Vanguard Group has acquired 1.14 crore units of Nexus Select Trust for INR 158 crore, representing a 0.75% stake, amid growing interest in India's REIT sector. This purchase, at INR 138.42 per unit, contrasts with Morgan Stanley's divestment of 78.41 lakh units for INR 108.47 crore. Nexus Select Trust, India's first retail-focused REIT, saw its units rise slightly to INR 138.01. This investment trend follows Blackstone's recent sale of 31.55 crore units for INR 4,354.90 crore and highlights increasing domestic and international confidence in India's retail real estate market.
The investment landscape in India is witnessing significant movement as Vanguard Group has recently acquired over 1.14 crore units in Nexus Select Trust for INR 158 crore through open market transactions. This investment comes at a time when the real estate investment trust (REIT) sector in India is gaining traction, particularly in the retail property segment.
The Vanguard Group, a prominent investment management firm based in the US, has bought 1,14,50,476 units, which represents approximately a 0.75 percent stake in Nexus Select Trust. The purchase was made at an average price of INR 138.42 per unit, totaling INR 158.49 crore. In contrast, Morgan Stanley has decided to sell a portion of its investment in the same REIT, divesting 78.41 lakh units at an average price of INR 138.33 each, valued at INR 108.47 crore.
Nexus Select Trust, recognised as India's first REIT focused on retail properties, has seen its units trade slightly higher, closing at INR 138.01, marking a 1.16 percent increase on the National Stock Exchange (NSE). This activity is part of a broader trend seen in the REIT market where various institutional investors are adjusting their portfolios in response to changing market conditions.
Notably, this recent transaction follows major shifts in investments within the real estate sector. Last week, Blackstone, another global investment giant, sold a staggering 31.55 crore units of Nexus Select Trust for about INR 4,354.90 crore as part of a strategy to diversify its real estate holdings. This move highlights the increasing interest in real estate as a viable investment option in India, particularly given the steady recovery of the retail market post-pandemic.
In addition to Vanguard's acquisition, domestic mutual funds, including ICICI Prudential and HDFC Mutual Fund, have also shown an interest in Nexus Select Trust by purchasing units. Internationally, other significant players such as Wells Fargo and Carmignac have entered the market, reflecting a growing confidence in India's real estate sector. The presence of both domestic and foreign investors signals a robust interest in REITs as a mechanism for capitalizing on the expanding retail real estate market.
Nexus Select Trust's portfolio is robust, comprising 17 shopping malls that cover a gross leasable area of 9.9 million square feet across 14 cities. It also includes two complementary hotel properties with 354 keys and three office assets with an additional 1.3 million square feet of gross leasable area. This diversification within the portfolio strengthens its appeal to investors, particularly as retail properties begin to recover and thrive in the post-pandemic environment.
As the retail sector continues to evolve, the actions of firms like Vanguard and Morgan Stanley illustrate the dynamic nature of investments in India. With increased foreign investment and increased activity in REITs, the sector is set to play a vital role in shaping the future of real estate in the country. This trend points toward a more integrated approach to investing, where asset management firms recognize the potential of diverse property types within the Indian market, paving the way for continued growth and development in the sector.
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