New Delhi: India ranks second among top 20 countries with the strongest momentum in retail real estate index and it lags behind China due to weaker investment prospects and a smaller presence of global retailer, according to a report by global property consultant Jones Lang LaSalle.
"Our Retail Real Estate Momentum Index identifies 20 markets with the strongest retail real estate momentum. In top positions are China, India, Indonesia, Turkey, Brazil and Vietnam," JLL said in its report released Wednesday.
The index aims to identify those countries with the strongest momentum in terms of consumer, retailer, developer and investor activity.
China and India, unsurprisingly, top the Index, due to their favourable demographics, rapid urbanisation, strong consumption growth and significant expansion of modern retail infrastructures, it said.
However, the consultant observed that "India falls short of China due to weaker real estate investment momentum and a smaller international retailer presence".
On the future prospects, the report said "India will remain a two-paced market. From a retailer perspective, the country is clearly a key destination and although the retail market is yet to open fully to international retailers, when it does, major international retail groups will expand rapidly across India," JLL said.
Although, India has permitted 100 percent FDI in single brand, it is yet to allow FDI in multi-brand retail.
The report said "...From a retail investment point of view, it is still unlikely that India will see a boom in foreign investment in the short to medium term."
Commenting on the report, JLL India Chairman Anuj Puri said: "The Indian retail sector is in a dynamic state of re-invention, with the initial hit-and-miss approach based on perceived absolutes rapidly giving way to superior malls, more business-conducive locations and better business models."
"We are able to track these positive market modifications by the way in which demand for retail real estate is changing in India. There is a clear thrust towards international benchmarks, with growing market knowledge and ever-increasing aspirations driving current and future growth," he added.
JLL report also projected that "annual investment volumes in retail real estate could hit USD 180 billion globally by 2020 due to increasing cross-border activity, showing growth of around 50 percent on the projected volumes for 2012 (USD 110-125 billion)".
The report confirms that in the last decade, more than USD one trillion of retail real estate has been traded around the world. Global direct investment has averaged more than USD 100 billion per year since 2004 and in 2011 annual volumes hit USD 122.5 billion.