Blackstone-backed Nexus Select Trust, the only listed retail-focused real estate investment trust (REIT) in India, has completed the acquisition of a shopping mall in Bengaluru for about Rs 913 crore (about $105 million).
The REIT pumped in about Rs 870 crore to purchase Vega City Mall and will spend the remaining amount on capital expenditure including renewable energy and closing costs. This is Nexus Select Trust’s fourth acquisition in Bengaluru, helping it consolidate its presence in the market.
The REIT bought the asset from Blue Horizon Hotels Pvt Ltd. It first announced the deal October last year, pegging the sale value at Rs 877 crore.
“Given Nexus’s existing strong presence in Bengaluru, we believe this acquisition will result in synergies in leasing, operations and marketing. With a strong balance sheet post-acquisition, we continue to be well-positioned to deliver further inorganic growth opportunities,” said Dalip Sehgal, executive director and chief executive at Nexus Select Trust.
The shopping mall is located in south Bengaluru and is 96% leased to international and domestic brands. The acquisition, executed at a 10% discount to the asset’s independent valuation, is completely funded through the issue of non-convertible debentures at a coupon rate of 7.7%.
Other assets owned by the REIT in Bengaluru include Nexus Shantiniketan, Nexus Whitefield, and Nexus Koramangla. The REIT has presence in 14 cities including Delhi, Mumbai, Hyderabad, Chennai, and Chandigarh, with the total retail portfolio size of about 9.9 million square feet.
Even though the retail segment makes up for 90% of its portfolio, Nexus Select Trust also has exposure to other segments. It owns three commercial offices, two hospitality assets, and solar and hybrid power plants.
Nexus Select Trust listed on the exchanges in 2023. Blackstone sold a near 20% stake in Nexus Select in August last year. The deal was valued at Rs 4,240 crore or about $505 million then, according to data from VCCEdge. This added to liquidity worth Rs 1,800 crore ($220 million then) during the REIT’s public offering in 2023, taking Blackstone's total harvest from the operator of shopping malls to Rs 6,155 crore at the time.
The global investment firm still holds close to 23% stake in the company, currently worth Rs 4,658 crore.
