Blackstone Backed Nexus Select Expands Mall Portfolio with New Purchases

Nexus Select Trust, supported by investment giant Blackstone, is aiming to expand its portfolio by buying more malls across India. This strategic move aims to not only increase the trust's geographic footprint but also to enhance its market presence significantly in terms of total leasable area. The trust plans to add approximately 1 to 1.5 million square feet to its portfolio annually. 

The trust recently bought three malls in Hyderabad, encompassing a total area of 1 million square feet. This addition underscores a strategic consolidation in regions where Nexus already holds assets, thus strengthening its market dominance. The buying strategy of the trust is part of a broader strategy that also considers expanding into new markets, particularly those where Nexus does not yet have a presence.

Currently, Nexus Select Trust manages a diverse portfolio of 17 malls, spread across approximately 10 million square feet and 14 cities. This portfolio not only includes metropolitan centers but also non-metro areas like Bhubaneswar and Mangalore, where the malls have shown impressive performance. The trust's approach of buying malls and enhancing their value through strategic tenant mix and management practices has proven effective. This model supports sustainable growth and financial stability, as evidenced by the trust's net operating income of ₹1,760 crore and a 13% increase in tenant sales, totaling ₹12,000 crore in FY24. 

For FY25, Nexus Select is optimistic, projecting a 9% growth in net operating income and planning for a 9-10% increase in payouts to its investors. This confidence is buoyed by both domestic and international retailers seeking larger and more numerous outlets within Nexus's malls, reflecting a healthy demand in the retail space. High-profile tenants like Zara and H&M are expanding their presence with new formats such as Zara Home and H&M Home, indicating a robust and growing retail ecosystem within Nexus properties. 

This strategic buying aligns with broader trends in the real estate investment sector, where trusts like Nexus Select are increasingly focusing on high-quality retail spaces to generate stable and growing returns for their stakeholders. The trust's ability to adapt its portfolio in response to changing market conditions and consumer preferences stands as a testament to its resilient and forward-thinking management strategy.