Nexus Select Trust, supported by Blackstone, is exploring a major expansion in Kolkata, aiming to acquire Ambuja Neotia's City Centre Salt Lake and City Centre New Town malls. Valued between INR 1,800 crore and INR 2,000 crore, the malls span 9 lakh square feet and are integral to Kolkata's retail scene. The deal is in early stages, with Nexus also nearing a INR 1,000 crore acquisition of three Hyderabad malls and planning further growth. With a low loan-to-value ratio, Nexus seeks to significantly enhance its retail portfolio, potentially reshaping Kolkata's shopping landscape.
Nexus Select Trust, backed by Blackstone, is considering a significant expansion in Kolkata as it looks to acquire two prominent malls owned by the Ambuja Neotia Group. The transaction, estimated to be valued between INR 1,800 crore and INR 2,000 crore, would enhance Nexus's retail portfolio in a city known for its vibrant shopping culture.
The two malls in question, City Centre Salt Lake and City Centre New Town, boast a combined area of around 9 lakh square feet. These locations are established assets, having been a part of Kolkata's retail landscape for nearly two decades, and feature a mix of retail, entertainment, and dining options. The Salt Lake mall includes an office tower, a fountain plaza, and a food court, while the New Town mall incorporates a banquet hall and a hotel, making them popular destinations for both shopping and leisure.
Currently, discussions between Nexus and Ambuja Neotia are in the early stages, with details about the potential deal still being negotiated. It is unclear whether this would involve a complete buyout or a partnership where the Neotia Group retains some ownership. A spokesperson from Ambuja Neotia has denied the reports regarding the sale, emphasizing that no official agreement has been reached. Nexus Select Trust has not provided comments on the negotiations.
Nexus Select Trust is actively pursuing growth opportunities beyond just the Kolkata malls. The company is nearing the conclusion of a deal to acquire three malls in Hyderabad from L&T Metro, valued at INR 1,000 crore, and is awaiting the necessary regulatory approvals. Recently, during their first-quarter results announcement, Nexus revealed plans to sign agreements for two more malls totaling around 8 lakh square feet and ongoing discussions for five additional retail assets.
The company aims to double its retail portfolio's net operating income over the next five years, targeting 1.5 million square feet of space through the acquisition of two to three malls annually. With a low loan-to-value (LTV) ratio of 14%, Nexus has significant capacity to raise funds for these acquisitions, projected at INR 8,395 crore (approximately $1 billion). The company plans to finance a substantial portion of its growth through debt, and the LTV ratio is expected to rise to between 28% and 30% in five years.
Kolkata's retail scene has evolved significantly over the years, with malls playing a central role in urban shopping experiences. Established malls like those owned by Ambuja Neotia have not only become shopping hubs but also recreational centers for families and tourists. The increasing interest from major players like Nexus Select highlights the growth potential in this sector.
In addition to their retail offerings, these malls feature diverse entertainment options that draw in crowds. For instance, leading retail brands like Shoppers Stop and Pantaloons serve as anchor tenants, while PVR-Inox operates multiplex cinemas in both locations, ensuring that they remain competitive in attracting visitors.
As Nexus Select Trust navigates the complexities of the Kolkata retail market, the possibility of acquiring the Ambuja Neotia malls signifies a strategic step towards consolidating its presence in one of India's major metropolitan areas. With a robust expansion strategy and a focus on increasing its retail portfolio, Nexus is poised to reshape the landscape of shopping and entertainment in Kolkata in the years to come. The outcome of these discussions could set a precedent for future retail investments, impacting not only the local economy but also the broader landscape of real estate in India's evolving marketplace.
Inputs taken from an article published in the Hindustan Times
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