Mega deal: PE Xander, APG to invest $450 mn in Indian retail realty
A joint venture of global private equity Xander and APG Asset Management has acquired an initial portfolio of 3 retail assets from the PE sponsored fund in a transaction valued at Rs 2,000 crore (USD 300 million), making it one of the largest deals in retail real estate space.
Virtuous Retail South Asia (VRSA) is a joint venture fund formed by Dutch pension fund asset manager APG and Virtuous Retail, sponsored by global private equity player Xander Group.
The JV firm has also committed an acquisition capital of USD 150 million, a joint statement by the firms said.
“In the largest single deal in the retail real estate sector in India, Dutch pension fund asset manager APG Asset Management and Virtuous Retail, sponsored by Xander Group have partnered to form a joint venture that has acquired an initial portfolio of 3 retail assets from a Xander sponsored fund in a transaction valued at Rs 2,000 crore,” it said.
The initial portfolio comprises 3.5 million square feet across three flagship centres developed by Virtuous Retail (VR) in Bengaluru, Surat and Chennai that will continue to operate under the VR flag, it said.
APG has invested 77 per cent of the equity for a majority shareholding in the joint venture. Xander has invested the balance 23 per cent.
The joint venture has also integrated VR’s 150-strong management and operational team in India.
Headquartered in Singapore, Virtuous Retail South Asia will be the partners’ exclusive, integrated retail mall developer, owner, operator and asset manager for India.
The two partners will have equal representation on the board of the new company which will be chaired by Sid Yog, the founder of Virtous Retail, the statement said.
“Simultaneously, APG and Xander have committed an additional USD 150 million as equity capital giving the new company investment capacity of USD 300 million that will be used to expand the portfolio through new acquisitions and greenfield development,” APG Asset Management Managing Director & Head of Private Real Estate Investments for Asia-Pacific Sachin Doshi said.
With the arrival and expansion of major global and domestic brands, coupled with the severe shortage of high quality malls, we believe organised retail is in early stages of take-off in the country, he said.
Adding that it a landmark transaction for Indian retail real estate at a time when the sector is at an inflection point.
“This transaction allows us to get immediate scale and access to a portfolio of dominant shopping centres and management capability through the integration of VR’s Indian management and operating platform into Virtuous Retail South Asia,” he said.
Rohit George, who was responsible for overseeing Xander’s retail portfolio in India, has relocated to Singapore.
He joined Virtuous Retail South Asia as Managing Director and an executive director on the board, the statement said.
The company will leverage its now decade old capabilities across the value chain of development, ownership and operations to grow its national portfolio of dominant retail-anchored lifestyle projects by adding centres in key markets.