Mall developers welcome FDI in multi-brand retail

By Utkarsh Tewari and Akanksha Singh, Mine & Young
0
1289

The Indian government’s recent decision to allow foreign direct investment (FDI) up to 51% in multi-brand retail has been received with much optimism and some apprehension by the country’s real estate sector. Before we can analyse the potential impact of FDI in multi-brand retail, it is important to reflect on some of the important features of the policy.

Utkarsh Tewari Partner Mine & Young
Utkarsh Tewari
Partner
Mine & Young

The news of FDI in multi-brand retail brought smiles to developers of mall spaces all over the country. According to most of the developers, the new policy will have a two-fold impact on the Indian real estate sector: (1) it will increase demand for anchor space in cities with a population of 1 million-plus where the state governments agree to permit foreign retailers; and (2) rental price expectations will rise as not much quality space suitable for big-box retail would be available.

Room to grow

In India, per capita mall space in the seven largest cities is estimated at less than a square foot, with US and European averages being 20-40 times that of India. Steady GDP growth and a young population with more disposable income could attract investment for mall development in India. The comparatively low square footage and the steady increase in rental prices due to shortage of available quality retail space could trigger new projects.

You must be a subscribersubscribersubscribersubscriber to read this content, please subscribesubscribesubscribesubscribe today.

For group subscribers, please click here to access.
Interested in group subscription? Please contact us.

你需要登录去解锁本文内容。欢迎注册账号。如果想阅读月刊所有文章,欢迎成为我们的订阅会员成为我们的订阅会员

已有集团订阅,可点击此处继续浏览。
如对集团订阅感兴趣,请联络我们

Utkarsh Tewari is a partner at Mine & Young, where Akanksha Singh is an associate.

mine__young_logo

C-346, Defence Colony

New Delhi – 110 024

India

Telephone: +91 11 2433 7572, +91 11 2433 7573

Fax: +91 11 2433 7574

Email: info@mineandyoung.com