Nexus Select Trust posts 17% jump in retail consumption, ramps up expansion plans

India's first listed retail real estate investment trust, Nexus Select Trust, reported a strong start to FY27 as healthy consumer spending across categories and robust leasing activity helped it deliver double digit growth in consumption, net operating income and distributions to unitholders.

The performance comes even as the company acknowledged operating amid heightened global uncertainties, while continuing to pursue an aggressive expansion strategy to double its portfolio by 2030.

The retail REIT recorded quarterly consumption of ₹3,850 crore during the quarter ended June 30, marking a 17% year-on-year increase. Net operating income rose 11% to ₹510 crore, supported by higher retail sales and sustained leasing momentum across its portfolio of shopping centres.

The board declared a distribution of ₹370 crore, or ₹2.442 per unit, up 10% from a year ago and 7% sequentially. This marks the 12th consecutive quarter in which the trust has distributed 100% of its payout to unitholders. Since listing, the REIT has distributed more than ₹4,080 crore and generated an internal rate of return of 25% for investors.

Chief executive officer and executive director Dalip Sehgal said the quarter's performance demonstrated the resilience of the business despite macroeconomic uncertainties.

"I am pleased to share that we have delivered robust double digit consumption growth during the quarter despite heightened global uncertainties. This performance reflects the resilience of our portfolio and the strength of our operational execution in a challenging environment," Sehgal said.

He added that the 11% growth in net operating income and the 10% increase in distribution per unit were in line with management guidance.

Operationally, Nexus Select Trust continued to benefit from healthy retailer demand. The company re-leased 0.4 million square feet during the quarter at double digit spreads. Of this, around 0.2 million square feet was proactively renewed and re-leased ahead of lease expiries at spreads exceeding 20%, indicating landlords continue to enjoy pricing power in premium retail assets.

The trust also strengthened its tenant mix by adding brands such as Lego, Kurt Geiger and Harajuku Bakehouse to its portfolio, a move aimed at enhancing customer experience while reinforcing the premium positioning of its malls.

Next phase of expansion 

Beyond operational performance, the company is focusing on inorganic growth. It recently announced the acquisition of Diamond Plaza mall in Kolkata, with the transaction expected to close during the first half of FY27.

Sehgal said the acquisition pipeline remains strong, with eight retail assets being evaluated across India and two currently under due diligence.

"Aligned with our strategy to double the portfolio by 2030, we announced the acquisition of Diamond Plaza mall in Kolkata. We have also built a robust acquisition pipeline comprising eight retail assets across India, with two assets currently under due diligence," he said.

The company believes its balance sheet gives it ample room to pursue acquisitions. It ended the quarter with a loan to value ratio of 18%, an AAA/Stable credit rating and an average cost of debt of 7.2%, which is 30 basis points lower than a year earlier. It also said it has nearly $1 billion of available debt headroom to fund future growth opportunities.

While management flagged elevated global uncertainties as a challenge during the quarter, the trust did not report any operational setbacks or financial losses. Instead, it said broad based consumption growth across categories, sustained leasing demand and financial flexibility position it well to capitalise on expansion opportunities while continuing to deliver stable returns to unitholders.