Nexus Select Trust REIT
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Nexus Select Trust is a retail REIT (Real Estate Investment Trust) that owns and operates high-quality shopping malls and other retail properties in India. It is sponsored by global investment firm Blackstone
Here are some key facts about Nexus Select Trust:
i. It has a portfolio of 17 operational shopping malls across 14 major cities, covering a 9.8 million square feet area. Some of its prominent properties include Select Citywalk in Delhi, Nexus Seawoods in Navi Mumbai, Nexus Koramangala in Bengaluru, Nexus Elante in Chandigarh, and Nexus Ahmedabad One in Ahmedabad.
ii. It also owns two complementary hotel assets (354 keys), and three office assets of 1.3 million square feet as of December 31, 2022.
iii. It has a diversified tenant base of over 1,000 national and international brands across around 3,000 stores. Some of its leading tenants are Apple, Zara, H&M, Uniqlo, Sephora, Superdry, Lifestyle, Shoppers Stop, Starbucks, McDonalds among others.
iv. It generates income from leasing out retail space to various brands and tenants. It also enhances the value of its properties by investing in renovation, expansion and tenant mix optimization. It distributes at least 90% of its net distributable cash flow to its unit holders as dividends on a quarterly basis.
v. It plans to double its portfolio in next 4-5 years through acquisition mode. It has a strong pipeline of potential acquisitions of over 10 million square feet across 12 cities.
Objects of the Nexus Select Trust REIT:
The Nexus Select Trust will not receive any proceeds from the offer for sale and the proceeds received will not form part of the net proceeds.
The Net Proceeds from the Fresh Issue will be utilised towards the following objects:
i. Partial or full repayment or prepayment and redemption of certain financial indebtedness of the Asset SPVs and the Investment Entity;
ii. Acquisition of stake and redemption of debt securities in certain Asset SPVs; and
iii. General purposes
Nexus Select Trust REIT Details:
| Open Date: | May 09 2023 |
| Close Date: | May 11 2023 |
| Total Shares: | 32 Cr |
| Face Value: | ₹ 10 Per Equity Share |
| Issue Type: | Book Built Issue REIT |
| Issue Size: | 3200 Cr. |
| Lot Size: | 150 Shares |
| Issue Price: | ₹ 95-100 Per Equity Share |
| Listing At: | NSE,BSE |
| Listing Date: | May 19 2023 |
Promoters And Management:
Michael Holland is an Independent Director of a Manager, has 23+ years' experience in commercial real estate, a master's degree in Property Development, and has worked as CEO for Embassy Office Parks and Assetz Property Group. He founded JLW India and is a fellow of the Royal Institution of Chartered Surveyors. He's also an independent director for Samhi Hotels.
Sadashiv S. Rao is an Independent Director of a Manager with a background in technology and management. He is held top positions in IDFC Limited and NIIF Infrastructure Finance Limited. Rao currently sits on the board of YES Bank Limited and has previously served on several other company boards.
Alpana Parida is an Independent Director of a Manager, has over 20 years of experience in retail, luxury, branding, and design. She's the founder and CEO of Tiivra Ventures and currently serves as a director on the board of several companies.
Jayesh Merchant is an Independent Director of a Manager with a commerce and law background, 35+ years of experience, and previous roles at Castrol India, Ion Exchange, UTV Software, and Asian Paints (CFO and company secretary).
Financials of Nexus Select Trust REIT:
A) Balance Sheet
B) Profit & Loss Statement
C) Cash Flow Statement
| Particulars (in Cr) | Mar-20 | Mar-21 | Mar-22 |
| Equity Share Capital | 225 | 248 | 325 |
| Reserves | 2,101 | 1,414 | 1,399 |
| Borrowings | 5,955 | 6,280 | 6,308 |
| Trade Payables | 117 | 97 | 81 |
| Other Liabilities | 1,129 | 920 | 976 |
| Total Liabilities | 7,202 | 7,297 | 7,366 |
| Net Block | 452 | 423 | 421 |
| Capital Work in Progress | 0.00 | 21 | 0.00 |
| Investments | 6,601 | 6,420 | 6,418 |
| Other Assets | 1,277 | 854 | 784 |
| Total NC Assets | 8,329 | 7,718 | 7,622 |
| Receivables | 136 | 149 | 116 |
| Inventory | 143 | 149 | 125 |
| Cash & Bank | 166 | 251 | 290 |
| Other Assets | 754 | 693 | 937 |
| Particulars (in Cr) | Mar-20 | Mar-21 | Mar-22 |
| Sales | 1,622 | 907 | 1,318 |
| Purchase | 16 | 7 | 11 |
| Change in Inventory | 6 | 1 | 28 |
| Power and Fuel | 0.00 | 0.00 | 0.00 |
| Other Mfr. Exp | 296 | 181 | 224 |
| Employee Cost | 117 | 95 | 113 |
| Selling and admin | 0.00 | 0.00 | 0.00 |
| Other Expenses | 196 | 151 | 165 |
| Other Income | 86 | 141 | 80 |
| Depreciation | 261 | 251 | 243 |
| Interest | 560 | 553 | 524 |
| Profit before tax | 256 | -210 | 72 |
| Tax | 49 | -11 | 83 |
| Net profit | 207 | -199 | -11 |
| Particulars (in Cr) | Mar-20 | Mar-21 | Mar-22 |
| Cash From Operating Activity | |||
| Operation Cash Flow Before WC | 991 | 485 | 775 |
| Receivable | -28 | -22 | 30 |
| Inventory | 0.00 | 0.00 | 0.00 |
| Payable | 13 | -11 | -9 |
| Loans And Advances | 0.00 | 0.00 | 0.00 |
| Other Current Assets | 10 | -1 | -3 |
| Other Current Liabilities | -10 | -10 | 9 |
| Working Capital Changes | 33 | -107 | 72 |
| Direct Taxes | -114 | 35 | -100 |
| Net Cash Inflow from Operating Activity | 911 | 413 | 747 |
| Cash from Investing Activity | |||
| Fixed assets purchased | -608 | -172 | -126 |
| Fixed assets sold | 0.02 | 32 | 0.16 |
| Investments purchased | 0.00 | 0.00 | 0.00 |
| Non-Current Asset | 0.00 | 0.00 | 0.00 |
| Investment received | 0.00 | 0.00 | 0.00 |
| Dividends received | 2 | 0.16 | 0.34 |
| Investment in subsidiaries | 0.00 | 0.00 | 0.00 |
| Investment in group cos | 0.00 | 0.00 | 1 |
| Redemp n canc of shares | -75 | 37 | -160 |
| Acquisition of companies | 0.00 | 0.00 | 0.00 |
| Inter-corporate deposits | -416 | 5 | -58 |
| Other investing items | 89 | 173 | 72 |
| Net cash inflow from investing activities | -1,008 | 75 | -271 |
| Cash from Financing Activity | |||
| Proceeds from shares | 0.00 | 3 | 0.00 |
| Repayment of Share Capital | -46 | 0.00 | 0.00 |
| Proceeds from borrowings | 2,526 | 1,632 | 1,927 |
| Repayment of borrowings | -1,618 | -1,633 | -1,895 |
| Proceeds from deposits | 0.00 | 0.00 | 0.00 |
| Intrest paid fin | -508 | -407 | -414 |
| Dividends paid | -79 | -13 | 0.00 |
| Financial liabilities | -3 | -4 | -4 |
| Other financing items | -167 | 20 | -52 |
| Net Cash Flow | 157 | 166 | 251 |
Comparison With Peers:
The Nexus Select Trust does not have any industry peers as on date of this Offer Document as there
are no listed real estate investment trusts in the retail sector in India.
Recommendation on Nexus Select Trust REIT:
Review and Recommendation of Nexus REIT by IZ team is 5/10
1. Diversified Portfolio: Nexus REIT has a diversified portfolio of 17 operational shopping malls, two hotels, and three office assets. This provides a mix of revenue streams for the company and helps to mitigate risk associated with any one particular asset class.
2. Dependence on Footfall: As a mall-focused REIT, Nexus REIT's revenue is primarily dependent on footfall in their shopping malls. While this can be a lucrative business in good times, it also makes the company vulnerable to economic downturns, as seen during the COVID-19
3. COVID-19 Impact: The COVID-19 pandemic has severely impacted the company's financial performance, as evidenced by the losses in the P&L statement. However, with the easing of restrictions and a gradual return to normalcy, there is potential for recovery in the coming years.
4. Fixed Dividend Income: One of the main attractions of investing in a REIT is the fixed dividend income that investors receive every quarter. As per management commentary, Nexus REIT is expected to provide an 8.5% fixed dividend in FY23-24. This can be an attractive option for investors looking for steady income streams.
5. Retail Story: Nexus REIT provides an opportunity for investors to participate in the retail story of malls. While this may be a risky proposition in the short term due to the impact of COVID-19, in the long term, malls can provide a stable and growing source of revenue.
Overall, while the business model of Nexus REIT has its strengths and weaknesses, it can be a good option for investors looking for a diversified portfolio with a focus on retail. However, investors should also be aware of the risks associated with this business model, particularly in light of the COVID-19 pandemic and the potential for economic downturns.
Lead Manager of Nexus Select Trust REIT:
- Axis Capital Limited
- BofA Securities India Limited
- Citigroup Global Markets India Private Limited
- HSBC Securities & Capital Markets Private Limited
- IIFL Securities Ltd
- JM Financial Consultants Private Limited
- Kotak Mahindra Capital Company Limited
- Morgan Stanley India Company Private Limited
- SBI Capital Markets Limited
Registrar of Nexus Select Trust REIT:
Company Address:
Nexus Select Trust
Embassy 247, Unit No. 501,
B Wing, Lal Bahadur Shastri Marg,
Vikhroli West, Mumbai 400 083
Phone: +91 22 6280 5000
Email: investor.relations@nexusmalls.com
Website: https://www.nexusselecttrust.com/
Discussion on Nexus Select Trust REIT:
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Nexus Reit
Basis Of Allotment:
QIB – 5.06959x
HNI – 5.92756x
Any guess on Listing Gain?
REIT is more of long-term instrument with almost 8.5% expected Dividend in Fy23-24 and price appreciation in the stock based on NAV.
Here are some key facts about Nexus Select Trust
i. It has a portfolio of 17 operational shopping malls across 14 major cities, covering a 9.8 million square feet area. Some of its prominent properties include Select Citywalk in Delhi, Nexus Seawoods in Navi Mumbai, Nexus Koramangala in Bengaluru, Nexus Elante in Chandigarh, and Nexus Ahmedabad One in Ahmedabad.
ii. It also owns two complementary hotel assets (354 keys), and three office assets of 1.3 million square feet as of December 31, 2022.
iii. It has a diversified tenant base of over 1,000 national and international brands across around 3,000 stores. Some of its leading tenants are Apple, Zara, H&M, Uniqlo, Sephora, Superdry, Lifestyle, Shoppers Stop, Starbucks, McDonalds among others.
As of December 31, 2022, 95.5% of Nexus tenant leases provide for Minimum Guaranteed Rentals with typical contractual rent escalations of 12% to 15% over a period of three to five years, and 88.3% of the leases contained Turnover Rental arrangements which allow them to capitalize upon growth in tenant sales driven by increased consumption.
Nexus Ke malls pe footfall kafi badiya hai. Delhi ka Select Walk Mall…. I have seen personally…..Chandigarh ke Nexus Elante pe bhi one of the highest footfall hai
Baki people with different states can share their experience with Nexus mall in terms of footfall Delhi, Mumbai, Chandigarh, Ahmedabad, Blore, Indore…