Sid Yog, founder of Xander Group and chairman of Virtuous Retail. APG and Xander Group had set up Virtuous Retail in November 2016 to acquire a portfolio of shopping malls from a Xander-sponsored fund for about $300 million. Photo: Hemant Mishra/Mint
Sid Yog, founder of Xander Group and chairman of Virtuous Retail. APG and Xander Group had set up Virtuous Retail in November 2016 to acquire a portfolio of shopping malls from a Xander-sponsored fund for about $300 million. Photo: Hemant Mishra/Mint

Dutch pension fund APG puts in $175 million in Virtuous Retail

Virtuous Retail, a joint venture of APG Asset Management and Xander Group, will use the funding for acquisitions and greenfield project developments

Bengaluru: Dutch pension fund manager APG Asset Management NV has invested $175 million (Rs1,150 crore) of fresh equity into Virtuous Retail South Asia Pte Ltd (VRSA), a joint venture with Xander Group Inc., for acquisitions and greenfield project developments. APG and the retail development arm of investment firm Xander Group had set up the venture in November 2016 to acquire a portfolio of shopping malls from a Xander-sponsored fund for about $300 million.

“This new equity commitment to VRSA reflects our continued support for the growth of the platform and our conviction in the retail sector in India," Patrick Kanters, managing director and global head of real assets for APG, said in a statement on Thursday.

Apart from the $300 million, the joint venture had also committed an additional $150 million as equity capital, part of which has already been deployed. In May 2017, VRSA acquired a 2 million sq. ft shopping centre in Chandigarh for $108 million (Rs700 crore), taking its retail portfolio to 5.5 million sq. ft.

“VRSA has expanded significantly across all parameters over the last year," said Sid Yog, founder of Xander Group and chairman of VRSA.

Yog said the focus will be on new greenfield projects and selective acquisitions which meet the firm’s location and quality parameters.

“We already have a war chest and this additional funding allows us to be more aggressive in expansion," Yog said.

Rohit George, executive managing director and chief investment officer of VRSA, said, “APG and Xander are like minded long-term investors who have demonstrated their commitment to the Indian retail sector. This additional equity gives VRSA the firepower and the runway to add significantly to our already dominant portfolio. We hope to announce some exciting new developments and acquisitions in the near future."

Large global investors have shown significant interest in India’s retail real estate in the last couple of years. Earlier this year, the Canada Pension Plan Investment Board (CPPIB) said it would invest $250 million in Island Star Mall Developers Pvt. Ltd, a unit of Phoenix Mills Ltd. Island Star owns the Phoenix MarketCity mall in Bengaluru. The funds will be used for acquiring and developing both greenfield assets on newly purchased land banks, as well as existing operating retail assets.

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