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Nexus Select Trust, a real estate investment trust backed by global private equity giant Blackstone, is reportedly in the initial stages of acquiring three malls in Hyderabad from Larsen & Toubro (L&T) for an estimated USD 300-350 million. These malls, known as 'Hyderabad Next Galleria Malls,' were strategically developed by L&T near metro stations to enhance the city's shopping and entertainment landscape.
There are four malls under L&T along the metro line with a total leasable area of 1.2 million square feet. Nexus has entered into a preliminary agreement for three of these malls with a total area of 1 million square feet and with a leased occupancy of 84%.
The expected properties involved in the deal include e-Galleria near Hitech City metro station (200,000 square feet), Next Galleria Mall at Punjagutta metro station (500,000 square feet), and Premia near the Irrum Manzil station.
The acquisition will increase Nexus Select Trust's retail portfolio to approximately 11 million square feet. The deal is currently based on a non-binding term sheet, and the final transaction will hinge on pricing and valuation considerations.
All three malls boast a robust tenant base, with Reliance Trends serving as an anchor tenant and PVR-INOX, the multiplex operator. This is not the first deal that Blackstone has done with L&T. In 2017, Blackstone acquired the Seawoods mall in Navi Mumbai from L&T for over Rs 1300 crore.
With around 1 million square feet, it is one of the largest retail properties in the REIT's portfolio, after Nexus Elante in Chandigarh. As of September 2023, the gross asset value of Nexus Select's retail portfolio was Rs 21,924 crore, with an impressive 97% occupancy rate. In addition to retail assets, the portfolio includes three office assets and two hotels. In the first half of FY24, the REIT reported a net operating income of around Rs 600 crore on revenue of Rs 815.6 crore, of which the retail portfolio's contribution was Rs 726 crore.
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