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| Anuj Puri |
Anuj Puri, Chairman and Country Head
of JLL India, a
leading market research analyst, speaks about the growth of Indian retail,
logistics and warehousing sectors, investment scenario and impacts of
government’s policies on the sectors in 2016. Excerpts…
- What are investment options Retail, warehousing and
logistics sector offer to Overseas and PE funds in India?
Anuj Puri: Apart from the favourite asset classes of office and
residential, private equity (PE) has been taking increased interest in
warehousing, logistics and retail real estate. PE investors and overseas
developers are already looking at opportunities to enter India’s industrial and
warehousing sector by investing in various development projects.
Investors from other nations, in general, and Asian
countries such as China, Japan and Korea, in particular, have shown a lot of
interest industrial development projects. A few key announcements that show
their increasing interest are:
·
- ‘ Wanda Industrial New City’; Dalian Wanda Group
- ·
Industrial Parks by China Fortune Land
Development Company Private (CFLD)
- ·
Development of smart cities by ZTE Corporation
- ·
Neemrana Japanese investment zone
- ·
Mandal Becharaji, Japanese investment zone
- ·
SUPA, Japanese investment zone
- ·
Chinese industrial zone in Vadodara
- ·
Ascendas-Singbridge exploring multiple
portfolios of industrial and logistics parks across India.
- What will be the impact on logistics and warehousing
sectors when GST becomes a reality?
Anuj Puri: With the implementation of Goods and Service Tax (GST),
warehousing and logistics’ spaces will start to see a consolidation of assets.
Unlike earlier (small assets in various states), developers will focus on the
development of large-scale, technologically advanced warehouses.
Such assets
will attract private equity (PE) investors, since they can deploy a larger
amount in fewer assets, making monitoring easier. If they perform well, such
assets can even fetch a better valuation when monetising through REITs or other
ways.
- How do you find the demand for commercial retail assets
in 2016?
Anuj Puri: In the past few months, key leasehold retail assets across
the country have come on the PE radar. A few reasons include well-managed
Grade-A malls starting to enjoy better occupancy with rent escalation on the
cards, after a lull of six to seven years. Such well-managed assets/ entities
will attract investor focus.
A few key deals seen in 2016 were:
- ·
GIC bought a 50% stake in Viviana Mall of Sheth
Developers in Mumbai
- ·
Blackstone acquired the retail portfolio of
Alpha G Corp through an entity level deal
- ·
Blackstone has progressed well in acquiring a
stake in the retail assets of L&T in Navi Mumbai
- ·
Blackstone buying 50% stake in Pune’s Westend
Mall
- What are the impacts of Government’s recent regulations on
retail sector?
Anuj Puri: Leasehold retail property usually has a higher probability
of success as the developer is actively involved in the key functions of mall
management, especially tenant management. Various new regulations like easing
foreign investment for single-brand retailers, longer shopping hours and an
updated framework for establishing Real Estate Investment Trusts (REITs) have
attracted the attention of various private equity funds like Blackstone,
Xander, GIC, Morgan Stanley, towards the Indian retail real estate sector.
Various retail mall developers are also looking to sell their existing retail
assets and raise funds for expansion.
