New Delhi, 3 October (IANS). With the increasing participation of institutional player in the Indian retail real estate sector, about 30-35 percent of the 650-run malls across the country are now institutional grade. This information was given in a report on Friday.
The rapid development of this sector is a saga of quality and institutional consolidation and a major change from quantity-driving growth.
According to the latest report by Encarock Research, “The top seven cities had 22 percent of the Invetry Grade A mall in 2015, which is estimated to increase to 60 percent by 2027. Meanwhile, the vacancy has come down from 19 percent to about 9 percent. This is a big sign of quality and demand improvement.”
According to the report, this trend is the most visible among the top players, which have 58 malls in 34 million square feet in total and in the next 3-5 years, 45 new malls with prime retail space over 42.5 million square feet have in the next 3-5 years.
Anuj Kejriwal, CEO and MD of Enarock Retail, said, “Institutional investment is spreading rapidly in other cities outside the metro cities. Chandigarh, Indore, Surat, Bhubaneswar and Coimbatore are new growth centers for organized retail, which have a high -especially population and growing power.”
He said that the changes in the Indian retail industry are due to the changing expectations of consumers and the preferred space of global brands.
However, growth also depends on institutional investment, which means that mall assets should also be attractive to private equity and REIT investors.
Despite the sharp changes, India is currently behind developed economies, as the country has only 110 million square feet of quality retail stock, while the US has more than 700 million square feet of quality retail stock and more than 400 million square feet in China, where mall assets are almost completely institutional ownership.
The report said that India’s frequent urbanization and retail sales productivity of Rs 1,200-1,600 per month in Grade A Mall shows the country’s development capacity.
-IANS
SKT/