Phoenix Mills buys back stake in four malls for $210 million

Retail developer Phoenix Mills Ltd is buying back stake from various investors in four of its mall projects for approximately Rs 1,350 crore, making it the sole owner of the assets.
“Once the firm pays the last tranche of Rs 34 crore to one of the investors, IL&FS Investment Managers Ltd, for the remaining 6 percent stake in a suburban Kurla mall in Mumbai by 30 September, the process of giving exits to all its investors will be complete,” Joint Managing Director, Phoenix Mills, Shishir Srivastava, told Deal Street Asia.
Phoenix Mills, which had 24-70 per cent ownership in these assets and raised capital from a bunch of investors between 2006 and 2007, has been progressively buying back stakes in many of its special purpose vehicles (SPVs) holding various assets. The process is now complete. After these buyouts, the firm will still have partners in its Chennai and Bengaluru malls.
In April, Phoenix Mills and Canada Pension Plan Investment Board (CPPIB) announced the Canadian investor will invest $250 million in multiple tranches, to eventually own up to 49 percent in Island Star Mall Developers, a unit of the developer. Island Star Mall Developers currently owns Phoenix MarketCity in Bengaluru, a mall with gross leasable area of 1 million sq. ft.
Since the CPPIB tie-up, Island Star bought a land parcel in Pune from Kolte-Patil Developers Ltd for Rs160 crore. Phoenix Mills is also in the last leg of buying a partly-constructed mall in Indore for Rs 230 crore, which may be brought under CPPIB-Phoenix investment platform later.
“We are committed to deploying the capital before the year-end and have four new assets under CPPIB platform, each exceeding 1 million sq. ft. Our growth strategy revolves around the urban consumption story,” said Srivastava.
Phoenix owns and operates around 6 million sq. ft of shopping malls in Mumbai, Pune, Bengaluru, Lucknow, Chennai and Bareilly. Along with CPPIB, it plans to double this in five to six years.