'Factory, office, shop — everything overpriced': Top investor as Zara shuts Mumbai store

India's soaring real estate prices are making businesses uncompetitive, investor Alok Jain said on Tuesday. "The high real estate prices in India are the biggest reason for our uncompetitive-ness. Factory /office /shop /residential everything is over priced vs purchasing power...one can attribute some to unaccounted money but also to unavailability of good supply,” he posted on X.

Jain's remarks come as global fashion giant Zara shuts down its flagship Mumbai store at Hutatma Chowk. The store, spread across 51,300 sq. ft. in the heritage Ismail building, had been operational since May 2017. Despite its prime location and a two-year restoration effort involving local architects and Zara’s in-house team, the store struggled to sustain operations under high rental costs.

According to Propstack, Zara had signed a 21-year lease for the property in April 2016, agreeing to a monthly rent of ₹2.25 crore with a ₹13.5 crore deposit. Zara's sales failed to keep pace with the steep rental expenses, making the store financially unviable, Business Standard reported. 

Zara, which entered India in 2010 through a joint venture with Tata Group, currently operates 23 stores across 12 cities. Its total income stood at ₹2,774.64 crore in FY24, up from ₹2,562.50 crore the previous year, according to Tata-owned Trent’s annual report. The Inditex-Tata joint venture also houses another fashion brand, Massimo Dutti.