Virtuous Retail acquires three Indian malls for $500m

Virtuous Retail South Asia chairman Sid Yog. Photo: Hemant Mishra/Mint

Virtuous Retail South Asia Pte. Ltd (VRSA), the retail development joint venture between alternative investment firm The Xander Group Inc. and Dutch pension fund APG, has acquired two existing malls and an upcoming retail development project for around $500 million, said Siddharth Yog, its founder and chairman.

“We see greater opportunity in difficult times. In the retail business, we are expanding significantly. We have made three more acquisitions—two existing malls and one new development,” Yog said in an interview, adding that it was part of the company’s ongoing expansion plan for India.

With the latest acquisitions, Virtuous Retail will own and operate around 11 million sq.ft of retail space in India. “While one acquisition will mark the entry in one of the four metros, the two others are located in the 12 top cities in India.”

Yog, however, declined to disclose further information on the transactions.

The Bengaluru-based firm operates four malls—Bengaluru, Surat, Mohali, and Chennai—besides two under-construction malls, one each in Delhi and Bengaluru, which are part of mixed-use developments.

“All together for these three acquisitions, the total investment would be around $500 million. This goes to show that its a good time to be investing,” he said.

Virtuous Retail has been on an acquisition spree in the retail space over the past one year.

Mint had reported on 29 August 2018, that it was in talks with Mumbai-based Omkar Realtors and Developers Ltd to acquire an upcoming mall for 2,300 crore.

“There is opportunity for acquisition in the retail space, but it requires a lot of hard work as you need to have a lot of operating expertise on the ground. It is going to take a lot of capital and a lot of blood, sweat, and tears to make these opportunities perform the way they should.”

Yog said the company is also expanding to other asset classes. “We have announced three co-working centres. We just opened one in Chennai. We are opening one each in Hyderabad and Pune,” he added.

In 2016, Xander partnered with Dutch pension fund manager APG Asset Management NV to form a joint venture to acquire shopping malls for about $300 million. A year later, APG infused an additional $175 million ( 1,150 crore) of fresh equity into the platform.

The last two years have seen private equity firms and mall developers expanding their retail portfolio in tier II and III cities. According to a recent report by property consultants JLL, several retailers are making their entry in smaller cities and towns.

Funds like Blackstone have invested in successful malls in not only tier I but also in retail assets of tier II cities including Ahmedabad One mall, Elante mall in Chandigarh and Treasure Island mall of Indore, the report said.

The article was first reported on Livemint.com  

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.