New Delhi, Oct 15 India's Real Estate Investment Trust (REIT) ecosystem, dominated by commercial office assets, is poised for a big shift, as the next wave of growth can come from retail malls, shopping centres, and mixed-use developments, a report said on Thursday.
Consolidation of quality retail assets, steady consumer spending, and rising urban incomes are driving this shift towards retail REIT dominance.
India’s listed REIT ecosystem is currently dominated by office assets, with only one retail-centric vehicle. ANAROCK forecasts the launch of 2–3 retail REITs in the next three to five years as institutional portfolios become partially listed as Grade A malls are now maturing into stable, income-generating assets, said Anuj Kejriwal, CEO & MD - ANAROCK Retail.
Our estimate of the Indian retail REITs' potential to become an Rs 60,000 – Rs 80,000 crore market in the next five years assumes only partial listings of various institutional portfolios, he added.
This shift in trend will mirror the path of mature economies, where retail REITs form 15 per cent to 25 per cent of total REIT market capitalisation, the report said.
Institutional players are expanding aggressively in high-income, consumption-driven clusters of Tier-II cities such as Indore, Coimbatore, Surat, Bhubaneswar, and Chandigarh.
“The top five mall owners will control 60 per cent of the overall organised stock. New retail REITs will institutionalize the market further We will see a wave of mixed-use redevelopment, with older malls repurposed into integrated lifestyle districts,” the report noted.
New projects averaging 1-1.2 million sq. ft are being planned, with entertainment, F&B, and lifestyle retail accounting for nearly half of new mall space, according to ANAROCK Research's data.
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