Future Group’s Kshitij into Mall + Realty Venture

Kishore Biyani was doing an excellent job [in our opinion] by taking the best advantage of first mover into the nascent organized retail sector and completely focusing on Retailing. However, the group now wants to enter Retail and Mall management and dveleopment through Kshitij Retail Systems..

The goal of Kshitij Retail Systems will be to be a Mall development and management company – from procurement and maintenance of equipment, leasing out shops and advertising space to interested parties, security, accounts, common area maintenance and marketing.

Future Group will launder some of its retail properties such as Pantaloon stores, CR2 or Sobo Central and some retail assets owned by its real estate domestic fund, Kshitij, to the new entity. The new entity will also acquire malls from real estate developers. The company will focus on centers located in prime trade areas. Cross holding among various group companies is another area of concern as transparency is an issue.

The Balance sheet of Pantaloon Retail is already strained and moving into Retail Management is fine but Retail Realty will dig a deep hole into their pocket and may affect other flourishing retail businesses of the group.