In the single-largest deal in the retail real estate sector in India, Dutch pension fund asset manager APG Asset Management (APG) and Virtuous Retail, an arm of emerging markets investment firm The Xander Group (Xander), have partnered to form a joint venture (JV) which has acquired an initial portfolio of three retail assets from a Xander-sponsored fund in a transaction valued at Rs 2,000 crore.
APG has invested 77 per cent of the equity for a majority shareholding in the JV. Xander has invested the remaining 23 per cent. The two would have equal representation on the board of the new company which will be chaired by Sid Yog, the founder of Virtuous Retail.
Simultaneously, APG and Xander have committed an additional $150 million as equity capital, giving the new company an investment capacity of $300 million which would be used to expand the portfolio through new acquisitions and greenfield development.
Also Read
The JV has also integrated Virtuous Retail's 150-strong management and operational team in India, creating a new company - Virtuous Retail South Asia. Headquartered in Singapore, this company would be the partners' exclusive, integrated retail mall developer, owner, operator and asset manager for India. Rohit George, who was responsible for overseeing Xander's retail portfolio in India, has relocated to Singapore and joined as the managing director of this company and an executive director on the board.
"This is a landmark transaction for Indian retail real estate at a time when the sector is at an inflection point." said Sachin Doshi, Managing Director & Head of Private Real Estate Investments for Asia- Pacific at APG. "With the arrival and expansion of major global and domestic brands, coupled with the severe shortage of high quality malls, we believe organised retail is in early stages of take-off in the country."
"We have been impressed with Virtuous Retail's management team in India, institutional approach to lifestyle retail and the assets they have delivered to date. This transaction allows us to get immediate scale and access to a portfolio of dominant shopping centers and management capability through the integration of VR's Indian management and operating platform into Virtuous Retail South Asia," added Doshi.
