PE funds betting on malls for higher rental yield, rising consumption

PE funds seem to be betting on the attractive rental yields and appreciation in asset prices

Recently, Warburg Pincus, a US-based private equity (PE) fund manager, along with Indian partner Runwal, announced plans to invest $1 billion (nearly Rs 7,000 crore) to build malls in this country.

Blackstone, its US counterpart, has already invested a similar amount to acquire malls; it has built a portfolio of nine. Global sovereign and pension funds such as ADIA, CPPIB, and APG have also invested over $1 billion in different mall investment and development joint ventures (JVs) in India. Very few exits have happened till date in this space, except Singapore’s CapitaLand exiting its JV with Prestige Estates in the south. 

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