Scope Of Retail & Real Estate

SCOPE OF 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 Ahmedabad is divided into three zones, namely: 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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Scope Of Real Estate And Retail In Ahmedabad

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. 2. 3. 4. 5. 6.

Super Market Hyper Market Shopping Mall Convenience Store Speciality Store 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 Of Real Estate And Retail In Ahmedabad

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 2) For retail research - Iscon Mega Mall - Himalaya Mall - Gallops - Gulmohar Park - Dev Arc - Pantaloons - Westside - Levis - Jade Blue - Big Bazar - Vishal Mega Mart

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LIMITATIONS

Limitations for our project are as follows:  We concentrated our research work only on west Ahmedabad as it is hub for various retail formats.  Also we were not able to survey all outlets situated on CG road as we were not given the permission to do so.  We limited out study to organized retail formats only  Time constraint

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Scope Of Real Estate And Retail In Ahmedabad

TABLE OF CONTENTS

Serial No.

Particulars

Page No.

1. 2.

Research Design Real Estate

10-12 13-27

2.1 Macro-Economic Overview

14

2.2 Real Estate Scenario in India Commercial Real Estate Residential Real Estate Retail Real Estate Hospitality Real Estate Special Economic Zone FDI in Real Estate 2.3 Overview of Real Estate in Ahmedabad 2.4 About : NG Realty Pvt. Ltd.

14-17

18 19

2.5 Big Players & their findings Iscon Group Parshwanath Realty Pvt. Ltd. Pacifica Companies Shivalik Projects Savvy Infrastructures Bakeri Safal

3.

Retail Industry 3.1 Introduction to Retail Industry 3.2 Indian Organized Retail Market 3.3 Growth of Retail Companies in India

20-27

28-85 29-30 31-32 33

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3.4 Formats in Indian Organized Retail Sector Shopping Malls Super Markets Hyper Markets Convenience Stores Specialty Stores Franchisee Outlets 3.5 SWOT Analysis 3.6 Retail in Ahmedabad

34-42

43-44 45-46

3.7 Malls & their Analysis Iscon Mega Mall Himalaya Mall Gallops Designer Mall Gulmohar Park Devarc Mall

47-81

3.8 Study of Standalone Outlets Levis Store Pantaloons Jadeblue Westside Pepe Jeans United Colors Of Benetton

Conclusion Questionnaires Appendix Bibliography

82-85

86 87-89 90-104 105

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Scope Of Real Estate And Retail In Ahmedabad

1. RESEARCH DESIGN

A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems. There are following kinds of 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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Scope Of Real Estate And Retail In Ahmedabad

Research design of our project report is as follows:

1.1 Research Objective  Secondary objective Our secondary objectives are as follows: 1. interview the concern people associated with real estate to know their experience and view points 2. interview of mall managers and store managers 3. to know consumer behavior about retail format

 Primary objective Our primary objective is to know the scope of real estate and various retail format in Ahmedabad.

1.2 Collection of Primary Data Primary data is data originated by the researcher for the specific purpose of addressing the research problem. It can be collected by the various methods like survey, observation and experiments. In our project, we have collected primary data by survey, observation made at the time of making survey and industrial visit.

1.3 Collection of Secondary Data Secondary data is the data which is collected for some purpose other than problem at hand. It can be collected by various methods like published materials, computerized database and syndicated services. In our project, we have collected secondary data by various pamphlets and brochures given by the company, newspapers, Internet and magazines.

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Scope Of Real Estate And Retail In Ahmedabad

2. REAL ESTATE 2.1 Marco-economic Overview 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. Business services (including Information Technology (IT) and IT Enabled Services), communication services, financial services, hotels and restaurants and trade (distribution) services are among the fastest growing service sectors 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.

Manufacturing Industries like textiles, automobiles, cement, steel, petrochemicals, Infrastructure (civil aviation, roads, and ports), electronics, beverages and tobacco products have been the prime drivers in India‘s Industrial growth.

2.2 Real Estate Scenario in India The size of the Indian real estate market is estimated at USD 12 billion and it is currently growing at rate of about 30% annually.2009 will be a year where we will see the results of the active government intervention in fending off the global crisis and real estate crisis in India. While there is still a lot more that the government can and claims that it will do, the fact that customers still need homes will set in. This, complimented with lower real estate rates, lower interest rates and better incentives to customers to purchase homes will go a long way in rebuilding the entire real estate industry. 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 14 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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.

Commercial Real Estate The demand for new office space in India has grown from an estimated 3.9 million sq. ft in 1998 to over 16 million sq. ft in 2004-05. 70% of the demand for office space in India is driven by over 7,000 Indian IT and ITES firms and 15% by financial service providers and the pharmaceutical sector. Cumulative demand for office space in India over the next two years (2006-08) is estimated to be in excess of 45 million sq. ft. 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.

Residential Real Estate The residential property market in India constitutes almost 75% of the real estate market in terms of value. Low per capita housing stock, rising disposable income coupled with easy availability of finance from the housing finance companies and banks are driving demand in this sector. Also, Average age of housing loan borrowers has decreased to 30- 35 years from 40- 45 years a few years ago, indicating a younger buying threshold. The housing sector is currently growing at 3035% per annum. A proportion of demand is also being driven from investors who view housing as an attractive investment option as compared to mutual funds and stocks. The demand for housing is geographically widespread with townships being built in both the metros and the tier II and III cities. In India, there is a housing shortage of 19.4 million units out of which 6.7 millionaire in urban areas alone. This translates into very high opportunities for investors in the residential sector.

Retail Real Estate The Retail industry in India continues to be dominated by individual small format stores with floor space of less than 500 sq.ft. Total number of retail outlets is estimated to be around 12 -15 million, indicating a retail density of 12-14 outlets per 1,000 people, which is one of the highest in the world. 15 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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 Real Estate For India, Hospitality Real Estate is very important in terms for revenue generated from it. India has always been a tourist place for foreigners and they have visited India for its rich and diverse culture. 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.

Special Economic Zones 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 16 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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.

FDI in Real Estate With the opening of the sector for 100% FDI under automatic route, the real estate sector is Estimated to capture about 18-20% of the total FDI coming to India in 2005-06. The FDI in Real Estate is expected to have a favorable multiplier effect on the economy. As an indicator, for every rupee spent on construction, an estimated 75-80% gets added to the GDP. The spill-over effect of this initiative can also be witnessed in important sectors like the cement and construction industries, where the key players are expanding capacity to meet the soaring demand. With the relaxation of the FDI limit, the country saw an influx of global real estate developers like Dubaibased Emaar Properties (the largest listed real estate developer in the world) – which entered India in a joint venture with Delhi based MGF Developments. Other groups showing interest in India include insurance company American International Group Inc (AIG), High Point Rendell of the UK, Edaw-US, Japan's Kikken Sekkel, Lee Kim Tah Holdings and Cesma International from Singapore. 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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2.3 Overview of Real Estate in Ahmedabad Amidst all the cities of Gujarat, Ahmedabad is the largest and in India it is the seventh largest city. That‘s why Ahmedabad real estate market and property market is on boom and going in a full flow. You‘ll be amazed to know that Ahmedabad‘s economy is ever prospering due to the huge growth in the industrial sector. Ahmedabad is one of the most populated cities of India that‘s why real estate demand of housing is on high. Since the dawn of the development phase in India, real estate Ahmedabad got the maximum exposure and witnessed highest developments. The real estate sector in Ahmedabad is also flourishing due to major developments by builders in Ahmedabad. Majority of the big builders are constructing properties in Ahmedabad which are not only residential but also for the commercial purposes. It means every kind of property is being catered to. 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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2.4 About N.G.Realty Pvt.Ltd. The NG Realty Pvt. Ltd. is a part of N.G. Group of companies, one of the reputed and established Real Estate Developers, Organizers and Builders in Gujarat. The Group is in existence for nearly two decades in Ahmedabad and has successfully completed a number of residential, commercial and land development projects. The estimated present market value of the projects independently completed by the group is approximately Rs.700 cores. The world class shopping Mall at Ahmedabad, named Gallops promoted by the group has caught the attention of international retail shopping chain giants like Life style and Globus who have shown keen interest in the project by booking large space. 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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2.5 Big Players in Ahmedabad

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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Scope Of Real Estate And Retail In Ahmedabad 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 21 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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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Scope Of Real Estate And Retail In Ahmedabad 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. 23 Globsyn Business School - Ahmedabad

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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.

Savvy is a progressive construction company that believes in changing the paradigm of construction business practices adopting innovative technologies. It is with this approach that made them the first developers in Gujarat to be ISO: 9001 certified and first construction company to have CRISIL rating in Gujarat. 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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Scope Of Real Estate And Retail In Ahmedabad

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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Scope Of Real Estate And Retail In Ahmedabad

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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Scope Of Real Estate And Retail In Ahmedabad

FORMATS ISCON

PECIFICA

SHIVALIK

SAVVY

BAKERI

SAFAL

Malls

PARSHWAN ATH Residential

Residential

Commercial

Homes

Commercial

Commercials

Offices

Commercial

Residential

Shopping Malls

Residential

Shopping Malls

Hotels

Hospitality

Offices

Residential Malls Hotels SEZ Corporate Park

Hotel IT Parks

Plotted Developme nt Residential

IT Parks Township

27 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

28 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

3. RETAIL INDUSTRY

3.1 Introduction to 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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Scope Of Real Estate And Retail In Ahmedabad

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Scope Of Real Estate And Retail In Ahmedabad

3.2 Indian Organized Retail Market

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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Scope Of Real Estate And Retail In Ahmedabad 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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Scope Of Real Estate And Retail In Ahmedabad

3.3 Growth of Retail Companies in India Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years. The increase in the purchasing power of the Indian middle classes and the influx of the foreign investments has been encouraging in the Growth of Retail Companies in India. 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. Reasons for the fast Growth of Retail Companies in India: The retail companies are found to be rising in India at a remarkable speed with the years and this has brought a revolutionary change in the shopping attitude of the Indian customers. The Growth of Retail Companies in India is facilitated by certain factors like –  Existing Indian middle classes with an increased purchasing power  Rise of upcoming business sectors like the IT and engineering firms  Change in the taste and attitude of the Indians  Effect of globalization  Heavy influx of FDI in the retail sectors in India Source: http://business.mapsofindia.com/india-retail-industry

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Scope Of Real Estate And Retail In Ahmedabad

3.4 Formats in Indian Organized Retail Sector 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.     

It is the second fastest growing economy of the world Potential 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 Introduction of Value Added Tax or VAT and tax reforms High degree of professionalism and corporate ethics Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments To invest US $130 billion for the development of infrastructure, by year 2010 To attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Bullish stock markets Hordes of foreign investors are thronging in to invest in Indian retail markets Highly educated English speaking young workforce Vibrant and multi cultured cities Huge opportunity exists, especially in semi-rural and rural areas Till date the second largest employer after agriculture sector, for the huge semi-skilled Indian population Offers highest shop density in the whole world Having almost 1,20,000 shops, across the length and breadth of the country In a nascent stage of development as an organized industry

          

Source: http://business.mapsofindia.com/india-retail-industry

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Scope Of Real Estate And Retail In Ahmedabad

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.

ADVANTAGES OF SHOPPING MALLS:    

Increase in the growth of the organized retail sector Monumental increment in economic growth Employment generation by the organized retail sector Good competition means better products & services

DISADVANTAGES OF SHOPPING MALLS:  

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 trends to follow in the future:  

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.

THE ADVANTAGES SUPERMARKETS        

Ranks 5th on global retail development index It is the second fastest growing economy of the world 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 Introduction of Value Added Tax or VAT and tax reforms 36 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

           

High degree of professionalism and corporate ethics Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments To invest US $130 billion for the development of infrastructure, by year 2010 To attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Bullish stock markets Hordes of foreign investors are thronging in to invest in Indian retail markets Highly educated English speaking young workforce Vibrant and multi cultured cities Huge opportunity exists, especially in semi-rural and rural areas Till date the second largest employer after agriculture sector, for the huge semi-skilled Indian population Offers highest shop density in the whole world Having almost 1,20,000 shops, across the length and breadth of the country 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.

THE ADVANTAGES OF HYPERMARKETS   

Ranks 5th on global retail development index In a nascent stage of development as an organized industry It is the second fastest growing economy of the world

   

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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Scope Of Real Estate And Retail In Ahmedabad

        

Introduction of Value Added Tax or VAT and tax reforms High degree of professionalism and corporate ethics Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments To invest US $130 billion for the development of infrastructure, by year 2010 To attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Bullish stock markets Hordes of foreign investors are thronging in to invest in Indian retail markets Highly educated English speaking young workforce Huge opportunity exists, especially in urban and semi-rural areas

Till date the second largest employer after agriculture sector for the huge semi-skilled segment of the Indian population These Hypermarkets in India sells products like           

Electronic goods Groceries Vegetables and fruits House hold items Stationeries, Pharmaceuticals and health care products Consumer durables Vegetables Dress materials Furniture‘s Furnishings etc.

Hypermarkets in India - the first choice places       

Delhi Noida Gurgaon Hyderabad Bangalore Ahmedabad Chandigarh

Hypermarkets in India - the operators  

Reliance retail Bharti-Wal-Mart retail Source: http://business.mapsofindia.com/india-retail-industry 38 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

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:    

India ranks 5th on global retail development index India is the 2nd fastest growing economy of the world India is poised to become the 3rd largest economy in terms of GDP in next few years India ranks high among the top 10 FDI destinations of the world

 

India is the fastest growing tourist market in Asia World bank states that India will become the world's 2nd largest economy after China by 2050 India has a stable and investor-friendly central government at the helm of affairs It has introduced Value Added Tax (VAT) and tax reforms It has a high degree of professionalism and corporate ethics It has excellent investment opportunities in the retail sector and allied markets India is to invest US$ 130 billion for the development of infrastructure by 2010 India will attract US$ 10 billion FDI for infrastructure development by 2008 It has bullish stock markets Hordes of foreign investors are thronging in to invest in Indian retail markets Highly educated, English speaking, young workforce Vibrant and multi-cultured cities Huge opportunity exists in semi-rural and rural areas Till date, India is the 2nd largest employer for the huge semi-skilled Indian population Offers highest shop density in the whole world - has almost 1,20,000 shops across the length and breadth of the country In a nascent stage of development as an organized industry.

             

Types of convenience stores found 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 39 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

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. Specialty Stores of India - the key advantages are:                     

Ranks 5th on global retail development index It is the second fastest growing economy of the world 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 Introduction of Value Added Tax or VAT and tax reforms High degree of professionalism and corporate ethics Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments To invest US $130 billion for the development of infrastructure, by year 2010 To attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Bullish stock markets Hordes of foreign investors are thronging in to invest in Indian retail markets Highly educated English speaking young workforce Vibrant and multi cultured cities Huge opportunity exists, especially in semi-rural and rural areas Till date the second largest employer after agriculture sector, for the huge semi-skilled segment of the Indian population Offers highest shop density in the whole world Having almost 1,20,000 shops across the length and breadth of the country In a nascent stage of development as an organized industry

Specialty Stores of India like    

Pantaloons, Steel junction, Metal junction, Food bazaar, 40 Globsyn Business School - Ahmedabad

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.

ADVANTAGES OF FRANCHISEE OUTLETS:          

Franchisee enjoys liberty of self employment The most successful way of starting a new business Franchising opportunities exists in every area of business and trade Low or no initial capital investment for the franchiser Quality and reputation of the parent company is maintained The license for franchise is renewable after or before the expiry of the term of contracts Liabilities of parent companies are less The Franchisee outlets have better commitments and responsibilities to discharge Huge income opportunity for the franchiser and franchisee No introductory advertisement is needed for the Franchisee outlets for the establishment of the brand 41 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

SOME WELL KNOWN OUTLETS ARE:         

Macdonald's Kentucky Fried Chicken Subway Monginis Sugar and spice Coca cola Pepsi Frito lays Perfetti

OPPORTUNITIES OF FRANCHISEE OUTLET:             

Ranks 5th on global retail development index It is the second fastest growing economy of the world 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 Stable and investor friendly Central Government at the helm of affairs High degree of professionalism and corporate ethics Excellent Investment opportunities in Indian retail sector and in allied sectors; sure and high returns on investments To invest US $130 billion for the development of infrastructure, by year 2010 Retail industry to attract US $ 10 billion FDI for infrastructure development by the end of year 2008 Hordes of foreign investors are thronging in to invest in Indian retail markets Huge opportunity exists, especially in semi-rural and rural areas Huge employment scope for the semi-skilled segment of the Indian population Source: http://business.mapsofindia.com/india-retail-industry

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3.5 SWOT ANALYSIS A SWOT analysis of the Indian organized retail industry is presented below: 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 standalone 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%. 43 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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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3.6 Retail in Ahmedabad 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 45 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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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3.7 Malls and their Analysis

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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Ques: 1 What attracts you to visit Iscon Mega Mall?

1. 2. 3. 4.

Location Outlets Ambience Spacious

Factors of Attraction

10%

14%

46% Location Outlets

30%

Ambience Spacious

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 2 What is your average spending per visit?

1. 2. 3. 4.

< 500 500-1000 1001-2000 > 2000

Avg.spending(in Rs.)

16%

36%

<500 12%

36%

500-1000 1001-2000 2000>

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL ____ HIMALAYA MALL ____ GALLOPS MALL ____ GULMOHAR MALL ____ DEV ARC MALL

Ranking

6%

4%

2% IsconMega Mall

26% 62%

Himalaya Mall Gallops Mall Gulmohar Mall Dev Arc Mall

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Ques: 4 According to you where does Iscon Mall lacks in?

1. High Prices 2. Confusion between Atrium:1 & Atrium:2 3. Nothing.

Where Iscon Lacks?

36%

48%

High Prices 16%

Confusion between Atriums Nothing

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Scope Of Real Estate And Retail In Ahmedabad

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:   

Get a Multiplex so that more people come in Organize events or workshops for children during vacations Use space available for other brands

Threats:  

Reliance Mart Other Malls in vicinity

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ANALYSIS AND SUGGESTIONS

           

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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Scope Of Real Estate And Retail In Ahmedabad Ques: 1 What attracts you to visit Himalaya Mall?

1. 2. 3. 4.

Location Outlets Ambience Spacious

Factors of Attraction

10%

10% 50% 30%

Location Outlets Ambience Spacious

55 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad Ques: 2 What is your average spending per visit?

1. 2. 3. 4.

1.< 500 500-1000 1001-2000 > 2000

Avg.Spending(in Rs.)

13%

17% <500

40%

30%

500-1000 1001-2000 >2000

56 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL ____ HIMALAYA MALL ____ GALLOPS MALL ____ GULMOHAR MALL ____ DEV ARC MALL

Ranking

12%

10%

34%

17%

Iscon Mega Mall Himalaya Mall

27%

Gallops Mall Gulmohar Park Dev Arc Mall

57 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad Ques: 4 According to you where does Himalaya Mall lack in?

1. Parking Facility 2. International Brands 3. Nothing

Where Himalaya Lacks

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:   

Less number of international Brands Less conversion ratio Pay and park facility

Opportunities:  

Get in international Brands Fill empty spaces with good brands

Threats:   

Recession Unorganized retail outlets (Moonlight) Brand awareness is less among people visiting the Mall

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ANALYSIS AND SUGGESTIONS

         

Centrally located Mall Highest number of footfalls Anchor Stores like Big Bazaar and Croma It has like Adlabs, Mc Donalds, CCD and Scary House Has separate Food courts and Gaming zone Lot of events are organized Pay and Park facility affects footfalls Mall caters to middle class Most of people come in to just roam around Few of outlets are closed

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Scope Of Real Estate And Retail In Ahmedabad

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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Ques: 1 What attracts you to Gallops Mall?

1. 2. 3. 4.

Location Outlets Ambience Spacious

Factors of Attraction

10% 20%

50%

Outlets Location

20%

Ambience Spacious

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Ques: 2 What is your average spending per visit?

1. 2. 3. 4.

1.< 500 500-1000 1001-2000 > 2000

Avg.Spending(in Rs.)

40%

10%

20% <500

30%

500-1000 1001-2000 2000>

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Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL ____ HIMALAYA MALL ____ GALLOPS MALL ____ GULMOHAR MALL ____ DEV ARC MALL

Ranking

10%

5% 40%

20%

Iscon Mega Mall Himalaya Mall

25%

Gulmohar Park Gallops Mall Dev Arc Mall

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Ques: 4 According to you where does Gallops Mall lack in?

1. High Prices 2. Less number of Outlets 3. Nothing.

Where Gallops lacks?

30%

40% High Prices 30%

Less Outlets Nothing

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Scope Of Real Estate And Retail In Ahmedabad

SWOT

Strengths:  

First Mall in Ahmedabad Anchor Stores like Lifestyle and Globus, which are only in Gallops

Weakness:    

Location, it is not on the main road No Gaming Zone Less number of Food courts Second floor is empty, only Banquet hall is there

Opportunities:   

Get in more outlets Get variety of food outlets Do promotional Activities, like organize events for the people

Threats:  

Recession Other Malls in vicinity

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ANALYSIS AND SUGGESTIONS

        

It being the First Mall in Ahmedabad, people know it very well It laid the foundation for Malls in Ahmedabad People come in for Lifestyle and Globus Also people said that the structure is simple and attractive Few of the people said that prices are high Also people want more outlets They also said second floor is empty and needs to be filled up to attract customers Few of them also wanted food courts inside the mall People also wanted activities to be held in the mall

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Scope Of Real Estate And Retail In Ahmedabad

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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Ques: 1 What attracts you to visit Gulmohar Park?

1. 2. 3. 4.

Location Outlets Ambience Spacious

Factors of Attraction 6% 27%

20%

Location 47%

Outlets Ambience Spacious

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 2 What is your average spending per visit?

1. 2. 3. 4.

1.< 500 500-1000 1001-2000 > 2000

Avg.Spending(in Rs.)

14%

6% <500

53% 27%

500-1000 1001-2000 2000>

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL ____ HIMALAYA MALL ____ GALLOPS MALL ____ GULMOHAR PARK ____ DEV ARC MALL

Ranking

7% 13%

40%

13%

Iscon Mega Mall Himalaya Mall

27%

Gallops Mall Gulmohar Park Dev Arc Mall

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Ques: 4 According to you where does Gulmohar Park need to improve?

1. Gaming Zone/Kids Area 2. Sitting Place 3. Nothing

Where Gulmohar Lacks?

20%

47% Gaming zone/Kids Area

33%

Sitting Place Nothing

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SWOT Strengths:    

It is Mall of a Retail Company i.e. Kshitij group Stores like Ethinicity, Pantaloons and Ezone It is Lifestyle Mall Structure is Simple

Weakness:    

High Prices No seating space No facility of drinking water Gaming zone for children not enough

Opportunities:    

Get more games for children Make seating place available Organize events during weekends Also can reduce prices

Threats:   

High Prices Recession Other Malls in vicinity

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ANALYSIS AND SUGGESTIONS

         

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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Ques: 1 What attracts you to Dev Arc Mall?

1. 2. 3. 4.

Location Outlets Ambience Spacious

Factors of Attraction

27%

47% Location

20%

Outlets Ambience

6%

Spacious

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Ques: 2 What is your average spending per visit?

1. 2. 3. 4.

1.< 500 500-1000 1001-2000 > 2000

Avg.Spending(in Rs.) 6% 27%

27%

<500 40%

500-1000 1001-2000 >2000

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 3 Rank these Malls according to your preference.

____ ISCON MEGA MALL ____ HIMALAYA MALL ____ GALLOPS MALL ____ GULMOHAR PARK ____ DEV ARC MALL

Ranking

14%

10%

40%

Iscon Mega Mall Himalaya Mall

16% 20%

Gallops mall Gulmohar Park Dev Arc Mall

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Scope Of Real Estate And Retail In Ahmedabad

Ques: 4 According to you where does Dev Arc Mall need to improve?

1. 2. 3. 4.

More Outlets Events Gaming zone Food courts

Where Dev Arc Lacks?

20% 15%

55% 10%

Outlets Events Gaming Zone Food Courts

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Scope Of Real Estate And Retail In Ahmedabad

SWOT

Strengths:    

Location Anchor store like Mark and Spencers and Bose Cinemax Commercial area

Weakness:   

Improper Brand Mix Most of the stores are empty Mall Management not good enough

Opportunities:   

Reopen Indiabulls and Magnet Get more outlets Promote the Mall

Threats:   

Low conversion ratio Recession Other Malls in vicinity

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ANALYSIS AND SUGGESTIONS

         

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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3.8 Study of Standalone Outlets 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.

Next we visited Pantaloons which is in Abhijit III: Law Garden.  

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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Jadeblue: Pariseema Complex, C.G.Road, Ahmedabad     

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,

83 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad Footwear, Cosmetics, Perfumes and Handbags, Household Accessories, lingerie, and Gifts. 

The company has already established 36 Westside departmental stores (measuring 15,000 - 30,000 square feet each) in Ahmedabad, Bangalore, Chennai, Delhi, Gurgaon, Ghaziabad & Noida (to be considered as 1 city), Hyderabad, Indore, Jaipur, Kolkata, Ludhiana, Lucknow, Mumbai, Mysore, Nagpur, Pune, Rajkot, Surat, Vadodara and Jammu.



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.



Area wise footfalls are being shared.



He even told us that upto 40% of customers in Ahmedabad are Brand conscious, they will never get attracted to discounted formats.

United Colors of Benetton: Crystal Square  

United Colors of Benetton better known as UCB is doing better in Mall. Speaking to its store manager at Crystal Square, we came to know that UCB‘s store in Iscon Mega Mall was doing better than other UCB store outlets.

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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 About Real Estate: After 8 weeks of our research work we came to know about different formats of real estate in Ahmedabad. They are Residential, Commercial, IT Parks, Retail Real Estate, SEZ, etc. After speaking to concerned people of various real estate developers we came to know which format is likely to work in near future in Ahmedabad. We also came to know that Ahmedabad is dived into various zones namely R1, R2, R3. R1 --- High Rise R2 --- Low Rise R3 --- Bungalows Older Ahmedabad comes under AMC (Ahmedabad Municipal Corporation) New Ahmedabad comes under AUDA (Ahmedabad Urban Development Authority) Most of them said that Residential would work in near future followed by Commercial.

About Retail Sector: Different formats in Retail sector are: 1. 2. 3. 4. 5. 6.

Shopping Malls Convenience Stores Hyper Market Super Market Specialty Stores Franchise Outlet

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 86 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad whole country organized retail has gained good momentum and Ahmedabad is one of the target cities which can surely cater to this format.

QUESTIONNAIRES  For Real Estate Developers: 1. 2. 3. 4. 5. 6.

Different format made by your company Is your existence is in both new and old Ahmedabad? Reason behind it. How the location is been selected of any plot? How the rates are decided of any place? Is that according to format or location rates? At what time rates are decided before or after the project are completed? Do you have to follow government policy and limitation while making building? If yes, what are they? 7. Your team of engineers is in house or hired for particular project? 8. Finance is in house or taken through loan or any other source? 9. Are you affected by the recession? 10. According to you what is the scope of real estate? And which format will work in near future?

 For Mall Managers: 1. 2. 3. 4. 5. 6.

Since how long you are with this Mall? Being a Mall Manager what are your duties and what‘s your working profile? According to you, what does mall Management include? What things are to be seen while designing a Mall? What are prime necessities of Mall Does a Mall approach a particular brand for their mall or it‘s vice versa?

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 For Store Manager of an Outlet: 1. 2. 3. 4. 5. 6. 7. 8. 9.

Since when are you in Gallops/Himalaya/Devarc/Iscon/Gulmohar Park? Did Mall Management approach you or you approached the mall? How well is the store doing? Has recession affected your sales? If yes then what are you doing to overcome it? What is your conversion rate? And what is your average ticket size? How many outlets do you have in the city? Having multiple outlets, does it benefit? Who are your competitors in the mall? Who is doing well? According to you what is preferred an outlet in a mall or a standalone outlet? If not Gallops/Himalaya/Devarc/Iscon/Gulmohar then which would have been your second option?

 For Customers:

Name: _________________ Age: ____Occupation:_____________ Area of Residence: __________________

Q1 what attracts you to Gallops/Himalaya/Devarc/Iscon/Gulmohar Park? 1. Location 2. Outlets 3. Ambience 4. ____________ Q2 what is your average spending when you make a visit? 1. 2. 3. 4.

< 500 500-1000 1000-1500 1500 and above

Q3 which are the outlets you like here in Gallops/Himalaya/Devarc/Iscon/Gulmohar Park? 88 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

--------------------------------------------------------------------------------------------------------------Q4 Rank the following Malls. (1 – Most preferred and 4- least preferred) _____Gulmohar Park _____Iscon Mega Mall _____Gallops _____Himalaya Mall _____Devarc Mall

Q5 Any suggestions for Gallops/Himalaya/Devarc/Iscon/Gulmohar park. __________________________________________________________________________ ________________________________________________________________________

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Appendix

Malls losing brands to high street 8 Jan 2009, 0323 hrs IST, Avinash Nair & Yamini Dhall, ET Bureau 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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Scope Of Real Estate And Retail In Ahmedabad 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 92 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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.

Real estate market could recover by Diwali 23 May 2009, 0952 hrs IST, Sandeep Sadh,

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. 94 Globsyn Business School - Ahmedabad

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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.)

India retail sector reboots as slowdown pinches 17 Apr 2009, 1254 hrs IST, REUTERS 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. Brokerage Edelweiss Securities expects the upheaval to last 12-18 months. "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 95 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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 owneroperators, 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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Retailers on terror edge Every time there is a terror attack, or a threat of one, it‘s bad news for shopping malls and large retail outlets that not only see a drop in visitors and sales, but also come under greater scrutiny of security agencies. 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.‖ July 28, 2008 Source: Hindustan Times

Mall hoppers don’t spell sales Mall developers and retailers in India may be on an expansion spree but signs that everything is not right with the retail industry in Gujarat are beginning to show. Picture this — Around 50 per cent of the branded store outlets have shut down at India‘s first designer mall Gallops, located off the Sarkhej-Gandhinagar Highway, while a furlong away, Reliance Mart, the first in India inaugurated by Mr Mukesh Ambani on August 15 last year, attracts mostly tourist crowds.

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Scope Of Real Estate And Retail In Ahmedabad 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.‖ July 27, 2008 Source: Hindu Business Line

Retailers bet on entertainment activities to lure customers 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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Scope Of Real Estate And Retail In Ahmedabad 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.

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Vishal Retail is planning to start salons within premises of its 120-odd outlets.

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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. 101 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 

Spencer‘s Retail has set up live kitchens and book stores to ensure customers spend more time.

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Smaller players like Subhiksha Retail think it wise to continue retailing what they presently do.

July 26, 2008 Source: Economic Times

Discount retailers make hay while inflation shines Everyone loves a good discount. And it comes in as an incentive especially during times of inflation. For apparel discount retailers, inflation has proved to be a blessing. Arvind‘s branded discount retail chain Megamart has seen an improvement in walk-ins of 15% in the past few weeks. ―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. Discount retailing, a post World War II phenomenon, is an established market practice in countries like the US. This concept is now picking in India, where customers are extremely price sensitive. Discounts have always worked well with apparel and factory outlets in the suburbs of many Indian cities and shopping hubs like Fashion Street in Mumbai and Maratahalli in Bangalore bear testimony to this. Now inflation has come to the aid of these retail majors. 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 102 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad 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. July 26, 2008 Source: Economic Times

Big players - plans and investments Reliance Retail to bring in 250-year-old Hamleys Reliance Retail has clinched a deal with the world‘s largest toy shop, Hamleys. India‘s largest private conglomerate will be the partner in one of the biggest international expansions by the 250-year-old Hamleys till date. 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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Scope Of Real Estate And Retail In Ahmedabad 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.

104 Globsyn Business School - Ahmedabad

Scope Of Real Estate And Retail In Ahmedabad

Bibliography  Books referred: Sr. No. Name Of Book/Magazine 1 2 3 4

Marketing Management Business India Businessworld Retailer

Book/ Magazine Author Book Magazine Magazine Magazine

Tapan K. Panda

Edition 2nd Edition(2007) May 3,2008 May 18,2008 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

105 Globsyn Business School - Ahmedabad