Nexus Select eyes eight retail acquisitions as expansion gathers pace

Nexus Select Trust, India's only publicly listed retail real estate investment trust (Reit), is lining up its next phase of expansion, with plans to acquire eight retail assets across multiple cities as it pushes into eastern India and strengthens its footprint in existing markets.

The acquisition pipeline spans shopping centres in the capital cities of states including Bihar and Jharkhand, one asset in southern India, and additional land and built-up space at two locations where the Reit already operates in north India, according to people familiar with the plans. Two of the transactions are currently in the due diligence stage.

Among the deals, the Blackstone Group-backed Reit is in the process of acquiring a 500,000 sq. ft shopping centre in Guwahati as part of a brownfield development where construction is at an advanced stage. The project will also include a 164-key hotel.

The expansion comes as Nexus continues to report steady operating performance, giving it financial headroom to pursue acquisitions.

On Monday, the Reit reported an 11% year-on-year increase in net operating income (NOI) to ₹510 crore for the April-June quarter, driven by strong consumption and leasing momentum. It declared a distribution of ₹370 crore ( ₹2.44 per unit), up 10% from a year earlier, marking its 12th consecutive quarter of a 100% distribution payout to unitholders.

Since listing in 2023, the company has distributed more than ₹4,080 crore and delivered an internal rate of return (IRR) of 25%, underscoring its commitment to delivering consistent returns to unitholders, the company said.

“Backed by a strong balance sheet, low leverage, and nearly $1 billion of available debt headroom, we are well-positioned to capitalize on inorganic growth opportunities and continue scaling our platform,” Dalip Sehgal, executive director and chief executive at Nexus Select Trust, told Mint.

Nexus Reit currently owns 19 shopping centres across 15 cities, along with three hotel assets (450 keys) and three office assets.

Growth playbook

The acquisition pipeline aligns with the Reit's strategy of doubling its portfolio by 2030. It recently announced the acquisition of Diamond Plaza mall in Kolkata, with the transaction expected to close in the first half of FY27.

Beyond acquisitions, Nexus Select Trust has also partnered with real estate developer Runwal Enterprises to develop a shopping mall spanning more than 700,000 sq. ft in Dombivli, a suburban Mumbai neighbourhood.

The project marks the Reit's first partnership in an under-construction development since listing. The two partners will jointly develop Nexus Runwal Gardens Mall with a total investment value of more than ₹900 crore.

“Last year, footfall growth was not great, but there has been a recovery. Our NOI has grown, so has profitability and consumption. Occupancy remains high at 96%. We have got a strong playbook in terms of what we are doing. The strategy of acquiring and turning assets around, investing in them, increasing the categories and brands, bringing in more brands, has been validated,” Sehgal said.

Reits are investment vehicles that own and operate income-generating real estate assets, allowing investors to earn a share of rental income without directly owning the underlying properties.

Besides Nexus Select Trust, India's listed office Reits are Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Knowledge Realty Trust and Bagmane Prime Office REIT.