GIC will invest in the PML subsidiaries through a mix of primary infusion and secondary purchase of equity shares
PML’s subsidiaries include Offbeat Developers Pvt Ltd, Graceworks Realty and Leisure Pvt Ltd and Vamona Developers Pvt Ltd
Leading mall developer Phoenix Mills Ltd (PML) and its subsidiaries have signed a term-sheet with an affiliate of Singapore’s sovereign wealth fund GIC for formation and development of to set up a retail-led mixed-use platform. The transaction comes at a time when shopping malls are somewhat returning to normalcy though footfalls and customer sentiment remain low amid an ongoing pandemic.
GIC will invest in the PML subsidiaries through a mix of primary infusion and secondary purchase of equity shares. It will initially acquire an equity stake of 26% and may further increase its stake up to 35% within a year from closing the transaction subject to certain terms and conditions.
PML’s subsidiaries include Offbeat Developers Pvt Ltd, Graceworks Realty and Leisure Pvt Ltd and Vamona Developers Pvt Ltd.
As part of the platform, PML will contribute its assets Phoenix Marketcity, Mumbai and Phoenix Marketcity, Pune and commercial assets Art Guild House, Phoenix Paragon Plaza and Centrium, Mumbai. The assets constitute gross leasable retail area of 2:33 million sq ft and office space of around 1.03 million sq ft.
PML's assets are valued at an enterprise value of ₹5600-5700 crore.
“The proceeds from the proposed transaction are intended to be utilized as growth capital for further expansion and acquisition of greenfield, brownfield, operational and distressed mall opportunities," PML said in a stock exchange filing.
Going forward, the partners may monetize this platform including by way of a real estate investment trust (Reit) over a three to five-year period after the deal closes.
As shopping malls begin to recover, market leaders such as PML are expected to be at a significant advantage than peers.
In August, PML raised ₹1,100 crore from institutional investors through a qualified institutional offering (QIP). Foreign and domestic institutional investors took part in the share sale, including a large cheque from GIC, Mint had reported.
GIC was one of the largest investors in the recent ₹4,500 crore initial public offering (IPO) of Mindspace Business Parks REIT, which has a portfolio of almost 29 million sq. ft of office space across metros. GIC, along with the government of Singapore, invested ₹688.9 crore in the IPO.
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