Its retail unit Nexus Malls has retail presence of 6 million square feet spread across nine malls
Private equity major Blackstone has built a retail presence of six million square feet in India through its subsidiary, Nexus Malls, taking it within a touching distance of leader Phoenix Mills in the retail mall space.
In July, Nexus Malls added its ninth mall with the opening of Esplanade One in Bhubaneswar.
“Blackstone is committed to growing its retail portfolio in India. Since its first retail investment in November 2015, Blackstone has a footprint of around 6 million square feet, making us one of the leading retail real estate owners in the country,” a Blackstone spokesperson told Moneycontrol.
“We intend to scale up our portfolio in the country as we are bullish about this sector,” added the spokesperson.
related news
Nexus Malls properties are mainly present in non-metros, in cities like Pune, Indore, Amritsar and Ahmedabad. Most of these properties were bought out.
Its biggest mall though is an organic one and is in Navi Mumbai – the Seawoods Grand Central Mall.
“We are now working on the second phase of the mall, which will be completed in the first quarter of the next financial year,” said Nishank Joshi, Chief Marketing Officer, Nexus Malls. The company will add a multiplex in the second phase, which will also increase the brand presence to over 220. “The mall will also have up to 40 restaurants in the second phase,” added Joshi.
Blackstone’s push for malls comes at a time when a majority of the malls in India continue to struggle, with many closing down. This has impacted mall completion, too, with a recent report by consulting firm JLL showing that this has dropped by 25 percent in the first half of this year.
“We have however continued to meet our targets. The company is looking at 30 percent growth in sales this year, and 12-15 percent increase in footfalls across the malls,” said Joshi.
Recent reports have added that Blackstone is looking to expand presence and is exploring opportunities in Kolkata.
In March, it roped in Dalip Sehgal, a FMCG veteran with stints in Godrej and Hindustan Unilever, as the CEO of Nexus Malls.
Turnaround strategy
Nexus Malls’ biggest turnaround success has been its property in Amritsar, called Mall of Amritsar. Blackstone had bought the mall from Alpha Group in 2015.
While it had met with success initially, increasing competition saw the mall's footfalls falling steadily. Nexus’s team brought about changes, which included shifting the food court.
“The food court was tucked away in one corner of the mall, we took it from there and relocated it in a way that it improved circulation across the mall,” says Joshi.
A staircase was taken off, which made the atrium bigger. New escalators were also installed.
“For Amritsar, we have been meeting our targets which were set for the first quarter. Historically, the mall was always 60 percent occupied. Post the turnaround, the mall is 85 percent occupied,” says Joshi.
Nexus Malls is the operating arm of Blackstone, with a staff strength of 3,000 people.
While each of the malls has a separate P&L account, many of the initiatives have been integrated. For instance, five of the big promotional events are held almost concurrently across all the properties. These include two end-of-seasons sales, and events around Diwali, summer and Christmas.