German retail giant Metro Cash & Carry and India's emerging retail venture Reliance Retail have roped in the property services group of ICICI Bank for identifying retail properties for its proposed pan India expansion.
The retail companies, which are planning a rapid expansion in the next two years, will use the expertise of the Bank's recently launched property services group to identify and acquire properties like malls and other retail spaces in various locations in the country.
While Metro Cash & Carry has studied the options of expanding into Tamil Nadu, Andhra Pradesh, West Bengal, Delhi and Mumbai next year, Reliance Retail - the newly launched retail initiative of the Mukesh Ambani-led Reliance group - has plans to open over 10-11 stores in all big cities in the country over one year's time.
Sources said Metro Cash & Carry was already finalising a property at Bhandup in Mumbai through ICICI Bank to enter Maharashtra state and is scouting for more locations in Mumbai and other cities.
ICICI Bank had ventured into this specialised service for the booming retail sector about an year ago. With this, it provides services such as property tracking, identification, due diligence and negotiation with property owners among others.
Metro Cash & Carry India, which set up its first distribution centre in Bangalore, is likely to have five to six distribution centres in Tamil Nadu with a minimum requirement of about seven acres each covering 125,00 sq ft.
The investment for each centre would be up to Rs 70 crore (Rs 700 million). The company, a member of the German Metro Group, entered India in 2003 and has two distribution centres in Bangalore at present.
However, it is not yet clear that the company will get into consumer retail with local partners in the country. Since the current law does not allow FDIs in front- end retail in India, it is present only in the cash and carry (wholesale) format currently.
On the other hand, Reliance Retail will open neighborhood supermarkets in almost all the cities.
Reliance Retail, which last month opened its first 11 stores in Hyderabad, plans to open stores in another 783 cities and towns and 6,000 smaller towns by 2011.
