Blackstone subsidiary Nexus to launch its first mall in India
Latest News »
Bengaluru: Global investment firm Blackstone Group Lp’s India subsidiary Nexus Malls is set to launch its first shopping mall in the country in Seawoods, Navi Mumbai, expanding its retail portfolio.
Blackstone had bought about 1 million sq. ft of retail space in the Seawoods Grand Central Mall in 2016 from L&T Realty Ltd for Rs1,450 crore.
Nexus Malls was set up in June 2016 to own and manage shopping malls in the country. Typically, Blackstone buys out malls, which are then owned and run by Nexus. It has so far bought three other operational malls—Ahmedabad One (earlier known as AlphaOne Ahmedabad) and Mall of Amritsar (earlier AlphaOne Amritsar) from realty firm Alpha Corp., and a 50% stake in Westend Mall in Pune.
The Seawoods Grand Central Mall will be Nexus’s first new mall development, and with this, Blackstone now has 2.8 million sq. ft of shopping mall space in the country.
“The idea is to do a soft launch in the end of the month where we are opening the mall for customers with around 80 brands and then scale up activity, by adding up to 160 brands in next couple of months,” said Nirzar Jain, senior vice-president, operations, Nexus Malls.
The mall is part of a transit-oriented development project built around the Seawoods-Darave railway station. L&T Realty also has 4 million sq.ft of office space coming up as part of a 40-acre project in the area.
About 800,000 sq. ft of retail space in the Seawoods mall will be launched in the first phase, with 200,000 sq. ft or so coming later.
Globally, Blackstone has about 80 million sq. ft of retail assets currently under ownership. The New York-based firm has invested about $2.7 billion in real estate projects in India across 19 transactions and manages the largest portfolio of office parks in India. The company has been building its footprint in the mall space in the last two years, in many ways replicating what it has already done in the office segment.
Although Blackstone has been purchasing office assets since 2010-2011, it started buying retail assets such as shopping malls only in the last couple of years.
In the other three malls that Nexus operates, it has “enhanced” the assets in several ways, Jain said.
“The process may include adding more retail brands to increase the destination value, relocating anchor (store) spaces, changing food court location and of course to increase profitability,” he said.
In the Ahmedabad mall, for instance, it will add 140,000 sq. ft of additional retail space in the “bridge to luxury segment” to the existing 720,000 sq. ft mall.
After office space, investors are now looking to buy shopping malls. As many as 26 malls are scheduled to become operational this year in what will be the highest supply of shopping space in more than five years in the country. The southern cities of Hyderabad, Chennai and Bengaluru will see the largest chunk of the total of 10.86 million sq. ft of shopping space, with as many as eight malls opening in Hyderabad, according to estimates by property advisory Cushman and Wakefield.
Among the malls scheduled to open in 2017, the Seawoods mall and Virtuous Retail mall in Chennai are the largest.
“Well-located malls are definitely going to do well, mainly due to rising consumption, limited supply of good quality malls and customers again moving to malls for shopping,” said Pankaj Renjhen, managing director, retail services, JLL India.