Blackstone-backed Nexus Select Trust eyes multiple mall acquisitions

Bengaluru: Blackstone-backed Nexus Select Trust, India’s first publicly-listed retail real estate investment trust (Reit), said on Tuesday that it has a robust acquisition pipeline of ten shopping malls and centres, including one greenfield development, as part of its growth strategy.

Three of these assets are currently under due diligence, and the transactions are expected to be closed in the next 5-6 months. The potential acquisitions are spread across the metros and beyond.

Nexus Reit has clocked a 14% year-on-year rise in retail net operating income (NOI) to ₹420 crore in the July-September quarter. The company announced its earnings on Tuesday evening.

It achieved tenant sales of ₹3,500 crore, up 16%, during the period, driven by growth across categories such as fashion, jewellery, beauty and personal care, electronics, and entertainment. Tenant sales refer to the sales generated by the tenants or stores in a property.

Nexus, which went public in 2023, has a portfolio comprising 19 Grade-A shopping malls and shopping centres spanning 10.6 million sq ft spread across 15 cities, three hotel assets, and three office properties. Grade-A malls are of higher quality, with a good tenant profile and features, situated in good locations.

The company plans to scale up its portfolio to at least 30 malls by 2029-30.

“Along with inorganic growth, we are also seeing good momentum in footfalls in our properties, which we expect to continue. Even key categories such as fashion, which saw some challenge sometime ago, has turned around. The premiumisation across the malls, including high-value product categories and brands, has contributed to the growth,” Dalip Sehgal, executive director and chief executive, Nexus Select Trust, said in an interview.

In the September-ended quarter, Nexus declared a distribution of ₹333 crore or ₹2.19 per unit, its ninth consecutive quarter of full distribution payout since listing.

Typically, Blackstone acquires the assets, which are then added to the Nexus portfolio. In February, Nexus announced the acquisition of the MBD Neopolis mall and its attached Radisson Blu Hotel in Ludhiana for ₹490 crore. It also closed the acquisition of Vega City mall in Bengaluru for ₹913 crore. In 2024, it announced plans to acquire three Grade-A malls in Hyderabad from Larsen and Toubro for ₹1,000 crore.

In July, the Blackstone Group acquired South City Mall in Kolkata for ₹3,250 crore from South City Projects, in the largest retail asset buyout in recent years.

Reits are investment vehicles that own or operate income-generating real estate, enabling investors to earn a share of the income produced without directly purchasing the properties.

Besides Nexus Select Trust, the other four publicly-listed Reits in the country are Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, and Knowledge Realty Trust.

Nexus Select Trust also said that Asheesh Mohta, who was a director, has been appointed as the new chairman, replacing Tuhin Parikh, who has decided to step down. Mohta currently also heads Blackstone's India real estate business.