Indian retail real estate sees rising investment

By

Isabelle Crossley

Published
Nov 23, 2018

The Indian retail real estate sector is gaining increased foreign investment due to a relaxation of Foreign Direct Investment (FDI) regulations, states the latest CBRE South Asia report.

The report found that the relaxation of FDI regulations has made it easier for foreign firms to invest in India and the Indian retail market presents a large growth opportunity.  

“There is immense potential for growth in the retail segment that has been aided by the recent relaxation in investment norms by the government,” the Chairman of India and South East Asia for CBRE told ET Bureau. “With a population base of over 1 billion, the Indian market provides a wide customer base which is poised to be the 3rd largest consumer market by 2025.”

The report listed Blackstone Group, Canada Pension Plan Investment Board (CPPIB), Singaporean sovereign wealth fund GIC, and The Xander Group as current foreign investors in Indian retail real estate. Warburg Pincus, a private equity firm, is also about to invest $1 billion in an alliance with Runwal Group.

Much of the investment in retail real estate is for the development of malls, said the report. Although malls are under stress to remain relevant in an age of e-commerce, malls are still expanding through India. The report lists a growing consumer demand, policy changes, and a more stable political situation as reasons why retail outlets are being launched at a fast pace through India.

The report also stated that foreign brands looking to enter India in popular sectors such as fashion and beauty will be presented with more possibilities for their retail expansion in the country. Customers have increased spending potential even in non-metro tier 2 and tier 3 locations.