Demand for Retail Space in India Surges

According to Los Angeles headquartered CBRE’s India Retail MarketView Report – H1, 2017, during the first 6 months of the year, there were 70 new entries/expansions by global and domestic brands across the cities of Mumbai, Delhi-NCR and Bangalore. Seven new global brands entered the country and investments into the segment by PE firms/wealth funds touched $200 million.

 Anshuman Magazine, chairman, India & South East Asia, CBRE said, “Our ranking on the 2017 Global Retail Index for developing countries as well as continued investment by private equity players is a demonstration of the sustained preference of international brands to set up, or expand their operations in India. With several legislation and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier I and II cities.”

City Highlights

NCR

  • Approx. 200,000 square feet of fresh supply entered the market
  • Low vacancy levels led to select micro-markets in the city witnessing rental appreciation for prime retail developments

Mumbai

  • Leasing activity was driven by domestic F&B operators and foreign retailers from various segments
  • Over 1 million swuare feet of supply was added with opening of the  Seawoods Grand Central Mall
  • Rentals on Linking Road recorded a minor correction while rental values across other high streets and organized retail developments remained largely stable

Bangalore

  • Approximately 300,000 square feet of fresh retail supply entered the market
  • Rental values across high streets and shopping centers remained stable
  • In the coming quarters, sustained traction from both global and domestic brands may lead to rental appreciation in organized developments in the Central, Eastern and Western locations

CBRE says: Going forward, to effectively operate under the new GST regime, retailers will need to review their product pricing based on market expectations, align their supply chain and procurement strategy, rework their distribution channels, and ensure greater compliance to laws to be more cost-effective.

A Mall

August 19, 2017   No Comments

Blackstone’s Strategy in India Yields Rich Dividends

Tuhin Parikh, senior managing director for real estate in Mumbai at the New York City-based PE and asset management firm Blackstone, has aggregated a 100-million-sqft portfolio in India. Parikh and Blackstone scripted a gold rush into the country’s rent-yielding office spaces, which saw Brookfield Asset Management, Qatar Investment Authority and others investing in India.

The Times of India reports: Parikh struck acquisitions, joint ventures and made strategic investments to build the India portfolio that dwarfs Goliaths such as Boston Properties and Vornado Realty in the U.S. Now, Blackstone plans to list one of its joint ventures, Embassy Office Parks, which bankers expect to fetch a $4-5 billion valuation. Later this year, Embassy REIT will list 35 million sq ft operational and pre-leased offices, with $240 million in annual rentals, to raise as much as $1 billion. This provides both Blackstone and Embassy with liquid shares in a  publicly listed trust, offering inflation-hedged returns to investors fleeing gold and residential markets.

Real Estate

Through strong local partners and outright acquisitions Parikh has 27 projects on the ground across six cities in India. Global investors Canadian Pension Plan and GIC of Singapore, among others, are looking to invest in India’s realty market.

August 12, 2017   No Comments

India’s Mahindra Group to Set Up Tractor Factory in U.S.

When asked about expanding operations, Mahindra USA president and CEO Mani Iyer said, “It makes sense down the line to have a factory in the U.S.” The company will move to the bigger segment of tractors — up to 160 hp — with the setting up of the new facility, he added.

A Mahindra Tractor

“We already have invested a lot, whether in brand, technology, distribution points, dealers and people. The number of products being made for the U.S. market alone is very high. It will call for more localization,” Iyer said.

BusinessLine reports that with a revenue of $600 million annually, the company is a major player in tractors ranging up to 120 hp. It is third in terms of market share in the segment, just behind Kubota and John Deere.

Mahindra USA has about 2,500 employees of whom over 99 percent are Americans. “Today, we are considered very local. We are an American company headquartered in India,” Iyer quipped.

August 7, 2017   No Comments

Mobile Data and Subscribers to Grow Exponentially in India

A report by Mumbai-headquartered global analytical company CRISIL says that mobile data consumption in India grew 24 times in last five years, and is set to grow four-fold in the next five years through fiscal 2022, with data subscribers expected to double beyond 900 million and penetration reaching 80% from 40% at present.

Other key takeaways reported by Telecomtalk.info

  • Faster penetration will be supported by a continued drop in tariffs
  • Telcos will need to focus on increasing per-subscriber usage to bolster incremental revenues
  • The per subscriber usage will reach 2.3 GB per user by 2022
  • Rapid expansion in Wi-Fi infrastructure will cause a shift in data traffic to fixed lines after fiscal 2022
  • Videos contribute nearly 80% to total data traffic (direct and indirect) in India
  • Video viewership is dominated by regional languages – nearly 60% in Hindi and nearly 35% in other regional languages
  • Time spent on mobiles by Indians is already in line with evolved markets

The report added that India lacks in Wi-Fi hotspots, which is reflected in the time spent on surfing internet over Wi-Fi being a low 18% compared with 50% in the U.S. It suggested that “India needs to catch up significantly with close to 35,000 Wi-Fi hotspots.”

an iPhone

August 4, 2017   No Comments

Marigold Capital Set to Acquire The Leela in Chennai

Mumbai-based private equity fund Marigold Capital and Investments is set to acquire the Leela Group’s 326-room hotel in Chennai, India, for approximately $109 million. The fund specializes in buying debt-ridden hotels and commercial real estate properties and turning them around.

Mumbai-based JM Financial, an investment bank that is the advisor to the sale said, “The deal with Marigold is in the documentation stage where the final agreement will be drafted.”
The Economic Times reports that last year, the JM Asset Reconstruction Company sold the Leela Group’s hotel in Goa to a Malaysian conglomerate MetTube SD BHD for about $113 million.
The Leela Chennai

June 12, 2017   No Comments