Resurgent Retail - Powered by Rising Domestic Consumption

RESURGENT RETAIL

We believe our estimation of new mall space supply needed, is a conservative one as this analysis does not account for the risk of obsolescence of the asset and its withdrawal from the current Grade-A mall footprint. Within the Grade-A universe that exists today, our preliminary observations suggest that approximately 9-10% inventory could face risk of becoming obsolete in the medium-term as consumer preferences are evolving very fast and some malls may not have the capacity to accommodate dynamic changes. Not surprisingly, therefore, we are noticing a revival of private equity interest in retail real estate after a dip in sentiment seen in-and-around the COVID period. Interest of institutional investors in this asset class is likely to rise, and possibly it will result in more joint development agreements between PE investors and mall developers in the near future.

Private equity investments in retail real estate (USD Mn)

1000 1200 1400

1,156

785

876

200 400 600 800

390

269

297

160

17

0

2015 2016 2017 2018 2019

2020 2021 2022 2023

-200

Source: C&W India Research analysis

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