K Raheja Corp has acquired Sobo Central Mall located in Mumbai's Haji Ali area from Future Group promoter Kishore Biyani's Bansi Mall Management Company for INR 476 crore. Originally known as Crossroads Mall, Sobo Central Mall was one of the first malls in India opening in the late 1990s but lost prominence over the years. The mall was facing financial stress owing over INR 700 crore to lenders. Creditors had initiated insolvency proceedings and put the mall on sale to recover dues. After the sale, Kishore Biyani settled the debts of INR 571 crore owed by BMMCL through a one-time payment of INR 476 crore.
K Raheja Corp has acquired Sobo Central Mall in Mumbai's Haji Ali area from Future Group promoter Kishore Biyani's Bansi Mall Management Company (BMMCL) for INR 476 crore, according to property documents accessed by Propstack.com.
The Sobo Central mall sits on 5,357 square meters of land and has a built-up area of 9,873 square meters along with 1,579 square meters of common facilities. The transaction was registered on April 8, 2024 for a total consideration of INR 476 crore. Stamp duty of INR 28.56 crore and registration charges of INR 30,000 were paid.
Biyani is known for launching ventures like Pantaloon Retail and Big Bazaar. Crossroads Mall, which later came to be known as ‘Sobo Central Mall’, was one of the first malls in Mumbai and India as it opened in the late 1990s. Located in a congested area where parking was a nightmare, the mall quickly lost ground to newer, larger malls in the suburbs. Currently, SOBO Central houses only a McDonald's outlet, which has been there since 1999. The mall was forced to shut later due to the impact of COVID-19 and large spaces given to struggling Future Group firms which yielded no rental income.
The owners were facing financial stress as it owed over INR 700 crore to lenders, led by Canara Bank. The Corporate Insolvency Resolution Process (CIRP) against Future Retail was started by its creditors following loan defaults in 2022. The Kishore Biyani-led Future group firm had significant borrowings in the form of bonds and thus, several trusteeship companies have filed claims. Creditors led by Canara Bank had put the mall on the block to recover dues.
Biyani has reportedly settled dues of INR 571 crore owed by BMMCL to lenders by making a one-time payment of INR 476 crore, or 83% of the total amount. Last month, Biyani's offer of INR 476 crore to settle INR 571 crore debt was approved after creditors accepted a INR 475 crore bid for the asset by Runwal Group.
Coming to the present, K Raheja Corp. has the expertise and resources to turn the Sobo mall into a busy destination for dining, entertainment, and shopping as it successfully runs Infiniti Mall in Malad West and Andheri West. Thus, K Raheja Corp. is well-positioned to use its extensive experience in developing successful commercial assets to transform SOBO Central Mall into a modern and exciting shopping destination that satisfies the evolving needs of consumers.
The Indian retail sector has seen much consolidation activity in recent years. This deal is indicative of the opportunities for retail real estate players to acquire prominent locations and drive growth in the industry. For instance, Nexus started operations in 2015 with two malls and currently, the Nexus Select Trust portfolio consists of 17 malls with a total spread of nearly 10 million sq ft across 14 cities with 97.3% retail portfolio occupancy. Last year, Runwal Group obtained full ownership of R-City Mall after buying the remaining stake from GIC.
According to a report released by CBRE India, the year 2023 reported absorption of nearly 7.1 million square feet, a significant 47% year-over-year growth in Tier-1 cities. This growth was primarily driven by Bangalore, Delhi-NCR, and Mumbai, with the three major cities cumulatively accounting for nearly 61% of the leased space. As per the report, in 2024, among the retail categories, the home décor segment is likely to expand in online and offline formats, while fashion and apparel players will continue expanding in tier-I cities across malls and high streets.
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