Phoenix Mills to acquire over 60-per cent stake in United Malls
03 December 2007
Phoenix Mills Ltd, which in October had decided to invest in Big Apple Real Estate Pvt Ltd, the owners of the United Malls brand, has announced its intention to acquire a majority equity stake of over 60 per cent in Big Apple. The stake is being acquired through the swap of Phoenix''s stake in its Agra project into Big Apple and through an infusion of around Rs80 crore million as fresh capital.
This acquisition is in line with the Phoenix''s strategy to become the largest developer of mixed-use retail led centres in India. Creating valuable partnerships with developers such as Big Apple enables Phoenix to further extend its presence across the nation and fortify its position as the leading retail centric mixed-use format player in the country.
Big Apple plans to build retail malls across north India, particularly in Uttar Pradesh covering, among others Lucknow, Agra, Bareilly and Varanasi. The funds infused by Phoenix are likely to be deployed across Big Apple''s projects in Meerut, building the second large mall in Lucknow, and to move forward with the plans for Gorakhpur, Allahabad, Kanpur and Dehra Dun.
Big Apple has commenced construction of its Lucknow project and is in final stages of commencing construction of the Agra project. Funding for these projects has been secured by partnering with global as well as Indian private equity players including Kshitij Real Estate Fund, Yatra Capital and Edelweiss Real Estate Fund. While Bareilly and Varanasi projects are at a MoU stage the other ventures are under planning and land acquisition phase.
Big Apple''s Lucknow project alms to be the first of its kind in the state, offering a "one stop" destination for shopping, entertainment and dining. It will comprise departmental home stores, a multiplex, food court, family entertainment centre, a luxury hotel, hypermarket, restaurants and small format retail stores. The project is being overseen by P G Patki & Associates.
The investment in and partnership with Big Apple is aligned to Phoenix''s plans to establish long-term relationships with leading pan India and regional developers with the objective of achieving a formidable cross-country footprint as the leading retail led mixed format player over the next three years.
The transaction has been approved by Phoenix''s Board and is subject to the necessary statutory, shareholder and regulatory approvals and due diligence.
Commenting on the development, Mahesh lyer, CFO, Phoenix Mills Ltd, "The investment into Big Apple is in line with our objective of stretching our retail canvas across the length and breadth of the country. Uttar Pradesh has a huge potential, and given the operating dynamics in that state, we believe that a relationship with a forward thinking partner in Big Apple will help us realize our goals in the most effective manner. We expect the mall in Lucknow to open in shortly, following which we expect to operationalise the Agra Market City a few months down the line."