ICICI Property prepared a report, India Retail Real Estate The Road Ahead, that says the total real estate requirement of the future organized retail chains will be far more than the construction industry can supply.

According to this report, “The demand for quality real estate is to grow exponentially over the next 4-5 years fuelled by the demand from the organized retailers. The organized retail will require around 500 sq ft realty space in the next five years, out of which 250 million sq ft will be required by shopping malls itself.”

But as per real estate developer’s current plans, only 143 million sq ft of mall space is being planned over the next five years. Hence, the retail industry will be left with a shortage of more than 40%.

The major demand for the real estate is expected to come from the pan-India retail chains like Reliance Industries, Bharti-Walmart, Aditya Birla Group, Tatas, and Future group etc.

Earlier, the Indian organized retail market was reigned by the attire brand stores or regional retail chains. Now, the retail chains are setting up all India network with immense supply chain network to support the business.

Wal-Mart, Metro, Carrefour, Tesco, Auchan and many big players have shown enthusiastic interest to invest in Indian markets.

The report says, Indian retail business is projected to grow above $500 billion by 2011 from $330 billion at present.

Retail business is projected to be growing at 50% per annum compounded annually, contributing an estimated 20% to the total Indian retail. Approx. $30 billion investments are being planned for the next 4-5 years in the organized retail business in the country, estimated Technopak.

Major percentage of this investment is expected from Reliance Industries, Aditya Birla Group, Bharti-Walmart, Future Group etc, whereas, around 40% of the total expected investments are likely to be contributed by foreign players.

The report also pointed out that the organized retailing will probably create around 3.5 million jobs in the front end of the business and 30% job will be in the back end.

However, because of space limitations inside the city, most of the shopping malls are being developed outside the city limits and lack of efficient and comfortable public transport system will cause high streets to still play an important role in most of the urban centers.