As part of the strategy, store owners in Ghatkopar, which is one of the central suburbs of Mumbai,Vile Parle, Matunga, Mahim, Grant Road and Charni Road,which are a part of the western suburbs, are being paid huge sums in exchange for their existing retail properties. Incidentally the Gujarati community resides in large numbers in these suburbs. Industry experts believe that in Mumbai and Delhi alone, about 15,000 to 20,000 shops have recently been approached by Reliance Retail for their stores.
Joy Sanyal, vice-president, infrastructure and urban development, TrammellCrow Megharaj said, Reliance Retails buying and converting of properties is going to be one of the largest sentimental deals where the Gujarati community is the prime target. This will lead to high street retail property prices in major metros with an expected rise of 15% in the next few months as there will be a scarcity of space to develop independent properties.
Reliance Retail had received over 10,000 applications on the first day for its nationwide advertisement inviting applications for retail space in August 2006. The company had advertised in newspapers across 76 cities for retail space of 3,000 to 30,000 sq ft either on a lease or outright sale. According to a recent Lehman Brothers report, RIL will invest around $2 billion in RRL over the next five years.
The bulk of the investment will be used to build hypermarkets, supermarkets and smaller stores. In the next five years, major real estate developers in the country are likely to build around 185 million sq ft while Reliance Retail alone has targeted around 100 million sq ft for its retail plan. Reliance Fresh store is the first format among the several formats which the company is planning.