Virtuous Retail South Asia is in talks with Nexus Malls and Lake Shore India Advisory to sell all its malls for $400-500 million (about Rs 3,500-4,000crore).
The retail company, a joint venture between Singapore’s private equity firm Xander Group and Dutch institutional investor APG, runs half-dozen malls in Chennai, Bengaluru, Chandigarh, Amritsar, Nagpur and Surat.
In addition to the six operational malls, the portfolio will include two under-construction malls in Delhi and Mumbai as well, said three people aware of the deal.
Nexus Malls is the Indian retail portfolio arm of investment firm Blackstone Group while Abu Dhabi Investment Authority owns Lake Shore India Advisory.
Blackstone group is preparing for India’s first retail real investment trust (REIT) which is likely to be listed by June this year, with valuation of about $3 billion, including malls of Blackstone-Nexus and Select City, according to people in the know.
“Indian retail has rebounded significantly and both retailers and mall owners are benefiting from strong demand fuelled by increased consumption. The upward curve is very sustainable. It’s a very good time for retail stakeholders across the value chain,” said Shobhit Agarwal, managing director, Anarock Capital.
“Whatever steam the sector lost during the Covid-19 pandemic has returned multifold and the momentum shows no signs of slowing down. There is a huge demand for well-managed retail spaces, especially in tier-I cities. Given the robust consumer sentiment, investors are interested in acquiring quality retail assets which provide steady incomes and capital appreciation,” he said.
Xander Group and Lake Shore India Advisory did not respond to ET’s emailed queries while Blackstone and APG declined to comment.
Virtuous Retail South Asia’s India portfolio currently includes developments across 13 million square feet.
In 2019, Anarock Capital had facilitated a deal where Virtuous Retail South Asia concluded a $100 million deal with TRIL for two retail malls, one each in Nagpur and Amritsar.
Along with the bigger cities, tier-2 and tier-3 cities are also on the radar of many PE funds which see these cities actively driving retail in the future. Several PE and institutional investors are also exploring the option of coming out with REIT for their properties, especially shopping malls and retail spaces.
REITS are public listed companies that house rent generating commercial, residential or retail properties. India has three REITs for office space but none dedicated to retail assets.
“Consolidation in the leased assets is becoming a trend and more and more international funds are opting for the same. Consolidation is creating new opportunities for these international funds, with secure returns. We will see a lot more such consolidation happening in the coming few years, as many new funds will keep investing in such real esate assets, especially Malls,” said Susil S DUNGARWAL, Chief Mall Mechanic, Beyond Squarefeet, a shopping mall specialist company.
