Nexus Select Targets Aggressive Expansion Through Acquisitions

Nexus Select is set on a rapid expansion plan, aiming to grow its portfolio from 19 to 30-35 malls within the next five years. The company will prioritize acquisitions, viewing this as a quicker and less risky path compared to developing new properties from scratch. Dalip Sehgal, the REIT's executive director and CEO, stated that about 80% of its future expansion will come from purchasing existing malls that are currently under-leased or under-operated. This acquisition strategy allows for immediate investment in assets that generate income, unlike new developments that can take up to seven years to become profitable. If suitable acquisitions are limited, Nexus will explore brownfield partnerships, using its established expertise in leasing, operations, and marketing.

Capitalizing on India's Evolving Consumption Habits

The company's expansion strategy aligns with significant changes in how consumers in India shop and spend. Organized retail currently accounts for only about 8% of total consumption, with e-commerce at roughly 7%, indicating substantial potential for growth in formal retail channels. Nexus Select believes India can support 250 to 300 quality malls, including those in smaller cities. The success of this model is already evident in cities like Bhubaneswar, Amritsar, and Mysore, which have shown high occupancy rates and strong performance.

Shifting Focus to Premium and Experiential Retail

Beyond acquiring and optimizing properties, Nexus is also focusing on premiumization. This involves expanding higher-margin categories such as jewelry and beauty, with new jewelry sections already launched in Chandigarh and Navi Mumbai. While standalone luxury malls may not be viable in most Indian cities, incorporating premium offerings strategically is seen as effective. The company observes a clear trend away from older retail formats dominated by hypermarkets towards experiences centered on fashion, beauty, and dining. Food and entertainment now contribute around 15% of Nexus's revenue and are its fastest-growing segments. Food courts are being transformed into social gathering spots. Nexus is also investing in marketing and enhancing the overall mall experience through events like sneaker festivals and concerts. The Nexus One mobile app, downloaded by over a million users, offers features like indoor navigation, promotions, and a loyalty program to encourage repeat visits and gather consumer spending data.