Nexus Select Trust saw an 11% year-on-year rise in mall consumption for the April-June quarter, driven by a shift toward local spending. Foot traffic grew by 5% as families opted for domestic retail over international travel.
Nexus Select Trust, India's largest retail REIT, recorded an 11% increase in tenant consumption across its portfolio of 19 malls during the April-June quarter. This growth was accompanied by a 5% rise in foot traffic, reflecting a trend where consumers redirected their discretionary spending toward domestic shopping, dining, and entertainment venues.
Impact of Travel Shifts on Local Retail
Management indicated that global travel disruptions caused by geopolitical tensions in West Asia made international trips more expensive, leading many households to prioritize local experiences. This shift in spending patterns acted as a catalyst for retail categories such as fashion, food and beverages, and family entertainment. The company noted that the wedding season and auspicious events, including Akshaya Tritiya, also supported demand, particularly in the jewellery segment. Management observed a spillover effect where spending on jewellery often encouraged additional purchases in apparel and other retail categories.
Strategic Changes in Mall Composition
While overall performance remained positive, the company is actively refining its tenant mix to align with changing consumer preferences. Performance in the hypermarket segment remained subdued, prompting the trust to initiate the conversion of some hypermarket spaces into premium apparel stores. Furthermore, management noted that large multi-brand fashion retailers are seeing moderate growth in the high single digits, while specific brands are gaining more traction than traditional generic multi-brand outlets. This suggests a potential need for older brands to update their offerings to remain competitive.
Expansion and Acquisition Outlook
Nexus Select Trust continues to focus on growth through its acquisition strategy, which includes forward purchase agreements with developers. With a limited supply of high-quality, Grade-A retail assets available in the Indian market, the trust is pursuing new properties to expand its footprint. Recent activities include the acquisition of Diamond Plaza in Kolkata and ongoing discussions for other assets, such as a property in Dombivali. The trust is also exploring structures to integrate assets from family-led real estate firms, which may provide tax-efficient growth opportunities for the REIT.
Investors may monitor the progress of these asset integrations and the company's ability to maintain high occupancy levels while executing the shift from hypermarkets to more premium retail formats. The impact of these strategic changes on rental income and profit margins will be key updates in future quarterly filings.