Alternative investment firm The Xander Group’s retail arm has agreed to buy a 20-acre land parcel in Thane, Mumbai from Raymond Group for Rs 700 crore (about $100 million).
Xander said in a statement that unit Virtuous Retail South Asia Pte Ltd will invest an additional $240 million to build a retail-focussed mixed-use project covering an area of 3.7 million sq ft at the site.
The transaction will increase Virtuous Retail’s pan-India portfolio to 11 million sq ft across the national capital region, Mumbai, Chennai, Bengaluru, Surat and in Punjab.
“Prime land parcels of this size seldom trade, especially in major metropolitan markets like Mumbai. We have been waiting patiently for the ideal opportunity to expand… into the Mumbai region,” said Sid Yog, founder and chairman, Virtuous Retail.
The deal is in line with Virtuous Retail’s strategy to develop projects from the ground up, the statement said. Apart from the Thane project, the firm is building two projects in South Bengaluru and Delhi-NCR that are slated to open in May 2020 and August 2022, respectively.
Gautam Hari Singhania, chairman and managing director at Raymond Ltd, the sale is part of the group’s steps to monetise its assets.
Xander had partnered with Dutch pension fund manager APG Asset Management NV to form a joint venture to acquire shopping malls for about $300 million in 2016. The Dutch investor infused an additional $175 million of fresh equity into the platform the following year.
Retail as an asset class has been on the radar of investors over the past few years. Blackstone, one of the top owners of rent-yielding assets in the country, has built a portfolio of at least 10 malls in India while Canada’s Brookfield is also looking to add retail to its real estate portfolio in India.