Indian Retail Sector to See PE Investments to the Tune of US$80 Mn, Says Property Consulting Firm

Real estate consulting firm Jones Lang Lasalle (JLL) has said that India may outperform expectations as far as investments in the retail sector are concerned. According to the firm, private equity investments to the tune of US$75-US$80 mn are likely to flow into the country’s retail sector in 2016. The property consultant has said that foreign direct investments in retail trading have already shown an increase in the recent months. Between October 2014 and September 2015 alone, investments increased substantially to reach US$70.75 mn.

What’s Helping Retail Investments in India Grow?

The real estate consulting company has said that more PE investments will ride on the coattails of the success of the Indian economy, which is expected to post among the highest growth rates worldwide this year. Anticipation about the high investments in the Indian economy are also rising on account of factors such as the further liberalization of the economy with the government having made investor-friendly tweaks to the FDI policy. Consumer sentiment, too, continues to remain positive, creating a very favorable environment for the growth of investments in the Indian retail sector.

Thanks to these positive changes, many global brands are finding the Indian retail sector an attractive space for growth and expansion. The property consulting firm also reckons that an increasingly aspirational generation of shoppers in the country is stirring up a high demand for consuming luxury brands – something that will prompt large names from the retail industry to set up shop in India. Brands such as Wendy’s and H&M have set a precedent for many other global names to foray into what is becoming an extremely dynamic space.

What do the Investment Numbers Look Like?

The cumulative effect of these factors will be seen on investments in the Indian retail sector. The country will see the construction of more world-class shopping malls, each endeavoring to distinguish itself with a superlative ambience and design.

According to JLL, private equity investments in the country were confined to only a few retail industry players. As of 2015, PE investments in retail property in India approximated US$39 million. This year, that number is expected to rise to about US$80 million.

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