Virtuous Retail in speaks to sell malls for around $500 million

By siliconindia  |  Friday, 07 April 2023, 08:54:53 AM IST

Virtuous Retail in speaks to sell malls for around $500 million

Virtuous Retail South Asia is in speaks with Nexus Malls and Lake Shore India Advisory about selling all its malls for $400-500 million (about Rs 3,500-4,000 crore). The retail firm, a joint venture among the Dutch institutional investor APG and Singapore's private equity firm Xander Group, operates six malls in Chennai, Bengaluru, Chandigarh, Amritsar, Nagpur, and Surat.

In addition to the six operational malls, the portfolio will include two under-construction malls in Delhi and Mumbai as well, said three people aware of the deal. Nexus Malls is the Indian retail portfolio arm of investment firm Blackstone Group while Abu Dhabi Investment Authority owns Lake Shore India Advisory. Blackstone group is preparing for India's first retail real investment trust (REIT) which is likely to be listed by June this year, with valuation of about $3 billion, including malls of Blackstone-Nexus and Select City, according to people in the know.

"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.

Virtuous Retail South Asia's India portfolio currently includes developments across 13 million square feet. In 2019, Anarock Capital had facilitated a deal where Virtuous Retail South Asia concluded a $100-million deal with TRIL for two retail malls, one each in Nagpur and Amritsar. Along with the bigger cities, tier-2 and tier-3 cities are also on the radar of many PE funds which see these cities actively driving retail in the future. Several PE and institutional investors are also exploring the option of coming out with REIT for their properties, especially shopping malls and retail spaces.

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