Consortium Behind South City Mall Rejects Speculation on Blackstone Deal

A major shareholder of South City Projects, the consortium that owns South City Mall in Kolkata, has dismissed reports of a potential $400 million deal with Blackstone as speculative. The shareholder clarified that while the company has received multiple offers from various funds, it is not under any urgency to finalize a sale.

South City Projects consists of prominent real estate developers, including Merlin Group, Sureka Group, Emami Group, Park Chambers Group, and Shrachi Group. The company has been receiving investment proposals since 2020 from funds such as Blackstone, Brookfield, the Canadian Pension Fund, and Singapore’s Temasek. These proposals are being evaluated as part of the company’s normal business operations, but no decision has been made regarding a sale.

According to Hindustan Times, the shareholder also emphasized that South City Projects is not facing financial distress or unmanageable debt that would necessitate an immediate transaction. Any decision regarding external investment will be based on valuations and the long-term goals of the company. The consortium comprises 75-80 shareholders from various real estate firms, and any significant decision will require consensus among all stakeholders.

The company is also exploring other avenues for expansion, including the possibility of launching a Real Estate Investment Trust (REIT), which would allow it to raise capital while retaining ownership of its assets. A REIT is a financial structure that enables investors to participate in real estate markets through tradable shares. Several Indian real estate firms have adopted the REIT model to generate funds for expansion while maintaining control over their assets.

The shareholder confirmed that floating a REIT is one of the options under consideration, alongside investor participation and acquisitions. Additionally, South City Projects is negotiating to acquire DLF IT Park II as part of its strategy to grow into a professionally managed real estate entity.

South City Mall, one of the largest shopping centers in eastern India, is a significant asset for the consortium. It attracts high footfall and is home to well-known domestic and international retail brands, including Zara, Sephora, and Marks & Spencer. Reports indicating that Blackstone was in talks to acquire the mall suggested that the US-based investment firm was looking to expand its footprint in Kolkata’s retail sector.

Blackstone already manages a large portfolio of retail assets in India through its Nexus Select Trust, which owns and operates 18 malls across 14 cities. The firm has been increasing its presence in the country’s commercial and retail real estate segments, with significant investments in shopping centers and office spaces. Another Blackstone-backed REIT, India’s Knowledge Realty Trust, sponsored by Sattva Developers, has recently filed for an initial public offering (IPO) worth ₹6,200 crore.

The growing interest of investment firms in retail properties reflects the expansion of India’s organized retail sector and the rising demand for high-quality commercial spaces. While Blackstone’s interest in South City Mall aligns with its broader investment strategy in India, the shareholder’s statement makes it clear that no deal is imminent.

The company continues to evaluate multiple options for growth, balancing investor interest with long-term sustainability. South City Projects maintains that any decision regarding external investment will be driven by financial prudence and strategic considerations rather than immediate financial concerns.