Blackstone-backed Nexus files for IPO

NEW DELHI: Nexus Select Trust, which is sponsored by global investment firm Blackstone, has filed the draft paper with the Securities and Exchange Board of India (Sebi) to launch India’s first public issue of retail real estate investment trust (REIT) to raise around $500 million (about ₹4,000 crore), said people aware of the development.

Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering about 10 million square feet of area valued at around $3 billion.

Nexus Select Trust has on Thursday filed the draft red herring prospectus (DRHP) with Sebi and aims to hit the capital market with India’s first retail REIT public issue in the first half of the 2023 calendar year, according to people in the know.

The size of the initial public offer (IPO) of Nexus Select Trust REIT will be around $500 million, they said. This will be the third REIT that will be sponsored by Blackstone. It had earlier launched India’s first REIT, Embassy Office Parks REIT. It then launched Mindspace Business Parks REIT.

A REIT, a popular instrument globally, was introduced in India a few years ago to attract investment in the real estate sector by monetising rent-yielding assets.

It helps unlock the massive value of real estate assets and enables the participation of retail investors.

Three REITs, including Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield India Real Estate Trust, are ;osted on Indian stock exchanges but all these are leased office assets. Nexus Select Trust will be the first REIT with rent-yielding retail real estate assets.

In its portfolio of 10 million square feet of retail real estate,

Nexus Select Trust has also included Select Citywalk mall in south Delhi. There are around 3,000 stores in its shopping malls while the number of brands is approximately 1,000.

The sources said Blackstone is very bullish on the growth story of India’s retail sector, which has bounced back sharply post the second wave of the pandemic.

“The fundamental of India’s retail business is very strong. People are spending money and watching movies,” a source said. Unlike the office segment, there are not many players in the shopping malls business and also the supply of Grade A malls is also limited, the sources said.

On the operational front, the occupancy level in the malls currently stands at 94% with an annual footfall of over 130 million, they said.

The sales in its malls during the April-June quarter have been 24% more than the prepandemic level.

Nexus Select Trust has done leasing of around 3.5 million square feet over the last three years and three months. Its senior management team of nine CXOs (with 20+ years average experience) led by Dalip Sehgal (former executive director of Unilever India) as CEO is supported by more than 500 employees.

REUTERS Nexus Select Trust has a portfolio of 17 operational shopping malls.