Nexus Select Trust, India’s first retail-focused REIT (real estate investment trust) with a portfolio of consumption-related assets, has entered northeast India with an agreement to acquire a 100% stake in the under-construction Galaxy Complex in Guwahati for ₹1,600 crore. The asset comprises a 0.5 million square feet (msf) retail mall and a 164-key Hyatt Regency Hotel.
Construction is expected to be completed in Q4FY28, with rentals likely from FY29. Nexus will take ownership and make the payment only upon completion and receipt of approvals, shielding it from development risk. The mall is already 30% pre-leased to major brands.
The acquisition implies a capitalization rate, a measure of the earning potential of a realty asset, of 8.25–8.5% for the mall and an 11.5-12.5x Ebitda multiple for the hotel.
Nexus aims to benefit from consumption tailwinds amid rapid urbanization across India. The management expects no additional Grade-A retail supply in Guwahati over the next five years. Overall, the transaction is seen as net operating income (NOI) and distribution per unit (DPU) accretive upon completion. NOI is a profitability metric, while DPU is the cash payout per unit by REITs to their investors.
Guwahati has limited Grade-A retail supply and remains a preferred destination for brands expanding their presence in the east, said Emkay Global Financial Services. “The acquisition highlights Nexus’ focus on capitalizing on the east region’s high consumption potential, where the unorganized market remains the dominant retail channel,” added the Emkay report.
Expansion mode
In February, Nexus acquired a stake in Runwal Gardens Mall in the Mumbai Metropolitan Region, which is also an under-construction asset. In April, it announced the acquisition of Diamond Plaza in Kolkata.
The thrust on expansion aligns with its broader ambition to increase leasable area to 18-20 msf by FY30 from its current operational retail portfolio of 10.96 msf, including Diamond Plaza.
According to JM Financial Institutional Securities, strategically, the Guwahati asset acquisition serves as a beachhead for the REIT’s broader East India expansion, with a targeted around 3.6 msf pipeline across Bihar, West Bengal and Assam. The management estimates this pipeline could generate over ₹600 crore of NOI.
“In our view, Nexus continued focus on acquisitions should drive superior DPU growth (relative to peers) and sustain its net asset value premium,” said JM.
Growth ahead
For FY27, Nexus targets NOI of ₹2,050–2,070 crore. In the June quarter (Q1FY27), total NOI rose 11% to ₹510 crore, with retail portfolio NOI at ₹460 crore. Consumption at its malls grew 17% year-on-year, driven by categories such as fashion, jewellery, electronics and entertainment.
Retail portfolio had a leased occupancy of 96%. Nexus distributed ₹2.4/unit in Q1FY27 and has guided for ₹9.8-10 DPU, up 9% year-on-year, for FY27, compared with ₹9.1/unit distributed in FY26.
The management said in the Q1 earnings call that it is not witnessing any slowdown in consumption or leasing due to the West Asia war, and that consumption grew by early double digits in July.
Nexus is different from other Indian listed REITs, which focus mainly on commercial office space. While Nexus is an exciting play on the structural urban consumption story in India, higher dependence on its top five-seven malls for rents and a slowdown in consumption are potential downside risks, said Nuvama Research.