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Phoenix Mills, GIC to set up USD 733 mn investment platform for retail-led assets in India

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Leading retail real estate developer The Phoenix Mills Ltd and Singapore’s sovereign wealth fund GIC have partnered to establish a USD733 million (approx Rs 5,362 crore) investment platform for retail-led mixed-use assets in India.

“GIC and Phoenix Mills to establish a retail-led mixed-use investment platform in India with an initial portfolio of USD 733 million,” The Phoenix Mills Ltd said in a statement. GIC will acquire a significant minority stake in a USD 733 million portfolio of retail-led mixed-use developments, located in the prime consumption centres of Mumbai and Pune, the company added.

The statement said that the transaction is subject to relevant regulatory approvals. In a separate statement, Phoenix Mills said that GIC would initially acquire an equity stake of 26.4 per cent in the Phoenix Mills’ subsidiaries by investing an aggregate amount of approximately Rs 1,111 crore by way of a combination of primary infusion and secondary purchase of equity shares in the said Phoenix Mills’ subsidiaries.

“The platform is valued at a pre-money enterprise value of Rs 5,500 crore. GIC’s stake may further increase to 33-36 per cent in the subsidiaries through an additional infusion of up to Rs 400 crore within 12-month period from closing,” the company added.

Atul Ruia, CMD, The Phoenix Mills Ltd said, “Through this platform with GIC, we intend to jointly explore value-accretive acquisition opportunities. Proceeds from the transaction received by Phoenix Mills will act as growth capital to both Phoenix Mills and its subsidiaries to explore and further enhance our portfolio of annuity income assets.”

Kishore Gotety, Co-Head (Asia ex-China) of Real Estate, GIC said the fund expects continued strong performance in the Indian retail sector as modern retail penetration increases and population density remains high.