Virtuous Retail South Asia Pte Ltd, the retail arm of alternative investment firm The Xander Group, is in advanced stages of discussion to buy an upcoming retail project in Mumbai from Omkar Realtors & Developers Pvt. Ltd.
Virtuous Retail is likely to pay roughly Rs 2,000-2,300 crore ($280-325 million) for the property, a Xander spokesperson said but declined to share further details.
The 1-million-sq-ft project is part of the Mumbai developer's Omkar International District project at Andheri East.
Virtuous Retail and Omkar will sign a forward-purchase agreement for the project. A forward purchase allows investors to buy an asset which is under construction or yet to begin construction at a set price. The deal structure, which is common in the commercial real estate market, is picking up pace in the retail segment as well.
Recently, private equity giant Blackstone Group LP struck a similar transaction with Kolkata developer Forum Projects for a retail project in the city. It struck a deal to buy a majority stake in the project, which has just begun construction.
The impending deal between Virtuous and Omkar was first reported by the Mint newspaper earlier today.
The retail real estate market in India is seeing renewed momentum after going through a downturn for three to four years. Big investment firms such as Blackstone as well as Canada Pension Plan Investment Board have increased their exposure to the asset class in the past few years.
Blackstone has a separate arm for mall, called Nexus Malls. It is now exploring deals in even smaller Indian cities. It recently struck a deal to buy Forum Projects' Bhubaneshwar mall for roughly Rs 300 crore.
Virtuous Retail has emerged as a key player in India's retail real estate market in recent years. It added muscle to its platform when it struck a deal worth $450 million with Dutch pension fund APG in 2016. It has actively scouted for and invested in retail projects since then. Last year, it bought North Country Mall in Chandigarh for Rs 700 crore. It also operates malls in Surat and Bengaluru.
