Following the trend of the retail majors diversifying into low-cost housing sector, Kishore Biyani-led Future Group is venturing into the real estate business through a 50:50 joint venture with Kolkata-based developer Sumit Dabriwal for building affordable, branded, ready-to-move-in homes. This is part of the company?s plan for a turnover of Rs 13,000 crore by July 2011, a growth of 35% over last year.
In the recent past, Tata Group, whose business spread has a significant retail component, had also launched Tata Housing to construct affordable homes at Mumbai?s far suburbs.
Delhi-based Vishal Retail is waiting for an opportune moment before entering real estate segment. Ambeek Khemka, group president, Vishal Retail Ltd, said, ?To enter in real estate is a good idea, but we are waiting for good time. In the current scenario, our focus is more on the retail business.? The company has been finetuning its strategies to manage change. ?During the economic slowdown we have carried out changes in our strategy, like relocation of stores, resizing store areas, introducing shop-in-shop concept and focusing more on opening franchise stores, besides own stores. With the move, our sales has jumped around 20% in the current quarter,? he said.
Industry experts opine that low-cost housing is both a social need and a high-demand sector, and to invest into such a segment is an astute and far-seeing move. According to Sanjay Chugh, national head ? business development (retail), Jones Lang LaSalle Meghraj, ?With value retail continuing strong even in the face of the current slowdown, the Future Group is undoubtedly still in the winning category. One of this group?s strengths has been its focus on diversification, resulting in a very resilient business portfolio spread. With such a focus, it makes sense to branch out further into new growth sectors. Doubtlessly, other retail names will follow suit as the business potential of affordable housing becomes more prominent.?
McDonald?s India, which has a real estate company, West Pioneer Properties Ltd listed on the Alternative Investment Market (AIM) in London in 2007 mainly to put up malls and hotels in the country, has no plans currently to diversify into affordable housing. But looking at the market dynamics, industry experts opine that they too may examine the possibilities of the realty business. However, company officials were not available for comments.