Nexus Select Trust Hits FY26 DPU Target Amid Strong Growth, Plans Acquisitions

Nexus Select Trust announced it met its full-year FY26 Distribution Per Unit (DPU) guidance of INR 9.1 per unit. This success was driven by strong operational performance in Q4 FY26, with consumption growing 19% and Net Operating Income (NOI) up 11% year-on-year.

Looking ahead, the REIT set an optimistic FY27 DPU target between INR 9.8 to INR 10.0 per unit. The company projects FY27 NOI between INR 2,050 to INR 2,070 crore, expecting leasing occupancy to exceed 98% and re-leasing spreads over 20%.

The company is actively expanding its portfolio. It plans to acquire Diamond Plaza mall in Kolkata, with the deal expected to close in H1 FY27, bolstering its presence in East India. Nexus Select Trust also has an agreement for a 0.7 million sq ft Grade-A mall under construction in the Mumbai Metropolitan Region (MMR), developed in partnership with Runwal Enterprises.

Why This Matters

These strategic moves align with Nexus Select Trust's goal to double its portfolio by 2030. The Kolkata mall acquisition strengthens its position in a key growth area. The partnership for the MMR mall helps reduce development risks and secures future Grade-A assets. Nexus Select Trust maintains a robust balance sheet, with roughly USD 1 billion in available debt and a credit rating of AAA/Stable.

The Backstory

Nexus Select Trust was established as India's first Real Estate Investment Trust (REIT) to provide investors with access to institutional-quality shopping malls. The REIT aims to generate steady income through rental yields and capital appreciation. In the past two years, it has pursued a clear growth strategy, making acquisitions to expand its asset base and geographic reach, supporting its vision to significantly scale its portfolio.

What Changes Now

• Stronger East India Footprint: Acquiring Diamond Plaza mall in Kolkata enhances presence in a key retail market.
• Lowered Development Risk: The MMR mall agreement reduces development and approval uncertainties.
• Faster Portfolio Expansion: A pipeline of 8 retail assets, plus two more under due diligence, supports the 2030 portfolio doubling goal.
• Consistent Investor Returns: Nexus Select Trust confirmed a 100% Net Distributable Cash Flow (NDCF) payout ratio for the 11th straight quarter.

Risks to Watch

• FY27 guidance depends on current market conditions and assumptions, which could change due to geopolitical events.
• Projections are unaudited by GAAP or Ind AS, meaning actual results might differ significantly.
• Forward-looking statements carry inherent risks. Macroeconomic changes could impact outcomes.

Peer Comparison

While Nexus Select Trust concentrates on retail malls, its peers like Embassy Office Parks REIT and Mindspace Business Parks REIT focus mainly on office spaces with different market drivers. Brookfield India REIT offers a mixed portfolio that includes retail. Nexus Select Trust's strong consumption and NOI growth in Q4 FY26, fueled by retail sector recovery, contrasts with the more stable, lease-based dynamics typical of office REITs.

Key Financial Metrics

• Q4 FY26 NOI Growth: 12% year-on-year.
• FY26 Revenue from Operations: INR 2,568.00 cr.
• FY26 Net Operating Income: INR 1,929.60 cr.
• FY27 NOI Guidance: INR 2,050 - 2,070 cr.

What to Track Next

• Watch for the official closing of the Diamond Plaza mall acquisition in Kolkata.
• Track due diligence progress for two other assets in the acquisition pipeline.
• Monitor the performance and integration of new assets like Diamond Plaza and the MMR mall.
• Observe retail consumption trends and their effect on NOI and occupancy.
• Look for updates on further acquisitions or development progress.