GIC, CPPIB bid for Bengaluru project

Investors bidding for 50 per cent stake in Phoenix Mills-owned mixed-use project Marketcity in Bengaluru

Singapore government's sovereign fund GIC and Canada's pension fund manager Canada Pension Plan Investment Board (CPPIB) have bid for 50 per cent stake in Phoenix Mills-owned mixed-use project Marketcity in Bengaluru, said a source in the know.

The project is valued at about Rs 1,000 crore, sources said.

"Both GIC and CPPIB have put in bids and Phoenix Mills is yet to take a call," said the source. Phoenix Mills Marketcity in Bengaluru has a mall of 1 million sq. ft and residential properties. Phoenix Mills is selling its 50 per cent stake in Pune project also. A mail sent to Atul Ruia, managing director of Phoenix Mills, did not elicit any response. GIC and CPPIB also did not respond to mails.

While GIC has investments in malls, CPPIB is yet to make any investment in mall in India. GIC has investment in R City mall in Ghatkopar in Mumbai. It recently bought 50 per cent stake in Viviana mall in Thane near Mumbai for Rs 350 crore.

Phoenix is expected to use the proceeds to develop new malls and acquire existing malls.

Recently, Ruia had said malls are a capital-intensive business and in this context they are always evaluating various fund-raising avenues, including but not limited to a new platform style joint venture, among others.

Phoenix Mills run its flagship High Street Phoenix and luxury mall Palladium in Mumbai. Both are considered as one of the top revenue-making malls in the country. It also owns four Marketcity projects in Kurla (Mumbai), Pune, Bengaluru and Chennai.

Private equity (PE) interest in malls is steadily rising. After lapping up two malls of Alpha G Corp in North India, US-based PE giant Blackstone recently bought a mall from L&T Realty in Seawoods in Navi Mumbai for about Rs 450 crore. It recently also bought a mall in Coimbatore in Tamil Nadu for Rs 450 crore.

Blackstone has created a separate company Nexus Malls to manage its malls.

Oberoi Realty, another Mumbai developer, is also looking to set up a mall investment platform with global investors such as Morgan Stanley and others.

Cities such as Bengaluru, Hyderabad, Delhi, Chennai, Mumbai and Pune are among the top 10 cities, with highest retail sales growth forecast between 2015-2019 in the JLL Destination Retail 2016 report. India has also emerged at second position in the 2016 Global Retail Development Index by A T Kearney.

"There is little doubt that the country is becoming an attractive destination for global retailers, with further liberalisation of the foreign direct investment policy and creation of business friendly environment. The growing potential of Indian retail market is already manifested by the entry of several marquee global retailers in last one year," property consultant JLL said recently.

RECENT MALL DEALS

• Blackstone bought Brookfields mall in Coimbatore for Rs 450 crore
   
• GIC bought 50% stake in Viviana Mall in Thane for Rs 350 crore
   
• Blackstone bought a mall from L&T Realty for Rs 1,400 crore
   
• Blackstone bought two malls of Alpha G Corp in North India
  

 

DLF sold a mall to its subsidiary