UK retail giant Tesco seeks Govt nod to invade Indian market
18 Dec 2013 11:27 PM GMT
Tesco wants to set up a 50-50 joint venture with Trent to open retail stores in Bengaluru, Karnataka, and Kolhapur, Maharashtra.
'We welcome Tesco’s decision to invest in India. On our part, we assure them all support for expedited clearances. We hope this will mark a new beginning in transforming India's retail industry. I am sure that the other global leaders too will look at investing in India,' Commerce and Industry Minister Anand Sharma told reporters. This is the first application in the multi-brand retail segment since the government allowed 51 per cent foreign direct investment (FDI) in multi-brand retailing in September last year. Tesco’s existing stores are located in Mumbai, Bengaluru, Ahmedabad and Chennai.
Trent vice-chairman Noel Tata said, 'We believe our understanding of the Indian market, coupled with Tesco's unparallelled global retail expertise, will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.' The items to be sold at its stores include tea, coffee, vegetables, fruits, meat, fish, dairy products, wine, liquor, textiles, footwear, furniture, electronics, jewellery and books.
Official sources said the Foreign Investment Promotion Board (FIPB) is likely take up the matter at its next meeting. Tesco CEO Philip Clarke and Noel Tata had met Sharma in May to seek clarifications on the policy, especially on sourcing conditions.
In August the government eased multi-brand retail FDI norms, diluting the sourcing clause and allowing global retailers to procure 30 per cent of their products from local small and medium enterprises only at the start of the business. The foreign chains were also allowed to set up stores in cities with less than 10 lakh population while the investment requirement on back-end infrastructure by a foreign retailer was kept at 50 per cent of the first tranche of investment only.
The mandatory requirement is that foreign retailers have to bring in at least $100 million capital for setting up shops in India.
‘The key objective of the (multi-brand retail FDI) policy is to address the issue of post-harvest management and contain the losses of agricultural produce, particularly perishable produce,’ said Sharma. Tesco has stores in countries including China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey.
Fresh supply of mall space up 39% in 2013
New Delhi: Fresh supply of retail space in shopping malls increased by 39 per cent in 2013 to 4.59 million sq ft in eight top cities despite delay in completion of 18 malls, said a global property consultant. National Capital Region (NCR), Bengaluru and Ahmedabad did not see any new addition of mall spaces for the entire year in 2013, Cushman and Wakefield said, adding that Chennai saw the highest supply of 2 million sq ft, followed by Mumbai (9 lakh sq ft), Pune (7 lakh sq ft) and Kolkata (5 lakh sq ft). ‘Retail mall space has recorded an increase of 39 per cent in fresh mall space supply in 2013 over the last year despite deferment of 18 malls in the year,’ C&W said in a statement.
Out of 18 malls deferred, 10 are in the NCR. Most of these have been on account of funding issues which have led many developers to go slow on pace of construction. An estimated 9.8 million sq ft of mall spaces have been deferred in 2013 for completion in later times. The maximum deferment was witnessed in NCR at 7.3 million sq ft. Vacancy reduced by 2 per cent over the last year on account of increased leasing activities in the freshly launched malls, most of which started with high percentage of occupancy. ‘Retail markets have started to show signs of maturity with developers taking interest in creating value out of their projects for all stakeholders,’ said C&W executive MD (South Asia) Sanjay Dutt. ‘Developers are now consciously creating shopping malls that are more suited to the requirements of the retailers as well as consumers. As a result new malls have opened with high occupancy levels with exception of few,’ he added.
Many developers have deferred mall projects to align them to customer requirements to ensure the projects’ success. ‘As in the case of hospitality, shopping centres too have a long gestation period. Therefore, investors are interested only in those projects where the fundamentals are strong and can provide sustainable returns and profitability over a long period of time,’ said Dutt.
'We welcome Tesco’s decision to invest in India. On our part, we assure them all support for expedited clearances. We hope this will mark a new beginning in transforming India's retail industry. I am sure that the other global leaders too will look at investing in India,' Commerce and Industry Minister Anand Sharma told reporters. This is the first application in the multi-brand retail segment since the government allowed 51 per cent foreign direct investment (FDI) in multi-brand retailing in September last year. Tesco’s existing stores are located in Mumbai, Bengaluru, Ahmedabad and Chennai.
Trent vice-chairman Noel Tata said, 'We believe our understanding of the Indian market, coupled with Tesco's unparallelled global retail expertise, will allow us to leverage the tremendous potential of the market to the benefit of all stakeholders.' The items to be sold at its stores include tea, coffee, vegetables, fruits, meat, fish, dairy products, wine, liquor, textiles, footwear, furniture, electronics, jewellery and books.
Official sources said the Foreign Investment Promotion Board (FIPB) is likely take up the matter at its next meeting. Tesco CEO Philip Clarke and Noel Tata had met Sharma in May to seek clarifications on the policy, especially on sourcing conditions.
In August the government eased multi-brand retail FDI norms, diluting the sourcing clause and allowing global retailers to procure 30 per cent of their products from local small and medium enterprises only at the start of the business. The foreign chains were also allowed to set up stores in cities with less than 10 lakh population while the investment requirement on back-end infrastructure by a foreign retailer was kept at 50 per cent of the first tranche of investment only.
The mandatory requirement is that foreign retailers have to bring in at least $100 million capital for setting up shops in India.
‘The key objective of the (multi-brand retail FDI) policy is to address the issue of post-harvest management and contain the losses of agricultural produce, particularly perishable produce,’ said Sharma. Tesco has stores in countries including China, South Korea, Thailand, Malaysia, Poland, Hungary, Ireland, Slovakia, Czech Republic and Turkey.
Fresh supply of mall space up 39% in 2013
New Delhi: Fresh supply of retail space in shopping malls increased by 39 per cent in 2013 to 4.59 million sq ft in eight top cities despite delay in completion of 18 malls, said a global property consultant. National Capital Region (NCR), Bengaluru and Ahmedabad did not see any new addition of mall spaces for the entire year in 2013, Cushman and Wakefield said, adding that Chennai saw the highest supply of 2 million sq ft, followed by Mumbai (9 lakh sq ft), Pune (7 lakh sq ft) and Kolkata (5 lakh sq ft). ‘Retail mall space has recorded an increase of 39 per cent in fresh mall space supply in 2013 over the last year despite deferment of 18 malls in the year,’ C&W said in a statement.
Out of 18 malls deferred, 10 are in the NCR. Most of these have been on account of funding issues which have led many developers to go slow on pace of construction. An estimated 9.8 million sq ft of mall spaces have been deferred in 2013 for completion in later times. The maximum deferment was witnessed in NCR at 7.3 million sq ft. Vacancy reduced by 2 per cent over the last year on account of increased leasing activities in the freshly launched malls, most of which started with high percentage of occupancy. ‘Retail markets have started to show signs of maturity with developers taking interest in creating value out of their projects for all stakeholders,’ said C&W executive MD (South Asia) Sanjay Dutt. ‘Developers are now consciously creating shopping malls that are more suited to the requirements of the retailers as well as consumers. As a result new malls have opened with high occupancy levels with exception of few,’ he added.
Many developers have deferred mall projects to align them to customer requirements to ensure the projects’ success. ‘As in the case of hospitality, shopping centres too have a long gestation period. Therefore, investors are interested only in those projects where the fundamentals are strong and can provide sustainable returns and profitability over a long period of time,’ said Dutt.
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