The Phoenix Mills will be operationalizing four new large malls in key consumption centers of Pune, Bangalore, Ahmedabad and Indore over the next 12-15 months owing to a robust rebound in retail activity driven by pent-up demand and revenge shopping post the Covid19 pandemic.
Phoenix that counts Singapore sovereign wealth fund GIC and the Canada Pension Plan Investment Board (CPPIB) as its partners will hold around 4.4 million sq ft cumulative leasable retail space across the four malls.
The company is investing around Rs 4,000 crore to develop the retail component of these projects. Notwithstanding the disruption caused by the Covid19 pandemic over the last two years, retail consumption is making steady progress in recovery, which is supporting mall developers’ confidence to continue focusing on their plans to develop more malls across major cities of India.
“We are seeing very encouraging trends in consumption across all categories… Overall, we are cheered by the momentum that has been built up and consumption across all our malls and we are confident that the trend should continue going forward under normal operating conditions...We have further seen very strong trajectory in the first three weeks of May 2022,” Shishir Shrivastava, Managing Director, The Phoenix Mills said at earnings conference call.
According to him, barring the impact of the Delta wave in the first half of 2021-22, and the Omicron wave in the month of January 2022, consumption across all categories has recovered to pre-COVID levels in the year ending March 2022. The company has seen a strong recovery in consumption growth in the second half of 2021-22.
Of the total four malls, two malls with nearly 2 million sq ft space in Ahmedabad and Indore will start operations by Diwali this year. The company’s mall Phoenix Citadel Indore has already locked around 75% of its leasing through pre-commitments, while Palladium Ahmedabad property has completed 85% leasing, which indicates revived business confidence and expected further recovery in consumption.
Both malls Phoenix Millennium in Pune’s Wakad and Phoenix Mall of Asia Bangalore in Hebbal with around 2.4 million sq ft space will start operations next year and these have also completed over 50% leasing each.
Following the completion of these four properties and one more in Kolkata, the company’s total operational retail portfolio will grow to 13 million sq ft across 14 malls from the current 7 million sq ft across 9 malls. The company has seen total consumption worth over Rs 720 crore at its 8 operational malls across the country jump 129% over the pre-covid level in April 2019 and the trend has continued in May.
Last year, GIC and Phoenix Mills entered into a strategic partnership to set up a joint venture to develop, own and operate retail?led mixed?use developments in India. As part of this alliance, GIC will initially acquire a 26.4% stake in Phoenix’s Rs 5,500 crore worth select portfolio by investing an aggregate amount of Rs 1,111 crore.
A week prior to this development, CPPIB had also extended its partnership with Phoenix Mills to invest up to Rs 800 crore into their existing joint venture. The malls in Bangalore, Pune and Indore are being developed under the Phoenix-CPPIB joint venture.
The company has completed the acquisition of the balance 50% stake in Classic Mall Development Company (Phoenix Marketcity Chennai) for a consideration of Rs 936 crore and with effect from May 5, 2022, Classic Mall is now a wholly owned subsidiary of Phoenix Mills Ltd
