SINGAPORE/MUMBAI, 02 June 2021 – GIC, Singapore’s sovereign wealth fund, and The Phoenix Mills Limited (“PML”; BSE: 503100 | NSE: PHOENIXLTD) have entered into a strategic partnership to establish an investment platform (the “Joint Venture”) for retail-led mixed-use assets in India. This platform will seek to develop, own, and operate retail-led, mixed-use developments in India.
GIC will acquire a significant minority stake in a US$733 million portfolio of retail-led mixed-use developments, located in the prime consumption centres of Mumbai and Pune. These assets, totalling ~3.4 million sq ft of leasable retail and office space, are currently amongst PML’s most prime and well-performing operational assets.
Lee Kok Sun, Chief Investment Officer of Real Estate, GIC, said, “We are pleased to partner with PML in this Joint Venture to acquire a stake in these best-in-class retail assets in prime locations in India. With the management capabilities of a leading partner like PML, we believe that the Joint Venture will generate resilient long-term returns. GIC has been investing in India for more than a decade and our long-term confidence in the Indian real estate market remains strong.”
Kishore Gotety, Co-Head (Asia ex-China) of Real Estate, GIC, added, “We recognise that the unprecedented global crisis is impacting consumer sentiments and that the necessary lockdown has made it challenging for all businesses, especially those in the retail sector. However, the long-term structural growth that the Indian retail industry continues to offer due to favourable demographics, urbanisation, growing middle class, and increasing consumerism trends will still benefit the Joint Venture. We expect continued strong performance in the Indian retail sector as organised retail penetration increases and population density remains high.”
Atul Ruia, Chairman of Phoenix Mills, said, “We are pleased to expand our relationship with GIC, a marquee sovereign wealth fund revered globally. GIC is a like-minded, long-term partner who shares our vision for creating, owning and managing best-in-class retail and commercial assets. Their investment reaffirms the enormous growth opportunity for quality physical retail infrastructure in India and, in particular, PML’s ability to develop, operate and manage market leading mixed-use assets. Through this platform with GIC, we intend to jointly explore value-accretive acquisition opportunities. Proceeds from the transaction received by PML will act as growth capital to both PML and its subsidiaries to explore and further enhance our portfolio of annuity income assets.”
Shishir Shrivastava, Managing Director of Phoenix Mills, said, “The partnership with GIC has taken shape at an opportune time, revalidating the long-term attractiveness of India’s resilient consumption story. It also underscores the fact that the current impact on pre-eminent brick-and-mortar retail is only transient. This investment will ensure the continuity of PML’s business model of developing, owning and operating dominant consumption hubs in Tier 1 city-centric micro-markets it chooses to be present in. The combination of growth capital availability from this partnership, along with our proven ability to execute large scale projects – will be a powerful force to help us deliver on our vison.
The current disruption has tested the elasticity of our business model, and has sharpened our capital budgeting to become even more secure for underwriting our decadal growth plans. With multiple vaccines now feasible, we see a clear path towards turning the corner past the 2nd wave. As restrictions start relaxing, we are optimistic of a sharp re-bound in consumption, as we experienced post the first wave. Even through this trying period, our stated strategy for expanding our portfolio in market leading destinations is on track and on speed.”
The transaction is subject to relevant regulatory approvals.