Turning On Gravity

Retail real estate is compelling for investors again
Riley Pitzen/Unsplash

Just after the second wave of lockdowns began, a monumental surge took place in the online shopping space with e-commerce players hearing more ka-ching than they had ever heard before. 

But does that mean e-commerce will continue to grow and people will be making fewer trips to shopping centres? Well, no.

Retail and consumer behaviour analysts say that there is still a very strong social and recreational aspect to shopping and that is never going to change.

Context, Please. 

Shopping centres are back, thanks to an accelerated vaccination drive, policy reforms, and increasing urbanisation. Also, with more investors looking at REITs and fractional ownership of commercial real estate, the sector is expected to keep growing from here on.

Currently, organised retail real estate in India is at 64.3 million sq. ft. as of H1, 2021 and is expected to cross 82 million sq. ft. by 2023.

Retail Assets Pulling Billions Again

In Australia, one of the hardest hit countries as far as urban lockdowns are concerned, investors have roared back into the shopping mall space, checking out $4.52 billion worth of assets in anticipation that the pandemic-hit sector will rise again and provide high-yielding returns.

Such investments have defied the impact of the global pandemic, which forced most non-food retailers to shut shop for many months. 

But with restrictions easing, investors are rushing to get a foothold in brick-and-mortar retail.

Zooming Out

The return of institutional money into organised retail real estate, combined with strong private investor demand, will lead to increased transactional activity in 2022, global experts predict. 

Clearly, the comparative returns and value proposition are compelling, especially with big mall operators rebalancing portfolios, allowing incoming investors to strategically acquire some of the world's best retail assets. 
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