Future deal to make Reliance Retail bigger than world's No. 3 retailer

Future deal to make Reliance Retail bigger than world's No. 3 retailer

Reliance Retail after its deal with Future group will have control over 53 million square feet of retail space and 18 million sq ft of warehousing space. This is higher than Tesco, world's third-largest retailer, which has 50.1 million sq ft of selling space in the UK, its home market. Reliance Retail's real estate inventory after the completion of the deal will even be bigger than all the malls in India's top eight cities, the Economic Times mentioned in a report.

“After this acquisition, Reliance became the single-largest retail occupier in India, and this brings with it considerable clout. Their bargaining power will be rather unique and they will definitely exercise this to get landlords to revisit rentals applicable to them," the publication quoted Anuj Puri, chairman, Anarock Property Consultants as saying. “Since hypermarkets anyway come in at lower rentals, this should not impact other retailers’ rentals.”

Although the deal with Future group will increase Reliance Retail’s outlet count by 15% to over 14,000 outlets, its grocery segment may be the biggest gainer, with its store count more than doubling to nearly 2,000 outlets. Fashion and lifestyle outlets will rise by 23% to over 2,900. Reliance’s warehousing capacity will also increase by 80% to 18.2 million sq ft.

“With the Future Retail acquisition, Reliance is set to take a dominant position in the retail space in India,” the business daily quoted Anurag Mathur, CEO, Savills India. “There are several benefits due to the size, better rentals included. Range, value proposition, growth plans etc, will play an important role in defining key catchment locations and shopping centres.” Mathur said India is one of the most attractive retail markets.

With about Rs 30,000 crore in revenue more from the Future Group, Reliance's sales will soar to nearly Rs 1,93,000 crore ($29.5 billion) to control 30% of India's organised retail market, estimated at $89 billion.