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Nexus Select Trust, India's first listed retail REIT, is well positioned for expansion through strategic mall acquisitions. The REIT aims to increase its portfolio by 1-1.5 million sqft annually through deals targeting existing and new markets. It is currently evaluating the acquisition of three Grade A Hyderabad malls at a 10% capitalization rate. The REIT's portfolio currently comprises 17 malls across 14 cities with over 10 million sqft. Potential additions could be in metro or non-metro cities, building on successes in Bhubaneswar and Mangalore. The REIT will consider attractive greenfield sites or opportunities in new markets. It has reported a quarter-on-quarter growth of 36.97% in its net consolidated profit during Q4 and a 13% growth in its net operating income.
Nexus Select Trust, India's first listed retail REIT, is looking to expand its portfolio through strategic acquisitions of more malls across major locations in the country. As part of its growth plans, the REIT aims to increase its geographical presence and total leasable area by around 1-1.5 million square feet annually. Advertisement
The acquisitions will target both existing markets where Nexus Select currently operates, as well as new markets. The REIT is looking to expand its portfolio through the acquisition of three Grade A malls in Hyderabad at an attractive stabilized capitalization rate of 10%. The REIT currently has a portfolio of 17 malls with a gross leasable area of around 10 msf across 14 cities.
The potential additions could be in both metro and non-metro cities. The REIT's existing non-metro malls in Bhubaneswar and Mangalore have been performing well. Nexus Select has been able to turn around many of the malls in its portfolio by bringing in strong tenants and optimizing tenant profiles.
If an attractive opportunity arises in a new market where Nexus Select does not currently have a presence, it will evaluate acquiring an asset. The REIT may also consider a few greenfield development sites. Nexus Select has a proven track record of adding around 1-1.5 million square feet to its portfolio annually and quickly stabilizing newly acquired assets to boost performance substantially above initial levels.
Nexus Select Trust reported strong fourth quarter and full year FY24 results. In Q4 FY24, the REIT achieved tenant sales of INR 2,800 crore, a 9% year-on-year growth. Tenant sales increased 13% to INR 12,000 crore over the previous year. During the quarter, 0.26 million square feet was leased across 181 deals, taking occupancy to a record high of 97.6%, an improvement of 130 bps over March 2023.
Net operating income for Q4 FY24 was INR 4,166 million, up 13% year-on-year, meeting full year guidance. With a robust balance sheet, attractive debt cost of 8.1%, and no near-term maturities, the REIT declared a Q4 distribution of INR 3,168 million or INR 2.09 per unit. For the period since listing, distribution was INR 7.08 per unit. The REIT refinanced INR 9,500 million at 8.1%, saving INR 40 million annually.
Nexus Select Trust has reported a quarter-on-quarter growth of 36.97% in its net consolidated profit during the quarter ended March 31, 2024. Its profit after tax stood at INR 1,463.58 million in Q4 FY24 as against INR 1,068.55 million it recorded in Q3 FY24. The company's net consolidated total income stood at 5,607.02 million in Q4 FY24, a quarter-on-quarter dip of 4.71 percent from INR 5,884.02 million it recorded in Q3 FY24.
Dalip Sehgal, CEO of Nexus Select Trust, added that the team exceeded FY24 projections and strong momentum positions the REIT well to achieve FY25 guidance of 9% NOI growth and 9-10% distribution growth, excluding acquisitions. Given the positive outlook, the REIT is confident in its ability to capitalize on growth opportunities.
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