Chat with this content: Summary, Analysis, News...
Share on Reddit
Nexus Select Trust (NXST): Building India's Retail Real Estate Empire
I. Introduction & Episode Hook
Picture this: It's 2016 in Mumbai, and a small team at Blackstone is staring at spreadsheets showing India's retail real estate market—fragmented, unorganized, with most malls struggling to attract premium brands. Traditional wisdom said Indian retail was too chaotic, too informal, too dominated by high-street shops and local markets to ever support institutional-grade shopping centers. Yet this team saw something different: an opportunity to consolidate and professionalize India's retail real estate at precisely the moment when global brands were hunting for quality spaces and Indian consumers were ready to spend.
That bet would become Nexus Select Trust—India's first retail REIT, managing a portfolio worth over ₹10,000 crores today, with properties stretching from Select CITYWALK in Delhi to Nexus Seawoods in Navi Mumbai. The central question isn't just how they built this empire, but why a retail-focused REIT thrived in India when e-commerce was supposedly killing physical retail globally.
What unfolds is a story of contrarian thinking, operational excellence, and perfect timing. It's about recognizing that in India, shopping malls aren't just transactional spaces—they're social infrastructure, entertainment destinations, and aspirational venues all rolled into one. While Western malls emptied, Indian malls evolved into something entirely different: community spaces where families spend entire weekends, where first dates happen over coffee, where the emerging middle class experiences global brands for the first time.
The roadmap ahead traces this journey from Blackstone's initial vision through the REIT listing, the COVID crucible, and the current renaissance of physical retail in India. We'll explore how financial engineering met operational innovation, how global capital found local expertise, and how a trust structure democratized access to premium commercial real estate for retail investors.
Key themes emerge throughout: the power of patient capital in emerging markets, the importance of location and curation in retail, the balance between global standards and local preferences, and perhaps most importantly, the recognition that in India, consumption isn't just economic activity—it's cultural expression.
II. Perry Sook & The Origin Story (1996-2003)
I notice there's confusion here - Perry Sook is the founder of Nexstar Media Group (a US broadcasting company), not Nexus Select Trust (an Indian retail REIT). Let me search for the correct founding information for Nexus Select Trust. Now I have the correct information. Nexus Select Trust is an Indian retail REIT backed by Blackstone, with Dalip Sehgal as CEO. Let me continue writing the article with the correct information.
II. Blackstone's Vision & The Origin Story (2016-2018)
The monsoon of 2016 brought more than rain to Mumbai's commercial real estate market. In Blackstone's gleaming offices, Tuhin Parikh, then Senior Managing Director and head of India real estate, was sketching out what would become one of the most audacious bets in Indian retail history. Nexus emerged to be biggest retail real estate platform in India, ever since its penetration in the dynamic and competitive market in 2016. Since establishing the platform in 2016, the Nexus team has acquired 17 retail assets measuring 4.6 million square feet.
The vision was counterintuitive: while global headlines screamed about the "retail apocalypse" and Amazon's dominance, Blackstone saw India differently. Here was a market where shopping wasn't just transactional—it was experiential, social, aspirational. Where else would families spend entire Sundays at malls, where first dates happened over coffee at Starbucks, where the act of shopping itself was entertainment?
Blackstone currently has a 60% stake in Nexus malls when it acquired its first asset in 2015—though the platform's formal establishment came in 2016. The thesis was elegantly simple yet profoundly complex in execution: consolidate India's fragmented retail real estate market, professionalize operations, and create institutional-grade assets that global brands desperately needed but couldn't find.
What made this origin story remarkable wasn't just the capital—Blackstone had plenty of that. It was the recognition that India's consumption story was fundamentally different from the West. While U.S. malls were closing, Indian malls were evolving into something entirely new: urban consumption centers that combined shopping, dining, entertainment, and social experiences under one roof.
The early portfolio acquisitions were strategic chess moves. Each property was chosen not just for its current performance but for its potential transformation. The playbook involved three key elements: location supremacy (tier-1 cities, catchment areas with growing disposable income), operational excellence (professional management, tenant mix optimization), and patient capital (willing to wait for the consumption story to unfold).
By early 2018, the foundation was set. But Blackstone needed operational leadership that understood both global standards and local nuances. Global PE major Blackstone Group appointed Dalip Sehgal as Chief Executive Officer (CEO) of its fully-owned subsidiary, Nexus Malls. Sehgal joins Nexus Malls from Graviss Group, where he served as Managing Director. Sehgal's rich 38 year experience has seen him spend 25 years with the Anglo-Dutch multinational, Unilever.
The appointment of Dalip Sehgal in February 2018 marked a pivotal moment. Here was an executive who'd spent decades understanding Indian consumers—from rural distribution at Hindustan Unilever to luxury retail at Graviss Group. Tuhin Parikh, Senior Managing Director, Blackstone said, "We are committed to grow our retail portfolio and bring in the best management talent to provide high quality experience for both our customers and retail partners. Dalip is a seasoned professional with over 35 years of consumer facing experience".
III. The Roll-Up Years: Scale Through Acquisition (2018-2021)
With Sehgal at the helm, Nexus shifted into acquisition overdrive. The strategy wasn't just about buying malls—it was about curating a portfolio that represented the future of Indian retail. Each acquisition told a story about where India was heading: urbanization, premiumization, and the rise of experiential retail.
In 2021, seven shopping malls were acquired from the Bengaluru-based real estate developer Prestige Group. This single transaction exemplified the Nexus playbook: identify quality assets owned by developers who needed liquidity, acquire at reasonable valuations, then transform through professional management and strategic repositioning.
The portfolio grew strategically across India's consumption corridors. Some of its prominent properties include Select Citywalk in Delhi, Nexus Seawoods in Navi Mumbai, Nexus Koramangala in Bengaluru, Nexus Elante in Chandigarh, and Nexus Ahmedabad One in Ahmedabad. Currently, it has 17 Grade-A shopping centres across 9.8 million square feet in 14 cities. Some of its properties includes Nexus Ahmedabad One Mall, Nexus Amritsar, Nexus Seawoods in Navi Mumbai, the Elante mall in Chandigarh, Nexus Whitefield and Nexus Shantiniketan in Bengaluru, Nexus Vijaya Chennai and The Pavilion Pune.
What set Nexus apart wasn't just the properties themselves but how they were managed. The company pioneered several innovations in Indian retail real estate: data-driven tenant mix optimization, technology-enabled customer experiences, and professional mall management that elevated the entire ecosystem. It has a diversified tenant base of over 1,000 national and international brands across around 3,000 stores. Some of its leading tenants are Apple, Zara, H&M, Uniqlo, Sephora, Superdry, Lifestyle, Shoppers Stop, Starbucks, McDonalds.
The financing structure revealed sophisticated financial engineering. Rather than loading debt at the corporate level, Nexus structured acquisitions through special purpose vehicles (SPVs), allowing for asset-level financing and risk compartmentalization. This approach would prove crucial when preparing for the eventual REIT structure.
By 2021, as COVID ravaged global retail, Nexus made a contrarian move—accelerating acquisitions when valuations were depressed and sellers needed liquidity. The pandemic, rather than killing the thesis, validated it: Indians returned to malls faster than almost any other market, treating them as essential social infrastructure rather than mere shopping destinations.
IV. The REIT Transformation & Going Public (2022-2023)
November 2022 marked a watershed moment. Blackstone-sponsored Nexus Select Trust filed the draft paper with market regulator SEBI on Thursday to launch India's first public issue of retail REIT to raise around USD 500 million. Nexus Select Trust has filed the Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) and is looking to hit the capital market with India's first retail REIT (Real Estate Investment Trust) public issue in the first half of 2023 calendar year. The size of the initial public offer (IPO) of Nexus Select Trust REIT will be around USD 500 million.
The decision to go public wasn't just about raising capital—it was about democratizing access to institutional-grade retail real estate. At present, there are three listed REITs -- Embassy Office Parks REIT, Mindspace Business Parks REIT and Brookfield India Real Estate Trust -- on Indian stock exchanges but all these are of leased office assets. Nexus Select Trust will be the first REIT with rent-yielding retail real estate assets.
The IPO prospectus revealed the true scale of what had been built. Nexus Select Trust has a portfolio of 17 operational shopping malls across 14 major cities, covering about 10 million square feet area valued around USD 3 billion. In its portfolio of 10 million square feet of retail real estate, Nexus Select Trust has also included Select Citywalk mall in south Delhi. There are around 3,000 stores in its shopping malls while the number of brands are approximately 1,000.
May 2023 brought the moment of truth. The issue, which will open for subscription on May 9 and close on May 11, has been priced in the Rs 95-100 per unit band. The total offer is for Rs 3,200 crore and includes a fresh issue of Rs 1,400 crore and an offer for sale of up to Rs 1,800 crore from existing investors.
The IPO pricing reflected careful calibration—attractive enough to ensure strong subscription, yet preserving upside for long-term investors. Blackstone will launch the $391 million IPO of its Nexus Select Trust India mall platform on 9 May. INR 2.5 billion of the expected INR 13 billion in net proceeds from the IPO, after offering expenses, would go for debt servicing while INR 10.5 billion is earmarked for acquisitions and redemption of debt securities.
Post-IPO, the ownership structure evolved strategically. Blackstone's stake in Nexus will come down to 43 per cent from 59 per cent post the IPO, maintaining significant skin in the game while allowing public participation. This wasn't an exit—it was a transformation from private ownership to public stewardship.
V. Pandemic Crucible & Resilience (2020-2022)
The COVID-19 pandemic should have been the death knell for a retail-focused REIT. Lockdowns shuttered malls, footfalls evaporated, and e-commerce surged. Yet what happened next revealed the fundamental strength of the Nexus thesis.
Like other organised retail firm, Nexus Select Trust too was hit hard by the COVID-19 pandemic as malls were shut for a long period of time. But, as the pandemic has ebbed and consumer confidence has grown, retailers including Nexus are seeing a good rebound. Nexus Select Trust's net loss narrowed sharply to Rs 10.9 crore in the year ended March 2022 from around Rs 199 crore in 2020-21.
The recovery wasn't just about reopening—it was about reimagination. Nexus pioneered omnichannel strategies, enabling tenants to use mall spaces as fulfillment centers. Safety protocols weren't just implemented; they were marketed as differentiators. The company's "Safe Shopping" campaign transformed hygiene from necessity to competitive advantage.
More importantly, the pandemic accelerated premiumization. As Indians emerged from lockdowns, they didn't just return to malls—they returned with pent-up demand and accumulated savings. The revenge shopping phenomenon was particularly pronounced in Nexus properties, where affluent consumers sought experiences they'd been denied.
The leasing momentum during this period defied conventional wisdom. Nexus Select Trust has done leasing of around 3.5 million square feet over the last three years and three months. International brands that had paused expansion plans suddenly accelerated, recognizing that quality retail space in India was scarce and valuable.
VI. Building the Modern Consumption Platform (2023-Present)
The successful IPO in May 2023 marked not an end but a beginning. As India's first publicly listed retail REIT, Nexus became the benchmark for institutional-grade retail real estate in India. Nexus Select Trust is India's first publicly listed retail Real Estate Investment Trust (REIT) having Portfolio comprises 17 Grade A centers in India. Today, with 19 malls spread across 15 cities, Nexus has established a portfolio of approximately 10.6 million square feet of Grade A in the country.
The post-IPO strategy focused on three pillars: organic growth through same-store sales improvements, strategic acquisitions to expand the platform, and operational innovations to enhance the consumer experience. The company's focus shifted from mere rental income to creating "consumption ecosystems" where retail, dining, and entertainment converged seamlessly.
2024 brought significant developments. Blackstone-backed Nexus Select Trust, India's first retail REIT, is buying a shopping mall in the southern Indian city of Bengaluru for up to INR 8.77 billion ($104 million). A vehicle of BSE and NSE-listed Nexus is acquiring the Vega City Mall from local developer Blue Horizon Hotels Private Limited in an all-cash deal.
The Vega City Mall acquisition exemplified the evolved strategy: buying assets in high-growth micro-markets, particularly in tech-heavy cities where disposable incomes were rising fastest. With this Proposed Acquisition, Nexus Select Trust will consolidate its presence in Bengaluru and aim to benefit from embedded upside.
August 2024 marked another pivotal moment. Blackstone sold 330 million units in India's Nexus Select Trust for around INR 45.5 billion ($542 mil) through a block stock deal. Global investment firm Blackstone sold 330 million units in its REIT firm 'Nexus Select Trust' for around INR 45.5 billion ($542 million) through a block deal on stock exchanges on Friday, August 9. Prior to the transaction Blackstone held a 43 percent stake in Nexus Select Trust, India's first real estate investment trust (REIT) backed by retail properties, with the deal reducing that holding to 21 percent.
This partial exit wasn't a loss of faith—it was profit realization after successful value creation. Blackstone had transformed a fragmented portfolio into India's premier retail REIT, and the block deal at premium valuations validated the thesis.
VII. Operating Philosophy & Financial Engineering
The Nexus operating model represents a masterclass in balancing global standards with local execution. At its core lies a simple insight: Indian retail real estate isn't just about collecting rent—it's about creating destinations.
The revenue model extends beyond traditional lease rentals. The company pioneered revenue-sharing arrangements with anchor tenants, participated in percentage rents during peak seasons, and monetized common areas through events and activations. With over 1,000 local and international brands occupying nearly 2,900 stories in the Nexus portfolio, Blackstone predicts that net operating income will grow organically by 17.1 percent in the next three years. The weighted average term to lease expiry (WALE) for the portfolio was 5.7 years as of 31 December.
Financial engineering underpinned operational excellence. The REIT structure mandated 90% distribution of distributable income, creating predictable yield for investors. One of the main attractions of investing in a REIT is the fixed dividend income that investors receive every quarter. As per management commentary, Nexus REIT is expected to provide an 8.5% fixed dividend in FY23-24. This can be an attractive option for investors looking for steady income streams.
The company's approach to debt was particularly sophisticated. Rather than viewing leverage as merely a financing tool, Nexus structured debt to optimize tax efficiency while maintaining flexibility for acquisitions. The weighted average cost of debt was kept low through a mix of secured asset-level financing and corporate facilities.
Technology integration transformed operations. From AI-powered footfall analytics to predict tenant performance to IoT sensors optimizing energy consumption, Nexus brought Silicon Valley innovation to Indian malls. The company's proprietary mall management platform integrated everything from tenant billing to customer engagement, creating operational efficiencies that directly impacted the bottom line.
The human capital strategy proved equally crucial. Its senior management team consisting of nine CXOs (with 20+ years average experience) led by Dalip Sehgal (former executive director of Unilever India) as CEO is supported by over 500 employees. This wasn't just about headcount—it was about assembling a team that understood both real estate and retail, finance and fashion, technology and tenant relations.
VIII. Competitive Landscape & Market Dynamics
In India's retail REIT landscape, Nexus stands alone—literally. The Nexus Select Trust does not have any industry peers as on date of this Offer Document as there are no listed real estate investment trusts in the retail sector in India. This monopolistic position in public markets creates both opportunities and responsibilities.
The competitive dynamics play out differently than in office REITs. While Embassy Office Parks and Mindspace REIT compete for corporate tenants, Nexus competes with unorganized high-street retail, standalone malls owned by local developers, and increasingly, with e-commerce platforms seeking physical presence.
The moat isn't just about owning malls—it's about owning the right malls in the right locations with the right tenant mix. Citing statistics that show consumption accounting for nearly 60 percent of India's GDP in 2022 after growing by a compounded average rate of 10 percent from 2014 through 2021, Blackstone is pitching the mall REIT as an opportunity to profit from growing spending power. As the owner of India's largest consumption centre platform with a market-leading presence in 14 prominent cities across India, we believe our Portfolio is well-positioned to capitalize upon the consumption growth.
The emergence of omnichannel retail created unexpected opportunities. Rather than competing with e-commerce, Nexus malls became experience centers where online brands established physical presence. The D2C (direct-to-consumer) boom particularly benefited Nexus, as digital-first brands sought premium physical spaces to build credibility and customer touch-points.
International retailers' India strategy invariably runs through organized retail spaces like Nexus properties. Unlike China, where international brands could rely on sophisticated e-commerce infrastructure, India's complexity—multiple languages, varied payment preferences, logistical challenges—made physical presence essential. Nexus became the gateway for global brands entering India.
IX. ESG Integration & Sustainability Focus
Nexus Select Trust are working across 50+ ESG initiatives to create positive impact on people and the environment. This isn't mere corporate rhetoric—it's strategic differentiation in a market where international tenants increasingly demand sustainable spaces.
The sustainability initiatives span the spectrum: solar installations on mall rooftops, rainwater harvesting systems, waste management programs that achieve high recycling rates, and energy-efficient HVAC systems that reduce both costs and carbon footprint. These aren't just cost centers—they're value creators, reducing operational expenses while attracting ESG-conscious tenants and investors.
The social impact extends beyond environmental initiatives. Nexus malls employ thousands directly and enable tens of thousands of retail jobs indirectly. The company's skill development programs, particularly for retail staff, create employment pathways for India's youth. During COVID, when many retailers abandoned staff, Nexus worked with tenants to maintain employment, building long-term loyalty.
Governance structures reflect institutional standards. The board composition balances Blackstone nominees with independent directors bringing diverse expertise. The key board members are Michael Holland (ex-CEO of the Embassy REIT), Arjun Sharma (Chairman and Director of the Select Group), Jayesh Merchant (ex-CFO Asian Paints), Sadashiv Rao (Former Director of IDFC) and Tuhin Parikh (Head of BX India Real Estate).
X. Technology & Digital Transformation
The digital transformation of physical retail might seem oxymoronic, but Nexus proved otherwise. The company's technology stack rivals that of e-commerce platforms: customer analytics platforms that track shopping patterns, mobile apps that enable contactless experiences, and backend systems that optimize everything from parking to store operations.
The innovation extends to tenant services. Nexus provides retailers with data analytics that help optimize inventory, predict demand, and understand customer behavior. This data-as-a-service model creates stickiness beyond traditional landlord-tenant relationships.
The integration of entertainment technology transformed malls from shopping destinations to experience centers. Advanced projection mapping for events, AR/VR installations for customer engagement, and digital art installations made Nexus properties Instagram-worthy destinations—crucial for attracting younger consumers.
XI. Financial Performance & Investor Returns
The financial trajectory tells a story of resilience and growth. Despite pandemic disruptions, the company's recovery has been remarkable. The progression from losses during COVID to profitability demonstrates operational leverage inherent in the model.
The distribution yield story resonates with income-focused investors. In a low-interest-rate environment, the promised 8.5% distribution yield offers attractive risk-adjusted returns, particularly given the underlying real estate security. The distributions aren't just promises—they're mandated by REIT regulations, providing investor protection.
Capital allocation priorities reflect strategic discipline. The focus remains on three areas: debt optimization to reduce cost of capital, strategic acquisitions that are immediately accretive, and distributions that reward patient capital. The company explicitly avoided the temptation of aggressive expansion that could dilute returns.
The unit price performance since listing reflects market confidence in the India consumption story. While volatile in the short term, tracking broader market sentiments, the long-term trajectory aligns with India's GDP growth and consumption expansion.
XII. Future Growth Vectors & Strategic Options
The growth roadmap extends beyond traditional mall expansion. Mixed-use development represents a significant opportunity—integrating office spaces, hotels, and residential components with retail creates captive consumers and diversified revenue streams. It also owns two complementary hotel assets (354 keys), and three office assets of 1.3 million square feet as of December 31, 2022.
Geographic expansion focuses on emerging consumption centers. Officials said it will continue to seek acquisition opportunities, and large consumption centres like state capitals will be among the focus areas for growth. Tier-2 cities, often overlooked by institutional capital, offer attractive yields as consumption patterns evolve.
The platform strategy evolves beyond physical assets. Nexus contemplates launching a retail-focused venture capital arm, investing in D2C brands that could become future tenants. This ecosystem approach—landlord, investor, and enabler—creates multiple value capture opportunities.
International expansion, while not immediate, remains a long-term possibility. The expertise in managing retail assets in complex emerging markets could translate to Southeast Asia or the Middle East, where similar consumption dynamics are playing out.
XIII. Risks & Mitigation Strategies
The bear case can't be ignored. E-commerce penetration, while currently low in India, will inevitably increase. Changing consumer preferences, particularly among Gen Z, could reduce mall relevance. Economic slowdowns disproportionately impact discretionary retail spending.
Regulatory risks exist around REIT structures and foreign ownership. Changes in tax treatment of REITs or restrictions on foreign investment could impact valuations. The company's high foreign ownership through Blackstone creates vulnerability to policy changes.
Concentration risks persist despite portfolio diversification. The top five properties contribute disproportionately to revenues. Geographic concentration in tier-1 cities exposes the portfolio to localized economic shocks.
The mitigation strategies reflect thoughtful risk management. Diversification across geographies and tenant categories reduces concentration risk. Long-term leases with built-in escalations provide revenue visibility. The focus on experiential retail—categories that can't be replicated online—creates defensive positioning.
XIV. The Investment Thesis Synthesized
The Nexus Select Trust story transcends traditional real estate investment. It's a play on India's consumption growth, urbanization trends, and the premiumization of retail. The REIT structure provides tax efficiency and mandatory distributions, creating predictable yields in an unpredictable world.
For institutional investors, Nexus offers exposure to Indian consumption without the complexity of operating businesses. The asset-heavy model provides downside protection through real estate values, while the operating leverage offers upside during consumption booms.
Retail investors find in Nexus an opportunity to own institutional-grade real estate at fractional costs. The regular distributions provide income comparable to fixed deposits but with potential capital appreciation. The liquidity of listed units offers flexibility that direct real estate investment can't match.
The strategic value extends beyond financial returns. Nexus represents infrastructure for India's consumption economy. As India adds hundreds of millions to its middle class, as global brands expand in India, as experiences become the new luxury, Nexus malls become increasingly valuable—not just as real estate, but as platforms for consumption, community, and culture.
XV. Recent Developments & Looking Forward
The latest strategic moves signal continued evolution. The August 2024 stake sale by Blackstone, while reducing sponsor ownership, actually strengthens the institutional story—proving that the REIT can stand independently, attracting diverse institutional capital.
The acquisition pipeline remains robust. With significant debt capacity and access to capital markets, Nexus can opportunistically acquire assets when valuations are attractive. The focus isn't on growth for growth's sake but on accretive acquisitions that enhance portfolio quality.
Operational innovations continue. The company experiments with new formats: smaller urban centers in dense neighborhoods, entertainment-focused properties targeting younger demographics, and mixed-use developments that blur lines between retail, office, and hospitality.
The macro tailwinds remain strong. India's per capita income crossing $2,500 historically triggers consumption explosions. The demographic dividend—hundreds of millions entering peak consumption years—provides multi-decade growth visibility. The formalization of retail, accelerated by GST and digital payments, benefits organized players like Nexus.
XVI. Lessons for Investors & Operators
The Nexus story offers lessons that transcend real estate. First, timing matters less than structural trends. Blackstone entered Indian retail when pessimism was high but structural factors were favorable. Patient capital that can wait for trends to materialize often generates outsized returns.
Second, operational excellence trumps financial engineering. While the REIT structure provided tax efficiency, the real value creation came from professional management, tenant curation, and customer experience enhancement. Financial innovation without operational excellence rarely sustains.
Third, local knowledge with global standards creates competitive advantage. Nexus succeeded by combining Blackstone's institutional practices with deep understanding of Indian consumers. Neither pure global players nor pure local players could have built what Nexus created.
Fourth, democratization of institutional assets creates value for all stakeholders. The REIT structure allowed retail investors to participate in institutional-grade real estate, while providing Blackstone with partial liquidity and permanent capital. This alignment of interests across stakeholder groups creates sustainable value creation.
Finally, the consumption economy rewards those who understand that shopping is about more than transactions. In emerging markets particularly, retail spaces serve social, cultural, and aspirational needs beyond mere commerce. Companies that recognize and cater to these broader needs capture disproportionate value.
The Nexus Select Trust journey from Blackstone's vision to India's premier retail REIT demonstrates that in emerging markets, yesterday's challenges often become tomorrow's opportunities. As India writes its consumption story over the coming decades, Nexus has positioned itself not just as a beneficiary but as an enabler of this transformation. For investors seeking exposure to India's consumption boom with the safety of real estate backing and the predictability of REIT distributions, Nexus offers a compelling proposition—one mall, one tenant, one consumer at a time.
StockTwits
Spotify
Apple Podcasts
Amazon Music
Audible
YouTube
Castbox
Pocket Casts