Nexus Select expects to post 9% growth in net operating income in FY25

May 10, 2024

Blackstone-sponsored Nexus Select Trust is poised to report 9 per cent growth in its net operating income (NOI) and 9-10 per cent higher distribution in FY25 as it exceeded its targets for FY24 on several parameters.

The mall-focused real estate investment trust reported NOI of ₹416.6 crore in Q4 FY24, up 13 per cent year-on-year (y-o-y) and tenant sales rose 9 per cent at ₹2800 crore on strong leasing and consumption momentum. Its distribution at ₹2.09 per unit was higher than the guidance and for the full year it was ₹7.08 per unit.

The NOI for FY24 was ₹1610 crore, in line with guidance while tenant sales rose 13 per cent on year to ₹12,000 crore.

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The REIT leased 2.6 lakh square feet across 181 deals in the quarter and occupancy at 97.6 per cent improved 130 bps from year ago.

The trust said it is at an advanced stage to buy three grade-A malls in Hyderabad at a total enterprise value of ₹1,000 crore, adding that the malls had a stabilised NOI of ₹100 crore. The acquisition would be at 10 per cent stabilised cap rate, it said.

The funding would be done entirely through debt.

FY25 Guidance

The robust leasing and consumption trends have prompted the REIT to raise its guidance for FY25. It expects NOI at ₹1,760 crore with retail occupancy rising to over 98 per cent. Distribution per unit is expected in the range ₹8.7-8.8. These projections do not take into account the acquisition of three malls which it is very close to concluding.

R-leasing spreads however are expected to be lower this year at 20 pr cent, compared to 21 per cent that it achieved on 8 lakh square feet last year.

It leased 11 lakh square feet in FY24.

Mor than 85 new brands leased space in its malls, and they included Pret A Manger, Ancestry, Apple, and H&M Home.

Next Select Trust’s share closed 0.24 per cent lower at ₹132.90 on the BSE on Thursday.

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