Phoenix Mills buys Indore mall for Rs 235 cr

Phoenix Mills, the country’s largest mall developer, has bought an under-construction mall in Indore’s MR 10 area for Rs 235 crore.

The mall was bought in an auction conducted by JM Financial Asset Reconstruction Company. The firm outbid local mall developer Pintu Chhabra. Sources said the lenders went for auctioning as the mall owners, the Kalani family, were not able to not pay their dues.  

The property has a development potential of 2.5 million square feet. 

Atul Ruia, joint managing director, Phoenix Mills, said they were evaluating the possibility to bring the acquired mall under the newly-formed joint platform with Canadian investor CPPIB.
 

It is also in talks with US-based real estate developer, JJ Gumberg, and private equity firm Lapis India Capital to buy North Country mall in Chandigarh. The mall is valued at around Rs 700 crore and the buyer has to take over Rs 450-crore debt on it.  

Blackstone and Virtuous Retail South Asia, a joint venture between Xander Funds and APG, are in the race to buy it.

“We want to maintain our leadership in malls and buy brownfield assets and build new ones in metros and tier-II cities,” Ruia said.

Deals in malls have been rising in the past couple of years. Last year, Blackstone bought a 50 per cent stake in a Pune mall for about Rs 500 crore. Earlier, it had bought one in Navi Mumbai from L&T Realty for Rs 1,450 crore. 

Abu Dhabi sovereign fund Adia (estimated assets of $773 billion) is in the final leg of talks with Lake Shore India Advisory, promoted by retail property veteran Ashwin Puri, and others to give a managed account to the latter to invest in malls in top Indian cities, said sources. Lake Shore is an investment manager.

However, about five malls shut down last year and ten others changed their usage to offices, educational institutes, shopping clusters, hospitals and banquet halls resulting in 3.5 million sq ft of retail space (across 15 malls across India) getting withdrawn from the operational stock, according to property consultant JLL.

These malls were operational in Chennai, Delhi-NCR, Mumbai and Pune.

JLL expects about ten malls to go off business this year also.

It is not the first time that malls were shut or converted into something else,  but the quantum this time around was far higher than all previous withdrawals (1Q2010-4Q2015) put together, said Pankaj Renjhen, managing director - retail services, JLL.