Virtuous Retail South Asia To Sell Its Malls To Nexus Malls And Lake Shore India Advisory

By: Asia Business Outlook Team | Friday, 07 April 2023

Virtuous Retail South Asia is in discussions with Nexus Malls and Lake Shore India Advisory to sell all of its malls for $400-500 million (about Rs. 3,500-4,000 crore).

The retail enterprise, a partnership between Singapore's Xander Group and Dutch institutional investor APG, operates a half-dozen malls in Chennai, Bengaluru, Chandigarh, Amritsar, Nagpur, and Surat.

According to three sources familiar with the sale, the portfolio would comprise two under-construction malls in Delhi and Mumbai, in addition to the six current malls.

Nexus Malls is the Indian retail portfolio arm of investment firm Blackstone Group, whereas Lake Shore India Advisory is owned by Abu Dhabi Investment Authority.

According to sources, the Blackstone Group is developing India's first retail real investment trust (REIT), which is expected to be launched by June this year and would include malls from Blackstone-Nexus and Select City.

"Indian retail has rebounded significantly and both retailers and mall owners are benefiting from strong demand fuelled by increased consumption. The upward curve is very sustainable. It's a very good time for retail stakeholders across the value chain," said Shobhit Agarwal, managing director, Anarock Capital.

"Whatever steam the sector lost during the Covid-19 pandemic has returned multifold and the momentum shows no signs of slowing down. There is a huge demand for well-managed retail spaces, especially in tier-I cities. Given the robust consumer sentiment, investors are interested in acquiring quality retail assets which provide steady incomes and capital appreciation," he said. Xander Group and Lake Shore India Advisory did not respond to ET's emailed queries while Blackstone and APG declined to comment.

The India portfolio of Virtuous Retail South Asia presently spans 13 million square feet.

In 2019, Anarock Capital helped Virtuous Retail South Asia close a $100 million deal with TRIL for two retail malls, one in Nagpur and one in Amritsar. Along with the larger cities, several private equity groups see tier-2 and tier-3 cities as actively driving retail in the future. Several private equity and institutional investors are also considering creating a REIT for their assets, particularly shopping malls and retail spaces.