Nexus Select Trust has announced its strategic entry into Northeast India with a major development in Guwahati, Assam.
The listed retail REIT will acquire a 100% stake in the upcoming Galaxy Complex in Beharbari, Guwahati. The project will include a 0.5 million sq. ft. Grade-A Nexus Galaxy Mall and a 164-key Hyatt Regency Hotel.
The total purchase consideration is INR 1,600 crore. The assets will be developed by the seller based on mutually agreed specifications. Nexus Select Trust will take over operations after construction is complete and the required approvals are received.
Guwahati Entry Strengthens East India Strategy
The transaction is Nexus Select Trust’s first under-construction development deal in Northeast India. It is also the company’s second such transaction since its listing.
Guwahati is a key commercial centre and gateway to the eight Northeastern states. The city serves a wider regional catchment of more than 50 million people.
Nexus said Guwahati has strong potential for organised retail. The city also has limited Grade-A retail supply. The proposed project will give Nexus a presence in an underpenetrated retail market.
Guwahati has a population of more than 2 million and a per capita income of about $7,000. The city contributes around 45% of Assam’s Gross State Domestic Product.
Transaction Details
The mall and hotel will be acquired for a total consideration of INR 1,600 crore.
For the mall, the transaction implies an acquisition cap rate of 8.25% to 8.50%. The hotel transaction implies an EBITDA multiple of 11.5x to 12.5x.
The payment will be made after construction completion and receipt of required approvals. Nexus expects to fund the transaction through an estimated 40% debt raise. The remaining amount is expected to come through fresh unit issuance and a unit swap.
The final funding structure will be decided at transaction closure.
Nexus expects the transaction to be NAV and DPU accretive after acquisition. Post-acquisition loan-to-value is expected to remain below 20%.
Nexus Plans Wider East India Expansion
Nexus Select Trust said the Guwahati entry supports its wider East India growth strategy.
The company currently has an East India pipeline of six Grade-A retail assets. These assets total around 3.6 million sq. ft. across four key cities.
The company plans to expand across markets such as Kolkata, Guwahati, Siliguri, Patna, Bhubaneswar, Ranchi and Jamshedpur.
Nexus aims to build an East India portfolio that generates more than INR 600 crore in NOI. The portfolio is expected to contribute over 25% of its existing portfolio NOI.
Dalip Sehgal, Executive Director and Chief Executive Officer, Nexus Select Trust, said the Guwahati transaction is the first step in building a stronger presence across East and Northeast India.
Gautam Vaswani, Chief Acquisition Officer, Nexus Select Trust, said the transaction provides access to Northeast India without taking on development risk.
Nexus Select Trust Portfolio
Nexus Select Trust is India’s first publicly listed retail REIT. Its portfolio includes 19 Grade-A urban consumption centres with a Gross Leasable Area of 10.7 million sq. ft. across 15 cities.
The portfolio also includes three hotel assets with 450 keys and three office assets with a Gross Leasable Area of 1.3 million sq. ft.
Its consumption centres have around 1,100 domestic and international brands across more than 3,200 stores.
