MUMBAI: Retail-led mixed-use asset developer and operator
The Phoenix Mills
is looking to double its operational retail portfolio to around 12 million sq ft over the next 4-5 years from the current 5.9 million sq ft.
The company is eyeing acquisition opportunities judiciously in key property markets across India to support its targeted growth, said a top company official.
“We generate strong free cash flows from our retail assets and growing commercial office portfolio, and will aim to strategically deploy the internal accruals towards select greenfield and brownfield retail-led mixed use developments in select key cities of India such as Kolkata, Chandigarh, Hyderabad and Mumbai, amongst others,” Shishir Shrivastava, joint managing director, The Phoenix Mills, told ET.
Over the past 18 months, the company has already made five acquisitions, including three land parcels in Pune, Bengaluru and Ahmedabad and two under-construction retail assets in Lucknow and Indore.
Of these, Pune, Bengaluru and Indore acquisitions have been made through its strategic alliance with the Canada Pension Plan Investment Board. The Lucknow property is fully owned by the company and Ahmedabad is through a 50:50 alliance with realty developer BSafal Group. These properties will add 4.6 million sq ft to its portfolio.
“Beyond FY23 as well, we target to add at least 1 million sq ft of operational retail leasable space to our mall portfolio each year,” Shrivastava said while adding that Phoenix Mills is focused on delivering superior financial performance, maintaining a strong balance sheet, and efficiently allocating capital to create long-term shareholder value.
Across each asset, the company is aiming to maintain comfort around the debt servicing in terms of adequate interest coverage ratios or tenure of the debt.
“Our FY18 interest coverage ratio across the group is at around 2.2 times with interest coverage of retail assets ranging 2.5 times to 3.7 times of annual interest cost. Further, 97% of our debt is long-term in nature and there is very limited principal repayment that is due over the next 3 years,” he said.
On Monday, the company reported 49% year-on-year rise in consolidated net profit at Rs 62 crore for the quarter ended September. Revenue from operations rose 9% to Rs 404.7 crore. The company’s consolidated net profit for the half-year ended in September rose 45% to Rs 121.8 crore, up 45% from a year ago. Revenue for the first half of the financial year rose 7% to Rs 817.9 crore.
According to the company, consumption was up 14% in the second quarter at Rs 1,670 crore and retail rental income was up 17% at Rs 242.7 crore.