India, China lead list of top 20 retail real estate destinations

India and China top the list of 20 destinations with the strongest retail real estate momentum with shopping centre stocks projected to grow by around 15 per cent per year until 2020. India, however, trails China due to weaker real estate investment momentum and a weaker international retailer presence, according to international property consultant Jones Lang LaSalle (JLL).

Despite Indian market fundamentals being firmly in place, the entry and exit options had been rendered extremely limited thanks to regulations. The lack of clarity around potential exit options also meant that major foreign developers were hesitant to enter the market, the report said.

According to JLL, while the government could eventually ease such restrictive policies; it was probable that foreign groups would continue to focus their emerging markets' strategies elsewhere over the short to medium term.

According to Anuj Puri, chairman and country head, Jones Lang LaSalle, there was a clear thrust towards international benchmarks, with growing market knowledge and ever-increasing aspirations driving current and future growth. He added, that said, the (Indian retail) sector was still hamstrung by restrictive foreign investment policies, which were hampering the country's potential for attaining faster growth.

JLL, is expecting a balancing out general of capital flows towards Asia Pacific, due to favourable demographics and the growth of the middle classes. By 2020, Asia Pacific was forecast to account for 26 per cent of global retail investment volumes, up from 22 per cent currently and from only 11 per cent in the mid-2000s.

According to the report, a significant improvement in both operating environments and transparency levels in Asia's larger markets, such as China and India, could push the region's contribution closer to 30 per cent.