Indian retail real estate attractive again for global investors

During the entire 2008 calendar year, PE investment in retail real estate stood at US $267 million.
“As of May 2016, the total PE investment into Indian retail real estate stood at US $149 million or Rs 10 billion. This has beaten most industry experts’ expectations,” JLL India Managing Director – Capital Markets & International Director Shobhit Agarwal said in a report.
The figure has exceeded investment attracted by the Indian retail real estate industry in the year 2007 and could very well cross the previous high seen in 2008, he added.
“PE investment into retail almost dried out after 2008 until the year 2015, with 2012 being the only exception,” Agarwal said.
Stating that retail real estate has become attractive again for PE investment, he said investment by PE biggies into retail properties would continue in the next six months.
“Economic and political stability, liberalisation of the FDI policy by the government and improvement in the consumer sentiment are some of the factors working in retail and retail real estate’s favour,” Agarwal said.
Quality mall space is coming up with strong pre-commitments, which indicates that retailers also continue to remain bullish about the long-term India consumption story, the consultant said.
“Looking at the scale of ongoing deals, it seems like PE investment is back into India’s retail sector with a big bang. It also goes on to show how retail real estate is back in favour with the global investor community,” he said.
Singapore-based GIC invested US $149 million into Sheth Developers’ Viviana mall at Thane earlier this year, the report said.
JLL India said that there are a few deals, apart from one big deal, in the works. “If any of these go through, 2016 could prove to be a historic year as far as PE investment into the retail real estate industry is concerned”.