
that would be possible because it is a team.
Four retail outlets in the city, a few more coming up in very near future,
prominence in the fashion scene of Baroda and Rajkot, plans of strategic
expansion in other cities of Gujarat and the entire country.
REASONS:
Jade Blue produces in house labels which are totally different in design and
looks, which has resulted in its brand loyalty for some customers.
Its store has a wonderful ambience along with variety of price range which fits in
pocket of everyone.
They believe in maintaining good relationship with their loyal as well as new
customers by serving them in respectable manner.
Westside: Abhijeet – V
Established in 1998 as part of the Tata Group, Trent Ltd. operates Westside, one
of India's largest and fastest growing chains of retail stores.
The Westside stores have numerous departments to meet the varied shopping
needs of customers. These include Menswear, Women‘s wear, Kid‘s wear,
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Trent ventured into the hypermarket business in 2004 with Star Bazaar, providing
an ample assortment of products made available at the lowest prices, aptly
exemplifying its ‗Chota Budget, Lambi Shopping‘ motto.
.
Pepe: CG Road
According to its store manager, he told us that both outlets of Pepe are doing well
in Ahmedabad.
He even told us that upto 40% of customers in Ahmedabad are Brand conscious,
they will never get attracted to discounted formats.
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REASONS:
Format like UCB is not known by everyone; even the brand awareness is quite
low with the customers.
But slowly they are coming up with different varieties and formats like UCB Kid,
UCB Adult etc.
Being an international brand it is doing better than other famous international
brands like ESPIRIT.
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CONCLUSION
In Ahmedabad we found that standalone outlets were doing better when compared to Malls.
Reason being improper management and oversupply of malls. We also found that S.G Highway
is over supplied by Malls, because of which footfalls are being shared and therefore none of the
Mall is doing good. Also one of the reasons of Malls not doing well is Recession, which has
affected nearly every sector.
Malls will surely do well in near future only if they are less in number, proper management and
proper brand mix. Also city like Ahmedabad demands such format of Shopping because in
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whole country organized retail has gained good momentum and Ahmedabad is one of the target
cities which can surely cater to this format.
QUESTIONNAIRES
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For Customers:
Name: _________________
Age: ____Occupation:_____________
Area of Residence: __________________
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---------------------------------------------------------------------------------------------------------------
Q4 Rank the following Malls. (1 – Most preferred and 4- least preferred)
_____Gulmohar Park
_____Iscon Mega Mall
_____Gallops
_____Himalaya Mall
_____Devarc Mall
__________________________________________________________________________
________________________________________________________________________
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Appendix
AHMEDABAD: Indian malls, like their US counterparts, are loosing brands to high street.
Retailers grappling with issues of viability, visibility
And branding is now quitting malls. Recent months have seen a gradual, but noticeable exodus
of brands from malls to single-format stores on high street.
This trend has added to the stagnant spaces in new malls, which have already been finding it
difficult to get initial bookings from retailers. According to a report by global real-estate
solutions firm Cushman & Wakefield (C&W), the mall vacancy rate in urban India touched a
high of 16% by the end of 2008.
The survey was carried out across eight major cities—NCR, Mumbai, Kolkata, Ahmedabad,
Bangalore, Chennai, Hyderabad and Pune. The reports attribute the vacancy levels to
inconsistent mall supply and revival of the high street as the most sorts after retail destination.
The highest level of vacancy in malls was witnessed in Delhi and Pune, with vacancy levels of
24% and 15%, respectively.
―There is a gradual but noticeable exodus from malls to single-format stores on high street.
Today, retailers seek viability in stores and give lesser importance to stores for branding
purposes,‖ says JLLM (Jones Lang LaSalle Meghraj) MD (retail) Shubhranshu Pani.
―The retailers are preferring the high street because of higher visibility, independent access and
the greater comfort level as compared to the malls,‖ Cushman & Wakefield retail services
director Rajneesh Mahajan adds.
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Emergence of Malls
- By Deepak Verma
Source: http://www.coolavenues.com/images/deepak-malls-1.gif
Malls as we understand, is a form of organized retailing. They lend an ideal shopping experience
with an amalgamation of product, service and entertainment, all under a common roof. Before
going into the details of emergence of malls, let's see how the Indian retail sector has evolved
over the years and how the concepts of malls came into being.
The era of rural retail industry could be categorized into two formats: weekly markets and village
fairs. Primarily, weekly formats catered to the daily necessities of villagers. Village fairs were
larger in size with a wide variety of goods sold from food, clothing, cosmetics and small
consumer durables. The traditional era saw the emergence of the neighborhood 'Kirana' store to
cater to the convenience of the Indian consumers. The era of government support saw indigenous
franchise model of store chains run by Khadi & Village Industries Commission.
The KVIC has a countrywide chain of 7000 plus stores in India. This period also witnessed the
emergence of shopping centers with car parking facility. The modern era has a host of small and
large formats with exclusive outlets showcasing a complete range of products. The department
stores and shopping malls targeting to provide a complete destination experience for all segments
of the society. The hyper and super markets are consistently trying to provide the customer with
the 3 Vs (Value, Variety & Volume). Over the last three years, this sector has witnessed an
exorbitant growth due to the establishment of numerous international quality formats to suit the
Indian purchase behavior, the improvement in retail processes, the development of retail specific
properties and the emergence of both domestic and international organizations has witnessed the
emergence of malls.
The story of great Indian mall boom started from the emergence of Gurgaon, a sleepy little
suburb of Delhi. In a development that surprised many town planners, Gurgaon transformed
itself overnight by first housing the headquarters of many multinational corporations and banks,
and then calling itself the "shopping-mall capital of India".
Each mall in Gurgaon is about 300,000 square feet in size, with every leading retailer, or, to use
a trade parlance, "anchor", occupying anything between 60,000-80,000 square feet.
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It is not just the north of the country that is seeing a furious construction of malls.
Visakhapatnam, a fast-growing city in the southern state of Andhra Pradesh, is witnessing a huge
demand for shopping malls. The biggest of them, CMR Shopping Mall, occupies 60,000 square
feet over five floors. The throngs of buyers who visit the mall are working class and office
employees of the numerous public and private sector outfits that are based in Visakhapatnam.
Similarly, Ahmedabad in western India is slowly becoming a magnet for shopping malls. More
than half a dozen malls have sprung up in Ahmedabad, known as a fading city of dying textile
mills until a few years back. The biggest of them, aptly called Super Mall, occupies a gargantuan
90,000 square feet and has 200 shops in its folds.
But the biggest mall-construction activity in India is taking place, as expected, in Mumbai, the
country's financial and business capital. In all, 25 malls are under construction, each measuring
anything between 90,000 and 600,000 square feet. A hefty Rs. 4 billion (US $87 million) is
being pumped into these projects by 20 investors. About a dozen malls are already up and
running in the up-market south side of the city, as well as the down market distant suburbs.
The anchors that first pull the crowds here - and at other malls all over the country - are as varied
as they come. There are the US and European chains such as McDonald's, Lacoste, Pizza Hut,
Benetton, Subway, Marks & Spencer and Mango.
Their success has spawned the emergence of successful Indian chains such as Pantaloon, Globus,
Shoppers' Stop, Giant, Lifestyle and Big Bazaar. Stores named after popular branded
merchandise also act as effective anchors. These include the likes of Tommy Hilfiger, Swatch,
Arrow, Louis Vuitton and Nike.
Foreign mall operators cannot enter India as foreign companies are not allowed to own real
estate in India. Companies like Nike, McDonald's and Reebok sell at mall outlets through their
Indian subsidiaries or franchisees. McDonald's, for example, has appointed two master
franchisees in India, and these in turn have appointed numerous sub-franchisees all over the
country. A sub-franchisee, therefore, could open a McDonald's outlet either as a stand-alone
store or as one of the many stores in a mall.
Making the job easier for the anchors is a gradual change in the Indian economy from a
socialistic to a capitalistic one. This has led to a rise in the numbers of middle-class consumers,
their wallets stuffed with more disposable income. According to one estimate, over the past three
years, consumer spending has increased at a respectable rate of 12% per annum.
Another reason for the ongoing boom in mall activity is the opportunity to retailers for a greater
accessibility to real estate at affordable prices. Part of this is due to easier availability of bank
and institutional finance. And in places such as Mumbai, the freeing up of much-needed real
estate. This has happened with the many closed textile mills in the central part of the city now
being allowed to exploit their real estate for other commercial purposes. Investors are attracted
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by the 14% returns in the malls business, compared to 11% in the office segment and 6% in the
residential segment.
For the young crowd, malls have become areas in which to "hang out", to catch up with friends
in stores like Cafe Coffee Day and Barista, each vying to be the Starbucks of India. There's also
an entertainment factor, with more and more of the youngsters beginning to see shopping as an
enjoyable passtime.
After a long time we are witnessing real estate developers taking pride in reducing or slashing
rates in Mumbai, Thane and Navi Mumbai to Ancash on the existing demand in the real estate
market.
The good deals may be offered for a few weeks or for the first ten properties or for a killer deal
for a time-bound two days or similar schemes but yes, the writing is clear on the wall that the
willingness to connect with the "real" pricing has dawned on the developers to sell at reduced
prices to encourage more and more sales.
With the new UPA government there are a lot of hopes and it will be interesting to see how the
next few months unfold for the property market. We still need a great deal of transparency to be
infused in the way we deal in the property market.
The sales teams in the builder/ developer offices are at their all-time creative best with sales
tactics. This is also a good sign and a dawning that if the wheel stops there will be a crisis of
sorts of the kind witnessed earlier this year, when sales plummeted big time.
They now understand clearly that with buyers unwilling to relent on unrealistic pricing, there is
an even greater need to price competitively, maybe with a lower profit margin, than holding on
to the price and project as the interest meter runs. The mantra for developers in the present times,
I guess, is to be aware of the markets (realistic demand and supply) and the competition, which
the buyers know today.
For a buyer to understand the market more clearly before making a decision he/she must
understand at which juncture the market is hovering; also, with fresh developments in the
political arena, what the impact will be in coming months. An important point to note would be
that, yes, there has been a correction up to 15 to 30% already in the market post December 2008
and prices have come to September 2008 levels, which were already high in any case and up on
account of the festival demand which happens nearly post monsoons by default.
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After a correction, slowdown, or a 30% reduction, one should not expect the markets to gallop
again, but the next couple of years at least will be stable, as after a correction you cannot go up
again quickly. With a stable government we can expect more rational policies but a stock market
kind of jerk in prices will be unrealistic in the property prices and may be termed speculative. Let
us be sensible for once; just when things have just started moving a little, let us not think of
killing the golden hen and taking out all eggs at one time.
A good 2BHK in the suburbs is not less than Rs 6 to 8 million, which is not cheap by any
standards. Our city still does not have the appropriate infrastructure to support high pricing in the
suburbs, especially with connectivity issues, and with a lot of developers under a liquidity crunch
it is essential to send out the right signals. The buyer today is under tremendous pressure even
when it comes to documentation and with many banks tightening the belts on approvals, it is
essential to invest in a project which offers 100% complete paperwork.
All of us know that with the archaic legal systems we live in, there are always loose ends
somewhere and this is one area all developers should focus on. Nearly 78% of buyers in today's
market would opt for a loan to procure the new property and most would prefer a loan to-value
ratio (LTV) of around 80-85%, which typically means that if the title is not clear and
transparency of the paperwork is missing, the deal will not happen.
The uncertainty and fear factor still weighing heavily on a buyer's mind gets manifested in the
fact that 59% of respondents on a survey would like to buy only a ready possession property or a
property nearing completion as past trends have shown delays in construction.
With the current economic slowdown, they are more concerned today about possession
timelines. Only about 20% home buyers are keen to invest in properties at their launch stage at
attractive prices, and even that, only of selective developers who have a track record. This is as
per a survey that a leading bank conducted after the recent Thane exhibition. The developers
need to work very hard to win this confidence.
In order to capture the client who is looking to buy a home in today's market conditions, one
should look at microanalysis on both demand and supply first. The maximum demand is in the
price range of Rs 40 lakh, going up to the Rs 1 core bracket, and that too, for ready-to-move into
homes.
Looking at the buyer's mind, if he is looking at Malad, he wants to try to find a house in Andheri,
or similarly, if he is looking at Navi Mumbai, he wants to experience Chembur or Ghatkopar or
any other location where he can compromise and get it within a particular price range.
Of course, when he is out on the field he wants to know if rates have bottomed out in the
location, project or surrounding location. This typically means a delayed decision of the
informed buyer; from the time he puts together his first potential shortlist, it can easily be a
period of a month or two. If builders start telling them they will increase prices, they will go to
the nearest competitor. In a buyer's market, they know they can pit one against the other.
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The coming weeks will be interesting, with stock markets climbing, recession clouds
disappearing and the hopes that the new UPA government will bring in fresh policies for the
housing industry. With all this, there is a strong chance that there may be a great deal of
movement during the Diwali period.
The cycle had slowed down in Diwali 2008 and can come back with a bang September 2009
onwards, but this depends on prices being stable. It may be an opportune moment through the
end of the year to sell as much and increase liquidity and focus on new projects. So, let us hope
with this competition, the buyer encases.
(Sandeep Sadh is CEO, Mumbai Property Exchange. The views expressed are personal.)
MUMBAI: An economic slowdown is prompting India's retailers to sharpen their focus, while
foreign firms are pausing after scrambling to enter a
Market named most attractive retail destination three years running.
As economic growth picked up to more than 9 per cent in recent years, a swelling middle class
attracted big Indian corporate such as Reliance, Tata Group, Aditya Birla group and Bharti
Enterprises to the retail sector.
Global retailers Wal-Mart, Tesco and Germany's Metro AG also felt the pull.
But the lure has dimmed as economic growth has slowed to below 7 per cent and spending has
tightened.
Retailers are closing stores, curbing spending and repositioning themselves to ride out the tough
times. But the shake-out should leave the sector in a stronger position to take advantage of any
rebound in growth, analysts say.
"This will test the resilience of business models and operational efficiencies. Players who can
continue to attract consumers with attractive discounts and maintain efficiencies in the system
will emerge winners," Edelweiss analyst Priya Ayyar said in a report. "We expect value retailers
like Pantaloon Retail to fare better."
A T Kearney, which ranked India the most attractive retail destination from 2006 to 2008 in its
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annual Global Retail Development Index, last year valued the Indian retail market at $511
billion.
It sees this rising to $833 billion by 2013. But in a market dominated by small-scale owner-
operators, often using basic and temporary premises, organized retail is estimated at less than 5
per cent, offering huge potential for growth.
CHANGING STRATEGIES
Subhiksha Trading Services, which operated about 1,600 discount stores across India, ran out of
cash last October. The unlisted company's operations are nearly at a standstill and it is
undergoing a "debt restructuring exercise."
The setback for retailers in India is seen as a necessary one after companies opened outlets at a
furious pace in unviable locations at exorbitant rents, charting out ambitious expansion plans
relying on debt.
"They will now look at how to run a fundamentally sound business with a proper store format,
proper location and headquarter support," said Anand Raghuraman, partner and director at
Boston Consulting Group (BCG).
Retailers are starting to put their houses in order. India's largest listed retailer, Pantaloon Retail,
faced with falling sales in various products and high inventory costs, is reworking its strategy.
It is focusing on cost and supply chain efficiencies, high-margin private labels, better credit
terms and prices from vendors and re-negotiating lease rental agreements, Fitch Ratings said.
Pantaloon sales, which dipped in February from the previous month, saw an uptrend in March
due to aggressive discounts and promotions. Its shares have risen some 60 per cent from a record
low hit on March 9.
Despite slowing sales Pantaloon Retail still figures in buy recommendations by brokerages.
Cash-strapped Vishal Retail is closing stores and has no plans to open more next year, but will
expand through the franchisee route, says Manmohan Agarwal, Chief Executive, Corporate
Affairs.
British retailer Marks and Spencer, facing falling sales at home, is repositioning itself in India,
and is looking at larger format stores to attract more people.
"We have not been able to take advantage of the opportunities we had so far," said Nandini
Sethuraman, head of marketing at Marks and Spencer, India.
Bigger stores with a good catchment area are seen attracting more customers, she said. "Lower
rentals help us identify more viable properties."
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Others are more cautious -- Britian's Home Retail pulled out of an Indian mail-order catalogue
venture in January because its expectations had not been met.
French retailer Carrefour, which, media reports say is searching for a joint venture partner for its
India retail operations, plans to open its wholesale outlets in the country by the end of 2009 or
early 2010.
OPTIMISM
India's retail sector has been growing at 30-40 per cent annually over the past decade, according
to KPMG. It is now expected to grow at a more sedate 15-20 per cent for the next 2-3 years, but
the India retail story is still intact.
Real estate rentals, a high component of cost, have fallen by up to a quarter from their peaks in
November 2007, which will work in the retailers' favour, analysts said. Consumer spending
meanwhile is expected to pick up later in the year.
Analysts say the economic slowdown is likely to lead to more focus on value-retailing in
clothing and food in coming months and a shift away from lifestyle retailing, a strategy that
should benefit local retailers.
"Value-retailing players like Pantaloon, Reliance, etc, are more likely to benefit in the current
scenario than lifestyle players like Shoppers Stop," Angel Broking said in a report.
Reliance Retail, a subsidiary of top conglomerate Reliance Industries Ltd, had announced plans
in recent years to spend more than $5 billion to roll out hundreds of supermarkets across India.
Though a thin margin business, the food and beverages sector is seen doing well, BCG's
Raghuraman said.
Nestle, with its wide portfolio of products including the popular Maggie noodles, is seen
enjoying brand preference.
"The segment which Nestle caters to is unlikely to see any down trading," broker K.R. Choksey
said in a report.
Overseas retailers are still keen on India but prefer to wait for a year or more.
Restricted foreign investment in Indian retail puts off overseas firms, who prefer coming in on
their own. Single brand foreign retailers are allowed to take up to 51 per cent in a venture with a
local firm, while multi-brand retailers are limited to franchise or license operations.
"The demographics ... are there, there is still opportunity," said Anshuman Magazine, Chairman
and MD, CB Richard Ellis, South Asia Pvt. Ltd.
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Reduction in Rent
This could be the flip side to the slowdown story which modern retailers are welcoming with
open arms. At a time when growth has slowed down, large retailers like the Future group,
Reliance Retail and Aditya Birla Retail are in the midst of furiously renegotiating rentals to bring
down costs. A correction in the real estate industry has been long overdue, and taking advantage
of the situation, modern retailers have called a war on costs to tide over the slowdown. Most of
the modern retailers either purchased or rented properties at the peak of the real estate market.
This has seriously dented their ability to make profits from the retail business, especially at the
time of an economic slowdown.
Said a Reliance Retail spokesperson: ―We are actively renegotiating rentals across formats and
hope that, on an average, this would bring down costs by about 20%-30%.'‘ According to Pranay
Vakil, chairman of of real estate services company Knight Frank: ―The headroom for reducing
rentals could be anywhere between 10-35%. In exceptional cases, it could even go up to 40%.
The exact amount would depend on the location.'‘ Aditya Birla Retail, which is expected to more
than double its turnover from Rs 500 crore last year to Rs 1,200 crore this financial year, is quite
clear that if a real estate owner does not bring down the rentals of a certain store, it would not
hesitate to relocate.
―We hope to garner a very sizeable amount from renegotiating rentals. We are hopeful there will
be softening of rentals. If this does not happen, in certain cases we will move out if the rental to
sales ratio is not good enough,'‘ said Thomas Varghese, CEO, Aditya Birla Retail. There are
nearly 660 stores under Aditya Birla Retail, which has relocated or closed down some 50-odd
stores since September 2008, due to various reasons, including the fact that these stores did not
fully meet good retail principles –such as right location, right catchment area — or were weighed
down by high rentals.
For leading retailer the Future group, group rentals account for 6% of sales. It plans to bring this
down by another percentage point or so in the immediate future. ―Given that all the players are in
the midst of renegotiating rentals, among other plans, to tide over the current slowdown, we are
also trying to bring it down, even though we are already on the lower side,'‘ said Kishore Biyani,
CEO, Future group. Biyani said that since most of its properties were signed in a different era,
the group has benefitted from this. The Future group is currently collaborating with developers to
work out a win-win model and a revenue sharing deal. According to commercial real estate
services company, CB Richard Ellis, India‘s retail market is currently valued at $511 billion.
Organised retail currently accounts for less than 5% of the total retail market.
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The serial bombings in Bangalore and Ahmedabad through Friday and Saturday hit weekend
sales at retail hubs of these two cities as several shopping malls were ordered to shut early and
people were kept away fearing more explosions. Retail trade was also hit in other parts of the
country, but to a lesser extent.
―There has been a definite fall in business especially in areas such as Bangalore, Ahmedabad,
Gujarat and Surat,‖ said Rajan Malhotra, CEO of Big Bazaar. ―We were asked to shut our stores
early in Indore and Surat. Overall, there was a 10 per cent fall in business as apart from fear
psychosis, business also got affected due to heavy rains in many major cities.‖
Grocery and food retailer Subhikha saw a 20 to 30 per cent drop in footfall at its stores in
Bangalore and major cities of Gujarat, but elsewhere business was as usual, said R Subramanian,
managing director of the company.
Vishal Retail, which is mostly into apparels and home furnishing, said its sales were down 20 to
30 per cent compared to a normal weekend.
The drop in visitors is the most immediate impact, but in the longer run retailers have to step up
security-related spending, including insurance cover against terror attacks.
―We spend close to Rs 14-15 crore on security every year,‖ said Subramanian. ―We also have an
insurance policy in place worth about Rs 1,500 crore.‖
Shoppers Stop, which has not yet taken any specific insurance policy against terrorism, said it is
reviewing its security needs. ―We have made all the necessary investments we needed to for
purpose of security,‖ said BS Nagesh, managing director of the company. ―We will be in
discussions today to take appropriate decisions to beef up security.‖
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These shoppers do not spend money at the mall. They are a new breed of tourists who hop from
mall to mall ‗just to see‘ what it is like or simply to beat the heat in the fully-air-conditioned
atrium.
They are different from the youngsters who hang out at malls with friends or frequent the food
courts. Most people seen at the Iscon Mall, which houses Reliance Mart as well, are either
tourists from other cities or local people visiting the mall for the first time, shop-keepers admit.
―We have just come to see what it is like here. When we came to Ahmedabad, people told us that
this was a must-see place, as it is the biggest in Asia,‖ said Ms Geeta Parikh of Jamnagar,
visiting the mall with her son.
The retail scene of Ahmedabad, which used to be concentrated on the business artery of CG
Road, has begun to shift to other areas of the city, of which SG Highway is one. Malls such as
Big Bazaar, Dev Arc and Vishal Mega Mart are jostling for space on the Highway, leaving the
customer spoilt for choice. That is the reason why some of the malls, such as the 3.5 lakh sq.ft
Gallops, set up at an investment of Rs 80 crore, wear a deserted look. ―As many as 50 per cent of
the shops have shut down here. Of the 12 outlets opened two years ago at the food court, only
four are operational today,‖ says painter Mohsin Shaikh, whose art gallery Spandan is located on
the second floor of Gallops.
He has an interesting theory about retail in Gujarat. ―People in Ahmedabad are new to mall
culture and mostly prefer shopping from places they are comfortable with,‖ he says. For
instance, if a customer living in Maninagar wanted to visit Gallops he would have to cross
Manek Chowk, Lal Darwaja, C G Road, etc, all of which are major shopping destinations where
he would get whatever he wants at a lower price than in a mall on the highway; moreover, he
could even bargain at the shops. If this theory holds good, then, it would mean good footfalls,
with lower conversion to sales.
He goes on to add, ―Mostly, the retail outlets that are shutting down are small brands. The
national retail chains situated at the outskirts of the city are thinking of 10 years down the line,
when real-estate prices will soar. The city will also expand, bringing the customers closer to
them.‖
As spiralling inflation dents buyer sentiment, leisure and entertainment forays seem to be big
retailers‘ weapons to fight flagging sales.
Leading the way is Kishore Biyani-led Future Group that is opening unisex salons, gaming
centres and family entertainment centres at its nine Big Bazaar Supercentres. Similarly, Vishal
Retail is planning to start salons within the premises of its 120-odd outlets.
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Shoppers Stop has introduced its brand of cafes, bookstores and spas within its stores to make
consumers spend more time and entice them to buy more.
Shoppers Stop vice-president (marketing) Vinay Bhatia feels such options are important to retain
customers. ―A customer now looks for more than just shopping. We realise that convergence of
retail and entertainment is the way to enhance a shopper‘s experience. We are constantly trying
to get things that are ‗shopping plus‘. So we have Crossword, our bookstore, Cafe Brio &
DesiCafe and other such specialty stores within Shoppers Stop stores to enrich consumer
experience.‖
The Raheja Group-promoted Shoppers Stop is putting its best foot forward to attract shoppers.
The company has added small spa centres, allowing consumers a quick foot massage. Then there
are bookstores and cafes along with several other initiatives to attract customers and make them
spend more time inside the store. It has also introduced a ‗Monsoon Makeover‘ offering that
promises free makeover for people who walk in.
Following suit is Vishal Retail that will begin by opening salons within the premises of its stores.
Says Vishal Retail chairman RC Agarwal, ―The initiative is in the planning stage. There is a
definite market for these services.‖
Spencer‘s Retail is also going the extra mile to ensure visitors stay longer and are entertained
well. Across the stores, there are live kitchens on weekends that have Japanese, Thai and Italian
chefs.
Then there is Books & Beyond, Spencer‘s brand of bookstores that has periodic book reading
sessions and launches. Stores are also lined with interactive LCD screens that have both original
and borrowed content entertaining people.
―We do a business of Rs 100 crore every month. This is 5% of our revenues. Today, consumers
expect to feel relaxed and entertained. This is important for a chain like ours that wants to be
differentiated. This concept, however, may not have much potential with discount chains,‖ says
Spencer‘s Retail marketing V-P Samar Singh Sheikhawat.
There are still others like Subhiksha Retail MD R Subramaniam who think it wise to continue
retailing what they currently do. ―We are staying focused on what we sell, groceries, mobile
phones and medicines. There will be a foray into consumer durables and IT products soon.‖
Gaining Share
Future Group is opening unisex salons, gaming centres and family entertainment centres
at its nine Big Bazaar Supercentres.
Vishal Retail is planning to start salons within premises of its 120-odd outlets.
Shoppers Stop has introduced its own brand of cafes, bookstores and spas within its
stores to make consumers spend more time at the store and entice them to buy more.
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Spencer‘s Retail has set up live kitchens and book stores to ensure customers spend more
time.
Smaller players like Subhiksha Retail think it wise to continue retailing what they
presently do.
―During inflation, customers always prefer to shop in a value retail outlet,‖ says K E
Venkatachalapathy , business head of Megamart. The increased footfall is reflecting in the sales
figure of Megamart as well. While he refuses to divulge exact numbers, Venkatachalapathy says
there has been a 20% increase in sales compared to the corresponding period last year. Discounts
here vary from 10% to 30%.
―Inflation and discount retailing are directly proportional. Customers normally tend to flock to
value retail stores where they are assured of good quality at reasonable prices,‘‘ says Raghunath
Narayanan, MD of Chennai based discount retailer Europa.
The Loot, a discount chain, has seen footfalls increase by at least 10% in the last few weeks
across its 35 stores in 15 cities. ―In Mumbai alone, our footfalls are up by 17% in the last three
weeks. In the first quarter, we had sales of Rs 15 crore. In the next quarter, we expect this to
climb upto Rs 25 crore,‖ says Jay Gupta, MD of The Loot.
In apparel, children‘s wear seem to be the biggest beneficiary. ―As children, especially toddlers,
normally outgrow their clothes pretty fast, parents are flocking to discount stores such as ours
more than ever before,‖ says Narayanan. While the discount offered by Europa is between 25
and 30%, in kids wear it‘s 30% - 40%.
The consumer base is also widening. ―From largely middle class audiences, I now see people
getting out of cars like Honda Accord and Mercedes Benz outside our stores,‖ says Gupta. The
rush to such outlets is also due to the fact that regular apparel retailers and multi-brand outlets
mostly offer off season sale only twice in a year. ―But in times of inflation and continued price
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rise, the consumer is looking to cut spends across categories on a daily basis,‖ says
Venkatachalapathy.
Brand Factory too has seen a 5% - 7 % increase in our sales over the past few months. ―While
we cannot say that entirely due to inflation, we cannot rule out that it has played a role,‖ says
Vishnu Prasad, CEO of Brand Factory.
Sources said Hamleys and Reliance have struck a franchise deal to open large format stores. ET
first reported on the discussions between the two players on March 21. Reliance Retail is
believed to have pipped the Wadias and Kishore Biyani‘s Future Group in snapping up the deal.
The Mukesh Ambani-led Reliance and the Icelandic investor Baugur Group-controlled Hamleys
are expected to make a joint announcement shortly. Reliance had also explored an arrangement
with the US chain Toys ‗R Us before deciding to strike a deal with Hamleys.
Hamleys‘ foray into a potentially big market like India could be interesting. The seven-storey
Hamleys store on London‘s Regent Street is one of the top tourist draws. Despite its cult appeal
globally, Hamleys has largely restricted itself to the UK market.
It is believed that Reliance plans to open four standalone Hamleys stores in the first 24 months,
which is a significant expansion move for the marque UK brand. Baugur is also working on
expanding Hamleys to Middle-East, Russia, Turkey and China. Hamleys operates a standalone
store in Jordan‘s capital Amman.
While the local stores may not be as big as the London flagship, it will surely be unlike anything
seen before in India‘s toy retailing space. The Indian stores will be around 25,000 sqft and will
be opening doors in metros like Delhi, Mumbai and Bangalore initially.
With Hamleys selling toys of several brands besides its own, Reliance had little elbow room to
work on an equity structure. Indian regulations don‘t allow foreign players to hold stakes in
Indian companies that sell multiple brands. It, however, allows foreign retailers to hold up to
51% in a company in India if it sells goods under a single brand only.
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The Hamleys deal marks Reliance‘s third engagement with a major international brand in recent
times. It has unveiled JVs with iconic apparel retailer Marks & Spencer and optical chain Vision
Express.
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Bibliography
Books referred:
Sr.
No. Name Of Book/Magazine Book/ Magazine Author Edition
2nd
1 Marketing Management Book Tapan K. Panda Edition(2007)
2 Business India Magazine May 3,2008
3 Businessworld Magazine May 18,2008
4 Retailer Magazine May 31,2008
Sources of Information:
www.economictimes.com
www.businessworld.com
www.realtyplusmag.com
www.naukrihub.com
www.gihed.org
www.safalengineers.com
www.iscongroup.com
www.gallops-sez.com
www.savvygroup.in
www.bakeri.com
www.parshwanath.co.in
www.himalayamall.in
www.pacificacompanies.co.in
www.ahmedabadretail.com
www.business.mapsofindia.com/indian-retail-industry
www.dtz.com/portal/site/en-in
www.inrnews.com/indianrealestate/reports/dtz_india_real_estate_overview
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