Re­tail re­al­ity boom is be­com­ing a re­al­ity in In­dia

Shopping Center News - - CONTENTS - By Shop­ping Cen­tre News Bureau

In­sti­tu­tional in­vest­ments in re­tail real-es­tate sec­tor touched a new high in 2017

The world of re­tail realty is chang­ing fast. Key cities and re­tail de­vel­op­ments are on the radar of in­ter­na­tional de­vel­op­ers and in­sti­tu­tional in­vest­ments in re­tail real-es­tate sec­tor touched a new high in 2017. Realty giants are ac­quir­ing stakes in malls and some are be­ing com­pletely bought over. In short, the re­tail realty boom has be­come a re­al­ity in In­dia… PHOENIX MILLS BUYS BACK STAKE IN FOUR MALLS FOR $210 MIL­LION

Re­tail de­vel­oper Phoenix Mills Ltd is buy­ing back stake from var­i­ous in­vestors in four of its mall projects for ap­prox­i­mately `1,350 crore, mak­ing it the sole owner of the as­sets. “Once the firm pays the last tranche of `34 crore to one of the in­vestors, IL&FS In­vest­ment Man­agers Ltd, for the re­main­ing 6 per­cent stake in a sub­ur­ban Kurla mall in Mum­bai by Septem­ber 30, the process of giv­ing ex­its to all its in­vestors will be com­plete,” Shishir Sri­vas­tava, Joint Man­ag­ing Di­rec­tor, Phoenix Mills, told Deal Street Asia. Phoenix Mills, which had 24-70 per­cent own­er­ship in these as­sets and raised cap­i­tal from a bunch of in­vestors be­tween 2006 and 2007, has been pro­gres­sively buy­ing back stakes in many of its spe­cial pur­pose ve­hi­cles (SPVs) hold­ing var­i­ous as­sets. The process is now com­plete. Af­ter these buy­outs, the firm will still have part­ners in its Chen­nai and Ben­galuru malls.

In April, Phoenix Mills and Canada Pen­sion Plan In­vest­ment Board (CPPIB) an­nounced the Cana­dian in­vestor will in­vest $250 mil­lion in mul­ti­ple tranches, to even­tu­ally own up to 49 per­cent in Is­land Star Mall De­vel­op­ers, a unit of the de­vel­oper. Is­land Star Mall De­vel­op­ers cur­rently owns Phoenix Mar­ketCity in Ben­galuru, a mall with gross leasable area of 1 mil­lion sq. ft. Since the CPPIB tie-up, Is­land Star bought a land par­cel in Pune from KoltePatil De­vel­op­ers Ltd for `160 crore. Phoenix Mills is also in the last leg of buy­ing a part­ly­con­structed mall in In­dore for `230 crore, which may be brought un­der CPPIB-Phoenix in­vest­ment plat­form later.

“We are com­mit­ted to de­ploy­ing the cap­i­tal be­fore the year-end and have four new as­sets un­der CPPIB plat­form, each ex­ceed­ing 1 mil­lion sq. ft. Our growth strat­egy re­volves around the ur­ban con­sump­tion story,” said Sri­vas­tava. Phoenix owns and op­er­ates around 6 mil­lion sq. ft of shop­ping malls in Mum­bai, Pune, Ben­galuru, Lucknow, Chen­nai and Bareilly. Along with CPPIB, it plans to dou­ble this in five to six years.

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