Blackstone-backed Nexus Select Trust, the only mall focused REIT in India, is planning to add the R City Mall owned by Runwal Developers in Mumbai to its REIT portfolio. Runwal recently made a Rs 1000 crore buyout of Singapore's GIC stake and acquired full ownership of the mall. Nexus Seawoods in Navi Mumbai stands as Nexus Trust's only Mumbai asset and is thus seeking investment in premium malls like R City and enhancing their amenities, aligning with its strategy of strengthening Grade-A mall acquisitions across MMR. Anarock Retail's 2023 report ranks MMR Grade-A mall rentals, averaging Rs 358 – 396 per sq ft, as the highest among major cities.
Blackstone-sponsored Nexus Select Trust is trying to add R City Mall in Mumbai to its REIT portfolio as per sources. Talks have been ongoing for some time between the REIT and mall owner Runwal Developers, and sources indicated that it was not certain whether a transaction would emerge from the discussions.
In May, Runwal Developers acquired Singapore’s sovereign wealth fund GIC’s 50% stake in the mall for Rs 1000 crore, roughly valuing it at around Rs 2000 crore. Runwal’s intention in acquiring full ownership of the mall was to grow his company’s annuity business and have a dominant share in the city’s retail landscape.
At the time of the acquisition, Runwal had said that it would be investing more in upgrading the mall to attract more footfalls. The company owns three malls in the city – R City in Ghatkopar, R Mall in Mulund and R Mall in Thane.
R City, which has been operational for around 13 years, is spread over 1.2 million square feet of retail space and has grown over the years. One of the largest malls in the city, it is the only mall that has an Ikea store within its premises. R City is strategically located in the busy eastern suburb of Ghatkopar, which has a vibrant gentry, assuring it of ready footfalls. A metro line already connects it to the Western Suburbs, while another under-construction metro line passes right over the mall and will provide connectivity to more areas once operational.
Nexus Select Trust, India’s only mall-focused REIT owns 17 malls across 13 cities and has only one in the Mumbai Metropolitan Region - Nexus Seawoods in Navi Mumbai, which it acquired from Larsen & Toubro. Nexus Select Trust’s total portfolio covers an area of 9.8 million square feet, valued around Rs 23,000 crore. Nexus Select Trust strategy is to acquire Grade-A shopping malls rather than venturing into green-field projects. It also makes investment, if needed, to upgrade the facilities in malls. It has been scouting for more malls in Mumbai, which is seeing a rapid upgrade in infrastructure and connectivity.
MMR has been one of the major retail hubs in the country with many brands, big and small, eyeing to capture a piece of this vital market. The top organized retail destinations in Mumbai include Andheri, Bandra, Worli and Borivali, among others. In Navi Mumbai, the prominent areas are Ghansoli and Jui Nagar. Trading Density, an important metric to gauge the performance of the mall, has increased over the last year, primarily due to high footfalls and conversions across categories. As per Anarock Retail report 2023, MMR has the third largest trading density behind Delhi and Bengaluru. The average carpet rentals for Grade-A malls in MMR are Rs 358 – 396 per sq ft, the highest among major cities.
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