Blackstone-sponsored Nexus Select Trust is in talks with the Kolkata-based Ambuja Neotia group to add two malls in the city to its portfolio for a consideration of ₹1,800 - ₹2,000 crore, sources said.
The Ambuja Neotia real estate group owns two malls in Kolkata, namely, City Centre in Salt Lake and City Centre, New Town, with a total area of around 9 lakh square feet.
Sources said that talks are in the nascent stages and discussions are still on as to how an eventual transaction would be structured. It may not be a total buyout but the Neotias may still have a stake.
A spokesperson for the Ambuja Neotia group, however, dismissed the news as incorrect. Nexus Select did not respond to a request for comment.
Mall-buying spree
Nexus Select is already in the concluding phase of acquiring three malls in Hyderabad from L&T Metrofor ₹1,000 crore, and is awaiting regulatory approvals. While announcing the first quarter results, the REIT had said that it had signed term sheets for two more malls spread across 8 lakh square feet, and is in talks for another five retail assets.
It has a stated intent of doubling its retail portfolio’s net operating income over the next five years by acquiring 1.5 msf or 2 to 3 malls every year. Its low loan-to-value (LTV) ratio of 14 per cent provides it an adequate headroom of ₹8,395 crore ($1 billion) to be deployed for acquisitions. Majority of the funding for inorganic growth will be through debt and LTV is expected to be in the range of 28 - 30 per cent at the end of five years.
Kolkata Malls
The malls owned by the Ambuja Neotia group are mature assets and around two decades old, with a good tenant mix. Both are mixed-use developments.
The one in Salt Lake also has an office tower in addition to the shopping areas, fountain plaza, entertainment centre and food court. The mall in New Town has a banquet hall and a hotel.
Shoppers Stop is the anchor tenant at the Salt Lake mall, Pantaloons at New Town, while PVR-Inox is the multiplex tenant operator at both malls.