Metro pockets still require malls

Mr Shishir Baijal, CEO and MD, Kshitij Investment Advisory Company Ltd speaks out about the present real estate scenario in India to the Retailer

Retailer: How do you perceive the present scenario of Indian real estate?

Shishir Baijal: Indian retail is globally acclaimed as ‘Sunrise Industry’. Indian retail industry is now on the threshold of quantum growth. Though organised retail is only $6 billion worth today (three per cent of the entire Indian retail market), it is predicted to reach $23 billion by 2010. Seeing this spurred growth in retail, the need for quality retail real estate is paramount and huge.

Just a decade ago, India did not have a single mall. The scenario has undergone a drastic change. Today, there are over 96 malls in India with a total built-up area of 216 lakh sq.ft. The retail revolution has just begun. It is gearing up to reach new levels, change existing paradigms and create significant contribution to Indian economy. Taking retail to new horizons, Kshitij aims to give the Indian retailer an opportunity for establishing a pan-India presence with its 51 malls situated in prime locations of metros, mini metros and tier-II towns. By creating ‘quality retail real estate’, Kshitij has triggered the second wave in Indian retail story. 

Retailer: What is Kshitij and who established it?

SB: Kshitij Investment Advisory Co. Ltd (KIAC) is the real estate farm, which is owned and promoted by Future Group. At present, we are developing 51 properties covering 16-million sq. ft across India. It has largest retail focused real estate fund in India and manages two retail focused real estate funds with a combined corpus of US $430 million.

Kshitij Venture Capital Fund (KVC), with a corpus of US $80 million (raised from High Net Worth individuals, Corporate and Financial Institutions) has fully committed its capital to development of 13 retail projects in metros, mini-metros and tier-II towns.

Horizon International Fund with a corpus of $350 million will develop stand-alone malls with a BUA of 50,000 sq. m and will also develop Market Cities in a minimum area of 25 acres or 500,000 sq. ft, located within city limits.

The future of mall culture is very bright; especially Amusement Park malls where the young generation of the country can get peaceful, pollution-free friendly environment: Noida and Rohini Amusement Parks. All the malls are not developed through the Kshitij funds. Most of these malls are within Pantaloon fold and are part of our advisory services.

Retailer: What was the inspiration behind Kshitij?

SB: Taking serious note of booming in retail industry of the country, we have identified professionally ‘the huge requirement of retailing space’ in future. The industry has a great need for right infrastructure. We are presently developing 51 properties across the country to meet the need of retail industry. Providing right infrastructure to retailers and fulfilling their need was the inspiration behind emergence of Kshitij.

Retailer: Which projects is Kshitij developing presently?

SB: At present, Kshitij is developing 12 malls in Mumbai, Chennai, Hyderabad, Bangalore and other places across the country for market city development. Not focusing on metro or large cities only, we are taking small cities and towns also in future projects. These developments will provide to consumers an integrated retail-led destination for shopping, leisure, entertainment and recreational needs. The destination will feature also mixed-use retail spaces like convention centres, 3 and 4-star hotels, service apartments, commercial offices, residential apartments and community centers, besides public spaces. 

Retailer: Where do you plan these projects and why?

SB: I said, we are committed to providing right infrastructure to the retail industry. We are not only concentrating on metros but reaching out also in small cities and towns where there is easy accessibility. Consumers should find it easy to access malls’ food-court, apparel and children to amusement park and other activities.

Retailer: What is the size of your current land bank?

SB: No, we do not have any land bank, we only buy land and develop in a proper way according the need of the retailer.

Retailer: What is your speculation on the future?

SB: I think there is still property boom at some metros and in their surrounding areas. You may say there are six to seven metropolitan cities where, we think, prices will still go up. I can not speculate about the market in future. Yes, various malls coming up in Punjab will boost the real estate market. Punjab being the most prosperous state of the country, the public there, has high purchasing power. We are planning to come up with new malls in Amritsar, Jalandhar and Chandigarh in near future.

Interview conducted by S.L. Talwar