Singapore-based developer/investor CapitaLand, once the biggest investor in Indian malls, seems to be catching up with global investors, such as Blackstone, GIC, and Virtuous Retail (a joint venture between Xander and Dutch pension fund APG) and, after going slow in recent years.
Recently, CapitaLand, the South East Asia’s largest property developer, appointed B V Bharadwaja as group country head for India. He will continue as country head for CapitaLand Mall Asia.
As group country head, Bharadwaja will look for growth opportunities for CapitaLand Group, including CapitaLand Mall Asia, Ascott or other suitable asset classes in the country, the group said.
Back in 2008, CapitaLand emerged as the biggest investor in malls in India when it said it was investing in 15 malls worth $1.45 billion with the aim of spinning them off into a real estate investment trust or Reit.
CapitaLand had said it would enter into a 50-50 joint venture with Bengaluru-based developer Prestige Group for seven malls in south India, and would take an undisclosed majority stake in eight malls in north India in another venture with Delhi-based developer Advance India Projects.
Currently, CapitaLand owns malls through CapitaLand Mall India Development Fund.
The fund owns stakes of varying sizes in eight malls, of which five are co-owned with Prestige and two co-owned with Advance India Projects. The eighth mall, located in Udaipur, is owned by the fund. Of the eight malls, four in Bengaluru, Hyderabad, Mangaluru and Udaipur are operational. The remaining two in Mysuru and Cochin are under development, while two in Nagpur and Jalandhar are land parcels pending development. “We continue to be on the lookout for opportunities across different asset classes in India,” Bharadwaja said in an emailed response.
But, industry experts say investors such as Blackstone have marched ahead in mall investments. Blackstone has bought seven malls in the past two years, when real estate markets were down and before the entry of others such as Canada Pension Plan Investment Board (CPPIB). Blackstone is inching closer
to becoming the biggest owner of malls in the country. Blackstone has a portfolio of 4.7 million sq ft and in talks with many developers/owners to buy malls. GIC, which owns a stake in R City mall of Runwal group in Mumbai, bought a 50 per cent stake in a mall in Thane on the outskirts of Mumbai for Rs 400 crore. It recently bought a 40 per cent stake in the rental arm of DLF, which includes offices and malls. Canada’s CPPIB signed a JV with Phoenix Mills, the largest mall owner in the country. Both have already acquired land parcels to build malls and are in talks with owners to buy existing malls.
Susil Dungarwal, founder and chief mall mechanic at Beyond Squarefeet, a mall management company, says CapitaLand has surely missed the bus in terms of mall investments despite being a pioneer.
“They should have bought a majority stake or full ownership of malls with Prestige and Advance India,” Dungarwal said. However, Dungarwal said opportunity still exits.
“They should be aggressive now as competition is high. Though a dozen malls are sold out, many are still on the block,” he said, adding that since they have mall management expertise with funds, they stand out. Bharadwaja said the group is focusing on its existing investments.