Basis a report, during the last two years, the PE (Private Equity) investments into the Indian retail sector has doubled at $1.2 billion with the relaxation of FDI policies – 51 per cent FDI in multi-brand ad 100 per cent FDI in single-brand retail under the automatic route (against the previous 49 per cent) where the total private equity inflows in the Indian retail sector between 2015-2018 stood at $1.84 billion out of which $1.2 billion was driven between 2017-2018.
The PE investors infused almost half of their total investments into the retail sector in the Tier II and Tier III cities including Amritsar, Ahmedabad, Bhubaneshwar, Chandigarh, Indore and Mohali. These cities were high on the radar of the PE investors as the shopping malls in Tier II & III cities have performed well thereby increasing the rentals and profitability causing PE investors to give a thought about investing outside the Tier I cities.
Mr. Pradeep Aggarwal, Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development, Founder & Chairman – Signature Global 27 says, “The retail industry in the Indian real estate sector has been profitable as the PE investors are showing more interest in their investment. Tier I and Tier II cities have performed along with the Tier I cities. The success of retail depends on the target audience which is also geographically-agnostic as the success of the retail depends on the spending power of the people. The developers targeted the Tier II and Tier III cities depending on the same thereby coming out to be successful in their investments.”