Indian Shopping Centre Forum deliberates the outlook for malls amid e-commerce onslaught
Mumbai, 11th May, 2016: Real Estate Investment Trust Funds (REIT) in retail sector would be savior for all the investments locked in those high costs assets, according to a cross section of stakeholders at the India Shopping Centre Forum 2016.
Shopping malls, which have not gone on stream and for those which are operational but not milking attractive rental yields are not able to get the desired valuation. Some of the shopping malls assets that have been caught in the cross-fire of policy and regulations, have taken as long as eight years to see it go operational. According to reports, there are 255 operational malls in the top seven cities of the country and occupational response in lackluster with only 12 mall out 100 running successfully in the Delhi-NCR region while 10-15 malls performing well in Mumbai out of the 45.
According to Neeraj Bansal(Partner and Head of Building, Construction and Real Estate sector, KPMG in India)in his key note address in the inaugural session said, “There is around 70-75 million square feet of retail real estate space that is REITable including 16 million in Mumbai and 25 million in Delhi-NCR.”
Globally , Retail asset is almost a quarter of Global REITs value with 26% in retail, 12% in office, 27% in Diversified and 3% in Hospitality while in Asian region, retail accounts for 19%, office for 12%, diversified 56% and hospitality being 1%, Bansal said.
Apart from the above REITs, there are other forms like residential, self-storage, industrial, healthcare, infrastructure and specialty (movie theatre, telecom tower, etc.).
Unlike in India, where REITs are just about getting introduced, the countries with several decades of REIT exposure has seen higher percentage of success in US, Australia and Singapore and limited success in other countries like Hong Kong.
REIT accounts for 53%, 50% and 78% of the real estate market in US, UK and Australia respectively while it was a miniscule 6% in Hong Kong, Bansal said.
