Nexus Select Trust acquires Vega City Mall for Rs 913 crore, expanding Bengaluru retail footprint
Nexus Select Trust, India’s first publicly listed retail-focused Real Estate Investment Trust (REIT), has further consolidated its position in Bengaluru’s retail sector with the acquisition of Vega City Mall for Rs 913 crore. The deal, which includes Rs 43 crore earmarked for sustainability initiatives and property enhancements, solidifies the company’s dominance in the city’s retail landscape. Spread across approximately 0.5 million square feet, Vega City Mall is a Grade-A retail asset strategically located in South Bengaluru, an area witnessing exponential urbanisation and consumer growth.
This acquisition marks Nexus Select Trust’s fourth mall in Bengaluru, making it the largest retail platform in the city in terms of the number of properties under management. With India’s retail sector poised for steady growth, the move aligns with the REIT’s long-term strategy of expanding in high-potential urban markets. The company’s portfolio now consists of 17 premium retail destinations across 14 cities, covering nearly 9.9 million square feet of gross leasable area.
Debt-Financed Deal Reflects Robust Financial Strategy
The transaction was entirely financed through debt, specifically non-convertible debentures (NCDs) issued at a 7.70 per cent interest rate during the December quarter. Following this deal, Nexus Select Trust’s loan-to-value (LTV) ratio now stands at 17 per cent, reflecting a calculated risk approach while maintaining financial stability. As of September 2024, the REIT’s LTV was at a conservative 14 per cent, ensuring prudent capital management.
For the first half of the fiscal year 2025, the trust reported a net operating income of Rs 7.4 billion, with total revenue from operations reaching Rs 11.1 billion. This growth underscores the company’s ability to generate sustainable returns for its unitholders. According to Nexus Select’s Executive Director and CEO, Dalip Sehgal, the acquisition was executed at a 10 per cent discount to independent valuations, making it a value-accretive deal that strengthens unitholder returns.
Civic and Urban Development Impact
With Bengaluru facing significant urban congestion and infrastructure challenges, the strategic positioning of retail hubs like Vega City Mall plays a crucial role in urban planning. The mall’s integration into Nexus Select’s portfolio signals a shift towards structured, professionally managed retail spaces that enhance consumer convenience.
The expansion of high-quality, professionally managed retail infrastructure reduces dependency on unregulated commercial hubs, which often lack adequate parking, pedestrian access, and public transport connectivity. This acquisition also underscores the growing trend of REIT-driven commercial real estate development, which promises greater transparency and long-term stability in India’s evolving retail market.
Sustainability at the Core of Retail Expansion
In a move towards eco-conscious retail development, Rs 43 crore of the acquisition cost is allocated for sustainability-driven upgrades, including renewable energy integration and green building enhancements. With India’s retail sector facing increasing scrutiny over its carbon footprint, the incorporation of sustainable infrastructure within Vega City Mall aligns with Nexus Select Trust’s broader Environmental, Social, and Governance (ESG) commitments.
The REIT’s focus on sustainability includes the implementation of solar panels, energy-efficient lighting, and water conservation measures, which contribute to long-term operational efficiency. These initiatives not only enhance the mall’s environmental performance but also provide cost savings for tenants and stakeholders. As the retail landscape in India evolves, sustainability will become a key differentiator for premium commercial properties, and Nexus Select Trust is positioning itself at the forefront of this transition.
With the acquisition of Vega City Mall, Nexus Select Trust is reinforcing its position as a leader in India’s organised retail sector. By combining strategic expansion with sustainable development and robust financial management, the REIT continues to shape the future of urban retail while delivering value to investors and consumers alike.
