Nexus Select Trust Acquires 17 Malls Since 2016; To Continue Inorganic Growth Post IPO

Blackstone-sponsored Nexus Select Trust, which will soon launch Rs 3,200 crore retail REIT public issue, has acquired 17 shopping malls in the last seven years and will further expand portfolio through inorganic route as it remain bullish about retail consumption.

Nexus Select Trust will hit the capital market on May 9 to raise up to Rs 3,200 crore through its retail REIT Initial Public Offering (IPO) and this includes fresh issue of units worth up to Rs 1,400 crore and an Offer For Sale (OFS) of up to Rs 1,800 crore.

The company has fixed the price band at Rs 95 per unit to Rs 100 per unit for the proposed issue scheduled to close on May 11.

This will be India's first REIT (Real Estate Investment Trust) IPO backed by rent yielding retail real estate assets. At present, there are three listed REITs on stock exchanges but all backed by office assets.

Nexus Select Trust has a portfolio of 17 operational shopping malls, including Delhi's premium Select City Walk, across 14 major cities covering a 9.8 million square feet area. It operates 2 hotels with 354 keys and also office spaces as part of mixed use development.

"Since establishing the platform in 2016, we have acquired 17 high quality retail assets. We have acquired 1.4 million square feet retail space every year. We acquired seven assets from Prestige group in midst of COVID pandemic," Nexus Select Trust Chief Leasing Officer Nirzar Jain told reporters here.

The company has a proven track record of repositioning and turning around underperforming assets, like Nexus Amritsar, through strategic capital expenditure and leasing initiatives, he added.

Jain said the company's total net operating income (NOI) is projected to grow organically by 17 per cent to Rs 1,897.1 crore in 2025-26 from Rs 1,619.8 crore in 2023-24. In the first nine-month of the last fiscal, the NOI stood at about Rs 1,050 crore.

The company said it is well-positioned to scale inorganically driven by strong balance sheet.

In November last year, Nexus Select Trust filed the draft red herring prospectus (DRHP) with Sebi to launch its retail REIT public issue.

Earlier, the company had planned to raise up to Rs 4,000 crore from its proposed REIT public issue.

Asked about reduction in the IPO size, Jain said the units are being issued at a discount in the public issue as against the net asset value (NAV) of Rs 127 per unit.

Post-IPO, the shareholding of Blackstone in Nexus Select Trust will come down to 43 per cent from 60 per cent. Select City Walk promoters stake will reduce slightly to 24.3 per cent from 25 per cent.

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.

At present, there are three listed REITs -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust -- on Indian stock exchanges, but all of these are leased office assets.

This will be the third REIT sponsored by Blackstone. It launched India's first REIT Embassy Office Parks and then Mindspace Business Parks REIT.

There are around 3,000 stores across 17 shopping malls while the number of brands is nearly 1,100. The average rental of its retail portfolio is Rs 123 per square feet per month, with maximum rent at nearly Rs 500 per square feet at Select City Walk in Saket, South Delhi.