Nexus Select Trust to buy 3 malls in Hyderabad from L&T for $300-350 million

Nexus Select Trust, the retail-focused real estate investment trust sponsored by global private equity giant Blackstone, has signed a preliminary agreement to acquire three malls from Larsen & Toubro in Hyderabad for around $300-350 million, sources said.

The malls under the brand name ‘Hyderabad Next Galleria Malls’ are located at strategic metro stations and have been developed by Larsen & Toubro as part of the ecosystem to transform the shopping and entertainment experience in the city.

There are four malls under L&T along the metro line with a total leasable area of 1.2 million square feet. Nexus has signed a deal for three of the malls with a total area of 1 msf and with a leased occupancy of 84 per cent.

The three malls that are likely part of the deal are e-Galleria located next to Hitec City metro station and with an area of 2 lakh square feet, Next Galleria Mall at Punjagutta Metro and an area of 5 lakh square feet and Premia next to Irrum Manzil station.

Nexus Select Trust and Larsen & Toubro did not respond to requests for comment on the deal.

The acquisition of these malls will take Nexus Select Trust’s portfolio to around 11 msf of retail portfolio. It has only signed a non-binding term sheet and the final transaction will depend on the pricing and valuations.

All the malls have a good tenant base with Reliance Trends as an anchor tenant and PVR-INOX, the multiplex operator tenant.

This is not the first deal that Blackstone has done with L&T. In 2017, it had acquired Seawoods Mall in Navi Mumbai from the engineering and construction major for over ₹1,300 crore. At around 1 msf, it is one of the largest retail properties in the REIT’s portfolio after Nexus Elante in Chandigarh.

The gross asset value of Nexus Select’s retail portfolio was ₹21,924 core at the end of September 2023 with an occupancy of 97 per cent. It also has three office assets in its portfolio and two hotels.

In the first half of FY24, the REIT reported a net operating income of around ₹600 crore on revenue of ₹815.6 crore, of which the retail portfolio’s contribution was ₹726 crore.

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