Phoenix Mills, GIC to set up investment platform in India with $733 mn

Phoenix Mills Ltd and GIC have partnered to establish a $733 mn investment platform for retail-led mixed-use assets in India

Retail mall developer Phoenix Mills Ltd and Singapore's sovereign wealth fund GIC have partnered to establish a USD 733 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 company said in a regulatory filing on Wednesday.

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 transaction is subject to relevant regulatory approvals, the filing said.

Meanwhile, in a separate filing, Phoenix Mills said GIC will 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.

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

"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," he added.

Atul Ruia, Chairman of Phoenix Mills, 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.