Us Retail Major Kroger Plans Entry into Indian Real Estate

January 2, 2008	(Be the first to rate this story!)  Loading ...
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The $66-billion US based grocery giant, Kroger is all set to enter into Real Estate India. According to reports, the company representatives have already met 3-4 prominent real estate companies of India for joint ventures.

Some prominent sources said that Kroger is primarily interested in jointly developing new FDI-compliant commercial projects or buying into existing ones. Interestingly, America No. 3 general retailer behind Wal-Mart and The Home Depot runs all its nearly 2,500 supermarket stores in the US.

But the entry into real estate India doesn’t seem to be very surprising, seeing the stagnant US market. But what makes it look into the Indian realty sector and not retail? For one, Kroger can hold a majority stake in a commercial real estate project in India, while it’s not possible in the multi-brand retail space.

Another reason could be the backlash on organised retail. “It’s quite possible that Kroger has decided to refrain from retail due to the political sensitivities involved,” the source said.

According to experts, Kroger’s key objective behind entering Indian realty space is to gain a holistic understanding of the Indian consumer market. That is why, they add, the US major is likely to get into JVs with local partners even though 100% FDI is allowed in commercial real estate. According to them, being in the business of commercial real estate would give Kroger a good exposure to the retail market as well.

For retailers, setting up shops at the right place and at the right price is going to be the biggest challenge. If Kroger is able to block sufficient real estate, it would have an edge over competition when it enters the retail business. Of late, unavailability of viable property has made retailers put on hold their expansion in top cities.

News Published Under:   Retail Market in India |

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