Blackstone is building on the expected surge in mall revenues in India

by time news
Blackstone Foundationa leading investor in commercial real estate in India, has submitted documents to the local regulator in preparation for a planned issuance of the first mall fund in India in the first quarter of 2023 — this is what the website Moneycontrol reported last month.

If the plan comes to fruition, it will be Blackstone’s third real estate investment trust (REIT) in the subcontinent, after issuing Emabassy Office Parks and Mindspace Business Parks. Blackstone aims to raise $500 million in the offering, while according to a source familiar with the matter, it aims for a value of 3.2-3 billion dollars for the fund, which will be called Nexus Select Trust. The fund will include assets of the premium shopping mall company Select City Walk, ranked at the top of shopping centers in India in terms of revenue per square meter, and the real estate company Prestige Group based in Bengaluru. The total extent of its assets will be about 920 thousand square meters.

The investment banks and financial entities that are expected to be partners in the issuance process include, among others, Citi, HSBC, JP Morgan and SBI Capital.

According to industry sources, there has been a strong recovery in shopping centers in India after the Corona epidemic in terms of sales volume, visitor traffic and occupancy. Nexus Malls, the largest in its field in India, has premium retail spaces throughout the country, and it owns 17 shopping centers in 13 cities. At the height of the epidemic, it closed a deal worth 1.2 billion dollars to purchase about seven shopping malls from Prestige Group.

In an interview with the Indian “Fortune” in September, Dalip Sehgal, the CEO of Nexus, said that sales in the company’s centers jumped by 125% in the second quarter of 2022 compared to the period before the pandemic. According to data from the Knight Frank consulting company, sales in shopping malls in India are expected by 2028 to register an annual growth of 29%, to 39 billion dollars. In 2023, Knight Frank predicts that retail sales will overtake those that preceded the epidemic and reach 11 billion dollars.

Blackstone began purchasing commercial real estate in India in 2011 and is now the country’s largest office space owner. Blackstone leases half of this space to customers in the technology sector, from Cisco to Sony. Since 2016, 47% of Blackstone’s planned purchases for Asia have been made in India – according to Dialogic data.

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