 "Photo by Sanjay K Sharma")
After bulge bracket mall deals by Blackstone and GIC in Mumbai, global investors Canada Pension Plan Investment Board (CPPIB) and Macquarie are looking to buy malls in the country, said executives involved in the talks.
“CPPIB has started talking to mall owners while Macquarie has shown interest in buying malls. All these investors prefer fixed yields. After office assets, malls are on their radar,” said the head of a mall, who did not want to be named.
A Macquarie spokesperson said they did not have any comments on the matter. CPPIB did not respond to the e-mail.
CPPIB has invested in malls in Brazil, Korea and the US, and is looking to own mall assets here.
Last year, GIC had entered into a joint venture (JV) to acquire D-Cube Retail Mall in Seoul, South Korea, from Daesung Industrial for $263 million. It also has a JV with the Ajay Piramal group for debt financing to real estate developers and with Shapoorji Pallonji to invest in office assets. The $104-billion Macquarie Infrastructure and Real Assets (MIRA) has opened its office in the country and is looking to invest in the real estate market here.
"Funds are looking to invest or are investing in malls because they offer the highest return to risk ratio where risks are low and returns are high. With both inflation and consumption going up, rents are bound to go up," said Anand Sundaram, chief executive officer (CEO) at Pioneer Property Zone, a property management company.
Sundaram said in the malls they manage, profitability was growing at 12 to 15 per cent a year. "Even if inflation is eight to nine per cent, there is a net gain of four per cent.”
Sanjay Dutt, managing director at Cushman & Wakefield, said, “At a time, when the office segment is becoming very competitive and the yields are going down, retail is a good opportunity where Blackstone will have the first-mover advantage.”
Blackstone last week bought a mall in the Seawoods project of L&T Realty in Navi Mumbai for around Rs 1,300 crore. The US-based investor last year bought two malls developed by Gurgaon-based Alpha G Corp for Rs 800 crore. Singapore’s sovereign fund GIC bought a 50 per cent stake in Viviana Mall in Thane last month for over Rs 1,000 crore.
Both Blackstone and GIC are looking to buy other successful or high potential malls in the country, sources said.
Though there were reports that Tata Sons-owned Tata Realty & Infrastructure was looking to sell stake in three of its malls, its managing director Sanjay Ubale denied any such plans.
Mall talks
These investors have held talks with owners of Oberoi Mall in Goregaon and Lodha group's Xperia in Palava City on the Mumbai outskirts, said sources in the know.
“Potential investors have expressed interest in investing in the upcoming Xperia Mall and are liaising with us on the same though at present, we are not considering any external investment. Once the mall is successful, we will evaluate opportunities to determine the best suited way forward,” said Shaishav Dharia, regional CEO, Lodha Group. Xperia is slated to be completed in May.
“If Oberoi sells stake in the mall, it will go towards developing new malls,” said a source in the know. A mail sent to Oberoi Realty did not elicit any response.
KEY INVESTMENTS
-
CPPIB has invested in malls in Brazil, Korea and the US, and is looking to own mall assets here
-
CPPIB had entered into a joint venture (JV) with GIC to acquire D-Cube Retail Mall in Seoul, South Korea, from Daesung Industrial for $263 million
-
Last week, Blackstone bought L&T Realty's mall in Navi Mumbai for around Rs 1,400 crore
-
Blacktone bought two malls of Alpha G Corp for Rs 800 crore last year
