The year 2016 may bring in cheer for India’s realty retail sector with PE investment into retail properties expected to be in the range of $75-80 mn as compared to $39 mn in 2015. (Reuters)
The year 2016 may bring in cheer for India’s realty retail sector with PE investment into retail properties expected to be in the range of $75-80 mn as compared to $39 mn in 2015.
“PE investment has been largely confined to a few retail players in India. In 2015, PE investment into retail properties alone was $39 mn, and in 2016, it is expected to be in the range of $75-80 mn, ” according to a JLL India report.
The report further said that the uptick in PE may go into select mall investments, especially in under-represented markets or for buyout of mature assets. Realters will further work on their strategy and adopt a flexible approach customised to work for different micro-markets.
The FDI inflow in retail trading increased between October 2014 and September 2015 to $70.75 million.
“The inflow– coupled with economic stability, liberalisation of the FDI policy and improvement in the consumer sentiment – is expected to help global brands witness a very conducive environment for investment into Indian retail as well as retail real estate sectors. Add to this the steady rise in shoppers’ desire to consume foreign brands due to increased brand awareness, and the scenario looks even more inviting,” the report added.
Global brands will look to enter India, realising this potential, thus increasing the development of world class malls. This will lead to emergence of stronger retail real estate players, who may manage to get private equity (PE) investment in the coming years. PE investment has been largely confined to a few retail players in India.