Over the next 3-4 years, Phoenix Mills Ltd will be adding over 8 million sq ft of space to its retail and office assets as consumption soars, footfalls surge and demand for office gains momentum.
It is banking on its global funding partners Canada Pension Plan Investment Board (CPPIB) and Singapore’s sovereign wealth GIC to drive its next leg of expansion. It has six assets under a JV with CPPIB and five assets with GIC.
Rising like a ‘phoenix’ from the freeze on operations due to the Covid-19 pandemic, scanty footfalls, rising consumer inflation, and reduced rents, the mall operator is forging ahead with its expansion plans.
Its retail portfolio is set to rise 75 per cent to 14 million sq ft and its office portfolio is to rise 3.5 times to 7.1 million sq ft.
By June this year, three malls in Ahmedabad, Pune and Bengaluru will be operational, adding over 3 million sq ft while 2.4 million sq ft of office space will also be ready. In FY25 and FY27, two more malls will start operations. It is also expanding existing malls in Mumbai, Bengaluru and Chennai through densification.
While a few cities are already under consideration for potential expansion such as Jaipur, Hyderabad and Chandigarh, the company is also evaluating tier-2 cities such as Nagpur, Goa and Vizag.
Retail consumption across nine malls, based on indicative sales by its tenants, was at ₹816 crore in January, up nearly two-thirds on year and far in excess of January 2019 levels.
According to the company, its entertainment centers and multiplexes are drawing in people. However, supermarkets and hypermarkets are seeing a fall in numbers. The company is trying to fix this through a better mix of products and brands.
Phoenix Mills, which in mid-2020 had expected a long haul to recovery, is seeing a leasing occupancy of 94-99 per cent across its malls, and trading occupancy between 87 and 95 per cent.
With more fit-out stores becoming operational, the mall operator will see a ramp-up in its trading occupancy over the next few months.