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Old Mutual sees opportunity in the rapid transformation of the $300 billion Indian retail market as it moves from a traditional small store format to modern departmental stores, hypermarkets, supermarkets and specialty stores housed in complexes offering shopping, entertainment and food all under one roof. The young consumer base with growing spending potential augurs well for the retail segment. The number of people between 20 to 49 is projected to be 510 million by 2010, the largest number in the age band anywhere in the world.
 
According to Ian Watt, Executive Director of Old Mutual, "150 new shopping malls are projected by 2008. The expectation is that by 2007, there will be 5 million square metres of quality retail space across India and about half of it for fashion lifestyle retailing."
 
Pioneer Property Zone has leased the Bangalore project, a luxury destination which is expected to open next year, to one retailer. The Thane project, planned as a town centre development, will be anchored by a Shopper Stop departmental store and a hypermarket (Hyper City) and is expected to be ready in 2009.
 
Watt says a leasing campaign has also been launched by Pioneer Property Zone for a Mumbai lifestyle centre which is to be developed for Indian investors. "The centre is located in an upmarket area of Mumbai and forms part of a larger mixed use development. It will serve 385,000 households and a population of 2.2 million within a 5 km radius. The centre comprises three floors and will have a five-screen cinema complex, an expansive food court, 85 stores and 570 parking bays.
 
"In developing the tenant mix for the unique lifestyle centre, the team walked the streets of Mumbai, Delhi and Bangalore for two weeks visiting 1,400 stores, talking to owners, and checking merchandise, price points and product mix. As a result, an optimal combination of tenants has been developed, with anything between six and 20 alternates for each store."
Watt says Property Zone is also advising IVRCL, an infrastructure developer now engaged in an initial public offering in India, on a 125,000m² hotel, office and retail project in Hyderabad, and the Ozone Group of Bangalore, on a 100,000m² retail development in Chennai.
 
Old Mutual has been in India for three years and has been involved in five mixed-use center developments, with another nine on the boards. The average size is around 500,000 to 600,000 square feet.

Old Mutual does not invest directly in the projects but works with the developers in the conceptualization and design of the centers and provides property and leasing management. "We supplement our knowledge with local property and retailer knowledge," Watt said. "We remove risk for foreign investors who don't have to come in and set up their own property teams. We create an investment vehicle around the projects. And have worked with others on their developments, such as Liberty International."

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