According to the media statement of Chief Operating Officer Jayen Naik, India’s inaugural retail real estate investment trust, Nexus Select Trust, which is backed by Blackstone, has been planning to further expand in the southern region of the country.
Naik also added, "We are currently in discussions to acquire approximately 1 million square feet (msf) of mall space in one of the southern metro cities, with an official announcement expected in the first quarter of FY25."
He also told about the plans to reinforce the company's presence in southern cities by incorporating additional Grade A malls.
Though he did not share any detail about the deal of acquisition, but it is evident that, Nexus is targeting to add 1.5 msf of retail space to its REIT portfolio annually.
Nexus group was founded in 2015, and currently they are boasting their market position with 17 top-notch malls spanning over 10 msf. During the previous year, in the month of May, the company had introduced a Rs. 3,200 crore initial public offering (IPO).
Naik has also highlighted the strategic shift towards acquiring brownfield projects, which emphasized the company’s desire to integrate acquired malls into its structure. Nexus is eyeing on expanding its growth trajectory by doubling its mall portfolio to 20 msf in following 3-5 years.
Naik said, "Till today, we have been acquiring malls that have completed construction or nearing completion. However, now we also plan to expand our portfolio by considering the acquisition of brownfield projects."
Brownfield projects are referred to those lands which were used previously, but currently it is lying unused.
During, Q3 of FY24, Nexus reported a consolidated net profit of Rs. 106 crore and distributed Rs. 303 crore to unitholders.
The occupancy rate of the company stood at 97%, with a re-leasing spread of 24%. Though the starting of FY23 was a bit sluggish, but Nexus exhibited 8% increase in footfalls and a 14% rise in consumption in the first nine months of FY24. Reportedly, the tenant sales grew by 8% year-on-year in Q3. Nexus is actively expanding its opportunities in Tier II and III cities, aligning with rapid urban development in these centres.
Naik explained that, success of their malls in cities like Mangaluru and Bhubaneswar, is driven by growing consumer aspirations and adoption of e-commerce. In Q3 FY24, cities like Mangaluru, Bengaluru, and Mumbai witnessed significant leasing and the company is also actively looking at expansion in eastern parts of India, including Bhubaneshwar.
Naik also added that, electronic segment and self-grooming brands like healthcare and beauty has shown a tremendous growth in retail portfolio. Currently, the company's total net operating income (NOI) is projected to grow organically by 17% to Rs. 1,897.1 crore in FY26 from Rs. 1,619.8 crore in FY24.
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