Private Equity Investments touch Rs. 5500 Cr in Retail Real Estate since 2015 – JLL

In retail real estate industry, private equity (PE) investments have touched Rs. 5500 Cr, as of 2015, on increased interest for high-end shopping malls, according to JLL India, a real estate consultant firm. With increased investments, supply of real estate complexes would significantly boost and over 90 shopping malls are estimated to make entry to the market by 2022 at large cities of India. A JLL report “Indian Retail” says, “Retail sector in India has attracted the growth of over Rs. 5500 Cr from 2015 to first quarter of 2018. More than Rs. 1000 Cr has been invested in 2018. It is one of the best periods for retail industry these days.”

In retail businesses, private equity investments stood at INR 800 Cr. in the year 2015, INR 3000 Cr in 2016, and INR 700 Cr in last year, according to the report. JLL reported to big deals in 2018 so far, i.e. L&T land has been bought by Phoenix, CPPIB for INR 600 Cr in Bangalore, and Blackstone acquired 85% shares for INR 300 Cr in Nitesh’s mall Pune.

The steady growth of interest by equity investment giants has attracted retail mall developers to make their portfolio stronger and add three factors – customer experience, product, and catchment – to ensure success of a mall.

Private equity investors have shown a lot of confidence in upcoming trends of retail real estate in India and have made large value and commitments for long term for the sector. According to the report, “The 5-year plan for the future (2018-22) will estimated to have 90 more malls in around 34 million sq. ft. Around 62% of the new upcoming malls will fall in the category of superior malls and only 10% of malls will remain in last category. In the next five years, over 28% of malls will be known to be average.”

According to Country Head and JLL India CEO Ramesh Nair, developers use their previous learning and experiences to develop best quality malls. He said, “Some of the major factors responsible for the success will be variety, design, and strength of appeal, amenities and infrastructure. But the ability to turn expectations of shoppers for experience will be the major deciding factor.”

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