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1. GOOD MORNING INDIA

2. India Organized Retail Market Diagnosis & Outlook Group - 01

3. Objective of the study An attempt to foresee the demand-supply* dynamics of the modern retail market in India till 2012 Presumption – penetration of organized retail will be higher in regions with a higher proportion of middle and high income house holds *Organized retail space represents the supply side

5. Unorganized retails

6. Organized Retails

7. Dominance of unorganized Retail

8. Expected growth rate of the total retail market during 2009-12 is around 30% p.a.

10. The economic slow down of 2008-09 has brought some important changes in rental in ORMs

11. Post Slowdown retail (organized) sectors is showing some significant trends :Focus on food and related products Attention on tier1 and tier 2 cities

12. NCR KOLKATA MUMBAI HYDERABAD PUNE BENGALURU CHENNAI

13. NCR

14. Market Review Buyers have adopted new edge shopping Retail space & Multiplex under same roof Retail space Multiplex Amusement park Exclusive Malls for Designer- wear

15. (NCR)

16. Operational Mall Analysis

18. Developers are now contemplating projects across the NCR which have dedicated commercial office space within the same premise

19. Sizeable vacant stock in malls of various micro-markets of the NCR still remains a major concern

20. Retailers are now entering into a lease contract which is a revenue sharing format

23. Increase in per capita income level.

24. Exposure to various retail brands & market trends.

27. However, the total potential supply in the peripheral region is anticipated to be completed by the end of 2012, only 22% of the supply is expected to enter the market.

29. However, in Hyderabad, only the new malls which were launched in 2009 have a revenue sharing model.

31. High rentals quoted by landlords in Banjara Hills and Jubilee Hills at the time of signing.

35. Retailers are also liable to pay Common Area Maintenance (CAM) charges on a monthly basis for the common area used by all tenants (such as the lobby, elevators, restrooms or parking lots).

36. The least CAM charges are witnessed in Old CBD areas, whereas the highest are recorded in the peripheral micro marketIt is estimated that the Organized Retail Market will double from the existing Rs. 14 billion to Rs. 28 billion by 2012. However, during the same period, the Real Estate Retail Potential will increase to Rs. 58 billion. This mismatch, will lead to an oversupply situation of 3.41 mn.sq.ft. in 2012.

37. KOLKATA “City of Joy”

38. Market overview Conflicting nature of affluence, coupled with restrictive government policies. First mall in the city (Forum, Elgin Road) launched in 2003 and today it boasts of around 8 large format malls. Recession: Lack of interest shown by retailers, lack of funding across the board, rise in construction cost, lack of consumer demand and acute catchment problem.  'wait-and-watch’. Several malls presently being converted into office and residential spaces. 'Haute Street' on the Eastern Metropolitan Bypass turned into commercial space for office lease.

39. Operational Mall Analysis 3.4 millions square feet of retail space.

41. Spill over spaces from previous years, expected to be completed way back in 2006.

42. Eastern Kolkata maximum (39%) and Rajarhat 0.4 mn. Sq. ft.

44. Undeveloped infrastructure

45. Economic downturn

46. Number of high-profile retail projects taken off the market and reconfigured.

47. Firangee Bazaar, a retail project scheduled to come up on EM Bypass, converted to office space.

49. Retail rentals dipped to 10% during 2008-09 compared to national average of 30-40%.

50. Variations among rentals on different floors. Ground floor rentals 15-40% higher than first floor rentals.

51. High rentals and low revenues  Revenue sharing.

52. Rental correction to the tune of 8-12%

53. Price rose rapidly  Deadlock in new transactions.

54. Several stores reportedly seen closures in these markets.

57. Most of the prestigious projects in pipeline will see the light of the day only in 2011 and 2012.

58. Economic adjustments of 2009 did not impact Kolkata much.

59. Economic improvement has not had as much an impact on the conservative Kolkata shoppers’ sentiments as in bigger cities.

60. Slowdown in construction not negative

61. Helped in maintaining good demand-supply.

62. ATD: Revenue generated per square feet.

63. Rs. 416 (Rajarhat) to 782 for vanilla and Rs. 375 (Rajarhat) to 570 for anchor.

64. By 2012: RERP (83 Billions) > ORM (76 Billions)  Medium Oversupply of 0.69 m. sq. feet. Growing confidence  More occupants Recovery from ill-effects of over-supply.

65. PUNE “City of Virtue”

67. Past few years ,the onset of several new format retailing.

68. Retail projects in Pune comprise smaller area format and few operational malls .

69. 2.77 millions square feet of mall space.

73. Organized retailing is picking up in the western region of the city due to large-scale IT/ITES development

76. Remains foremost in terms of the real estate development

77. Current Total Organized Market Area is 8.72 mn.sq.ft. Expected to increase by around 129% over the next 3 years

78. Pace of the retail estate development has outgrown the organized retail business over the last 4.5 years

79. Classified into 4 regions – Island City, Western Suburbs, Central Suburbs and Navi Mumbai

83. The anchor tenants get higher discount rates when compared to the vanilla tenants

84. The rental structure varies across the 4 regions

85. Rental values in malls have appreciated around 9% during March 2009 – February 2010.

88. Since Central suburbs is expected to experience the highest upcoming supply, it is likely to see a large amount of oversupply.

89. Western suburbs is likely to see a lot of residential growth followed by organized retail activities. The challenge would be to keep a balance between organized consumer market and upcoming space supply of organized retail.

90. During the period 2009-12, the ORM is expected to grow from Rs. 74 billion to Rs. 203 billion RERP would increase from Rs. 79 billion to Rs. 216 billion.

93. Increased penetration of foreign brands-apparel, F&B

94. Muted Response to Mixed formats

95. Pending projects due to recession

97. Rental Profiles

99. Major consumers from IT/ITES thus high demand for retail.

100. Convenience Shopping with exception to West Zone

101. over supply and high vacancy rate.

104. High Rate of Urbanization

105. Slower pace of organized retail

106. Presence of mere three malls in the city

107. Value driven market and conservative

109. Rental Profiles

111. IT corridors and MRT stations a prospect

112. Foreseeable Decline in rentals

113. Possible threat of over supply.

115. Thank You