The Phoenix Mills, India’s largest retail mall developer and operator, will set up a mall in Surat in partnership with BSafal Group. They are also set to open new malls in Indore and Ahmedabad, later in the year.
The company is also actively looking for opportunities in Jaipur, Hyderabad and Chandigarh for building malls that can either be owned 100 percent by Phoenix or by the joint venture company with GIC, the Singapore sovereign wealth fund, a top executive of the company said in a post earnings call.
Shishir Shrivastava, Managing Director, The Phoenix Mills, said, “At every location one can assume that the cost for the mall is going to be anywhere between ₹1,200-1,500 crore. We will be prudent in our capital allocation and not look at high leveraging. We have the capital available in our own balance sheet and also in the JV with GIC. We hope to conclude Surat and perhaps another two land parcels between Jaipur, Hyderabad and Chandigarh and another market.”
The company further claimed that the Phoenix Citadel Mall Indore, which is expected to open around September, has seen 74 percent of the retail Gross Leasable Area (GLA) being leased so far. Phoenix Palladium Ahmedabad will also be opened around Diwali and has seen leasing of 85 percent of GLA.
Phoenix Mall of the Millennium in Pune and Phoenix Mall of Asia at Hebbal, Bangalore will become operational by the first half of FY24. The Mall of Millennium, Pune has seen 51 percent of its retail GLA being leased while the number stands at 66 percent for Mall of Asia.
Scope for more in Chennai, Bengaluru
While the Phoenix’s management believes that it will have ‘covered’ the Pune market well with the two malls, the company feels that Bengaluru and Chennai can accommodate more malls.
“Certain micro markets in Gurugram have an opportunity for malls. In the Mumbai Metropolitan Region, I would say the Navi Mumbai belt continues to have an opportunity. So, there are specific micro markets in all metros where there are opportunities,” Srivastava added.
Together with a new mall planned for opening in Kolkata by early FY27, Phoenix’s total portfolio will increase to approximately 13 million square feet of retail GLA. Early last month, the company bought the balance 50 percent in Classic Mall Development Company (CMDCL) from Crest Ventures and Escort Developers for ₹936 crore. CMDCL owns Phoenix Marketcity in Chennai.
The Phoenix Mills has set a capital expenditure (capex) of ₹1,600 crore for FY23, which is an increase of 33 percent over the ₹1,200 crore incurred in FY22. The company has secured an additional finance line for ₹1,000 crore to fund the final leg of completion of the Indore, Pune and Hebbal malls. So far construction of these malls was funded entirely by equity.