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2021 PE investment in Indian Retail real estate

The promising year 2021

Shobhit Agarwal, MD & CEO - ANAROCK Capital
Shobhit Agarwal, MD & CEO – ANAROCK Capital

By: Shobhit Agarwal, MD & CEO – ANAROCK Capital

2021 PE investment in Indian Retail real estate

  • The retail sector was one of the worst affected due to COVID-19 which in-turn impacted PE inflows in 2020; major deals got pushed to 2021
  • 2019 saw total PE investments of approx. USD 968 million in retail real estate – best year b/w 2015-2019
  • 2021 has major investments in the pipeline – Blackstone into Prestige, GIC into Phoenix Mills, among others 
  • Between 2015-2019, retail real estate saw total PE investments of ~USD 2.86 billion.

Indian retail sector was one of the worst-affected due to COVID-19, which impacted private equity investments into the retail sector in 2020. The year was almost dry for the retail sector in 2020 against 2019 when it received total inflows of USD 968 million – the highest between 2015-2020.

The data on malls deployment in 2020 also reflects the sombre funding scenario, with just five new malls getting added during the year. Pre-COVID-19 data indicated that 54 new malls were to hit the market in 2020. Most of this new supply that failed to be delivered in 2020 has spilt over to 2021.

In 2020, Brookfield Asset Management concluded a portfolio deal of nearly USD 2 billion into RMZ Corp (approx. 12.5 mn. sq. ft. of its total real estate assets) including RMZ Galleria Mall. This was tagged as the largest-ever deal in Indian real estate. Another portfolio deal of USD 1.5 billion between Blackstone and Prestige was expected to get closed in December 2020, but its closure is now pushed to Q1 2021.

While there are various PE investors considering the retail space presently, meaningful investments are likely to occur only once the sector shows signs of bouncing back. 2021 does look promising:

  • Blackstone to invest into Prestige Group as part of a portfolio deal covering 8 malls
  • GIC is looking to invest in Phoenix Mills in 2021
  • The Warburg-Runwal platform is evaluating various assets in the retail space.
  • Lakeshore is also evaluating some retail assets

Data indicates that between 2015-2019, retail real estate saw a total of ~USD 2.86 billion in PE investments. Of this, 2019 was the best at about USD 968 million, followed by 2017, which saw total inflows of over USD 890 million. Among the top cities, NCR saw the maximum investments of approx. USD 755 million between 2015-2019, followed by MMR with USD 410 million.

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