L&T Hyderabad Metro Rail sells three Metro Malls to Nexus Select; to net over $ 300 million

HYDERABAD: Nexus Select Trust, the retail-focused Real Estate Investment Trust (REIT) under global private equity giant Blackstone, has set its sights on strengthening its presence in the city with a potential acquisition of three strategically located malls from Larsen & Toubro (L&T) for approximately $300-350 million.

These malls, operating under the 'Hyderabad Next Galleria Malls' banner, are nestled near key metro stations, representing L&T's contribution to transforming the city's shopping and entertainment landscape. While L&T owns four malls along the metro line with a combined leasable area of 1.2 million square feet, Nexus has its eyes on three of those, encompassing a total area of 1 million square feet and boasting an impressive 84 percent leased occupancy.

E-Galleria, situated next to the bustling Hitec City metro station with its 2,00,000 square feet, is a likely contender in the deal. The sprawling Next Galleria Mall at Punjagutta Metro (500,000 square feet) and Premia near Irrum Manzil station are also believed to be part of the potential acquisition.

Neither Nexus Select Trust nor L&T have officially commented on the deal as yet.

Should the acquisition materialise, it would significantly boost Nexus Select Trust's retail portfolio, pushing it up to approximately 11 million square feet. However, it's important to note that a non-binding term sheet has been signed at this stage, with the final transaction hinging on pricing and valuation assessments.

Read More: Street plays and skits by college students to create voter awareness

Despite the uncertainty, all three malls boast a robust tenant base, anchored by popular retailer Reliance Trends and further strengthened by the presence of multiplex operator PVR-INOX.

This wouldn't be Blackstone's first foray into collaborating with L&T. In 2017, they acquired Seawoods Mall in Navi Mumbai from the engineering and construction giant for over ₹1,300 crore. At 1 million square feet, it stands as one of the REIT's largest retail properties, second only to Nexus Elante in Chandigarh.

As of September 2023, Nexus Select's retail portfolio boasted a gross asset value of ₹21,924 crore and an impressive 97% occupancy. The REIT also owns three office assets and two hotels, diversifying its holdings.

In the first half of FY24, the REIT reported a net operating income of around ₹600 crore on revenue of ₹815.6 crore, with the retail portfolio contributing a substantial ₹726 crore.

The potential acquisition of these L&T malls, if finalized, would signify Nexus Select Trust's continued bullish outlook on the Indian retail market, particularly in dynamic cities like Hyderabad, where strategic locations and strong tenant bases offer promising investment opportunities.