Somany group company Hindware Home Retail on Wednesday said it is in talks with real estate developers for revenue sharing partnership, as it looks to cash in on the decline of retail rentals.
The company is also planning to invest Rs 250 crore by 2012-13 for setting up another 48 outlets of its store — Evok in metros, tier I and II cities, as it aims a turnover of Rs 400 crore from the retail business by then.
"We are in advanced stages of discussion with developers in various cities to have our flagship stores in their properties under revenue sharing model. The recent downslide in retail rentals have made most of them much more receptive to the idea," Hindustan Sanitaryware & Industries vice-president and business head DK Jairath said.
He, however, did not specify the real estate developers that the company is in talks with, saying "They are mostly North India-based." Earlier, high rental costs had forced retailers to slowdown their expansions, but in the recent past declining rentals have forced realtors to look at ways to shore up demand. According to Cushman & Wakefield, retail rentals had gone down by upto 20 per cent in the third quarter of this year. Jairath said the revenue sharing model would be more beneficial, as it would allow them to select sites where the revenue turnover is likely to be assured. He said the company has decided to go ahead with its expansion plan despite the current slowdown.