The growth of retail sector will lead to greater shift towards service economy in which need for real estate will be paramount, said Mr. Sanghi.
Franchising in retailing will emerge as a popular mode of retailing as their will be proliferation of availability of brands with both foreign and Indian companies acquiring a strong brand equity for their products in near future.
The retail boom currently being witnessed in India is likely to have a significant impact on the commercial real estate sector as the large metropolies will have sizable retail construction projects underway.
However, there will be few stumbling blocks that may restrict the growth of retail sector. These include very high stamp duties on transfer of property which vary from state to state level.
A case in example is Gujarat, Uttar Pradesh and few other states where the stamp duty is charged at 12.5%, while there are certain states like Delhi in which the stamp duty levied is within the range of 8%.
Urban Land Ceiling Act, Rent Control Act and Land Acquisition Act until amended will continue to distort property markets and cities, leading to exceptionally high property prices. Presence of strong pro-tenancy laws will also make it difficult for retailers to grow as this problem is compounded by lack of clarity over titles to ownership.
The government should encourage People of Indian Origin (PIO) to invest in real estate and township buildint should encourage People of Indian Origin (PIO) to invest in real estate and township building and foreign investment in real estate business and retailing should also be opened up.
marketing@alchempro.com
