Ladies and gentlemen, good day, and welcome to the Q3 and nine-month FY 2026 results conference call of The Phoenix Mills Limited. As a reminder, all participant line will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchtone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shishir Shrivastava. Thank you, and over to you, sir.
Thank you, Danish. Good morning, everyone, and thank you for joining us today. It's a pleasure to connect with you again. During quarter 3 FY 2026 across retail, offices, hospitality, and residential, we saw strong festive demand and consistent execution. Consolidated revenue for the quarter stood at INR 1,121 crore, an increase of 15% year-on-year, while consolidated EBITDA grew by 19% year-on-year to INR 656 crore, underscoring the operating leverage in our platform. Retail delivered robust consumption growth of 25% year-on-year during the festive quarter, driven by a broad-based demand across categories. In offices, we completed approximately 1.2 million sq ft of gross leasing year to date, corresponding to nearly 25% of our portfolio, with a healthy pipeline of advanced stage discussions.
Our hospitality business benefited from strong occupancies and re-rate-led growth, while residential sales and collections continued to progress steadily on a year-to-date basis. Alongside this operating momentum, we continue to maintain a prudent and flexible balance sheet, supported by strong operating cash flows and disciplined capital allocation. This has enabled us to fund our ongoing CapEx and the ISML partner buyout, primarily through equity, while keeping overall leverage at prudent levels. Our performance for the third quarter and the first nine months of FY 2026 reflect the consistency of execution across our platform and the quality of growth we are delivering.
The strength of our model lies not only in scale, but in the productivity of our assets, capital efficiency, and the resilience of our financial position. Even as parts of our portfolio undergo active transformation, the underlying business continues to compound, supported by resilient demand and disciplined execution across our portfolio. I will now hand the call over to Ms. Rashmi Sen to take you through the performance of our retail portfolio in greater detail. Rashmi, over to you.
Thank you, Shishir. Good morning, everyone. Phoenix Retail continues to set new standards through innovations, upgrades, new launches, and meticulous brand creation. As you all know, we are upgrading our Phoenix Marketcity centers and premiumizing the brand mix by launching flagship formats, marquee brands, and differentiated concepts to further strengthen these centers. A key thrust in scaling experiential and F&B ecosystems, which ensure that our assets function as full-day social consumption and destination hubs. In parallel, we remain deeply focused enhancing retailer productivity through carefully curated category mix and focused marketing initiatives. Above all, we continue to have a steadfast emphasis on enhancing profitability, driven by consistent rental growth and operating efficiencies. In Q3 FY 2026, consumption grew by 25% at INR 4,992 crore, with strong momentum across all categories.
Rental income grew by 13% year-on-year to INR 573 crores, while EBITDA increased 16% to INR 585 crores, underscoring the operating leverage in our portfolio. For the first nine months of FY 2026, retailer sales reached INR 12,326 crores, marking a year-on-year growth of 17%. To put this in context, our full year consumption for FY 2025 was INR 13,750 crores, and in the first nine months of FY 2026, we've already approached that level, despite no new mall additions and with large parts of flagship Phoenix Marketcity centers under repositioning and upgrades. This highlights the underlying productivity uplift across the retail portfolio. Moving to consumption trends. Consumption performance during the quarter was broad-based, with growth driven not just by the festive demand, but also by improved tenant mix and higher dwell times.
Within the mall portfolio, growth was led by Phoenix Mall of Asia, Bengaluru, which saw a 112% increase in consumption, supported by 22% growth at Phoenix Palladium, Mumbai, Phoenix Palassio, Lucknow, and 25% growth at Phoenix Mall of the Millennium, Pune. All other centers as well reported a positive mid-teens consumption growth. From a category perspective, fashion and accessories grew 16% year-on-year, while family and entertainment and multiplexes were up by 19% on the back of strong film releases during the quarter. F&B grew by over 11% as well, while jewelry was up by 39%.... This diversified performance reflects sustained consumer demand and the continued confidence of leading brands in the Phoenix platform. Moving to brand curation and leasing momentum.
Turning to our retail partnerships, our premium positioning continues to attract marquee brands, and as a result, we continue to deepen our partnerships with leading global and domestic brands, particularly in categories that are driving higher trading density and rental yield for us. Phoenix Mall of Asia, in particular, has emerged as a preferred launch destination, with notable openings, including South India's first Apple Store, the largest Lego store in South India, Onitsuka Tiger's first concept store in India, and several others. We remain focused on improving portfolio productivity through a more curated retail mix, including right-sizing, planned brand refresh, and selective upgrades. We are also introducing premium, high-performing brands across key categories such as fashion, jewelry, athleisure, watches, beauty, and F&B, which is beginning to reflect in better productivity metrics.
A direct reflection of the churn and brand refresh can be seen in the notable improvement in trading densities at both PMC Bangalore and PMC Pune. At Phoenix Marketcity, Bangalore, trading density grew to INR 3,011 PSPM for nine months FY 2026, by 23% year-on-year. With nearly 80% of the planned transformation already executed, trading density levels at this center are now approaching those of Phoenix Palladium, Mumbai, which have been about 3,400-3,500 PSPM between FY 2023 and 2025. Similarly, PMC Pune recorded a 14% increase to INR 2,214 PSPM, with 19% of its GLA under transformation and over a third of new brands already operational. These results demonstrate immediate value unlocked through our asset upgrading initiatives. Beyond retail, we are integrating active life-lifestyle elements into our malls.
A key example is the Phoenix Racquet Club, launched in December 2025 at Phoenix Palladium, Mumbai. Located on top of the mall, the facility integrates padel and pickleball courts with open-air café and community spaces, creating a lifestyle-led, community-driven destination with a luxury retail environment. In just its first month of operations, the Racquet Club welcomed over 1,000 customers, attracted sponsorships, and generated approximately INR 50 lakh in revenue, while also meaningfully increasing engagement and repeat visits at the center. Our expanded F&B ecosystem, comprising cafes, restaurants, dining concepts, continues to act as a powerful catalyst for engagement. Our Gourmet Village at Phoenix Palladium, a two-level dining and entertainment destination launched last year, has validated this model by increasing repeat visits, lengthening dwell times, and boosting same-store sales growth across the center.
Having proven the concept, Gourmet Village now serves as our blueprint for similar rollouts across Phoenix portfolio, especially Phoenix Palassio, PMC Pune, PMC Mumbai, and PMC Bangalore. Alongside growth, we maintained a strong focus on capital and cost efficiency, with marketing and energy costs serving as key levers for improving asset level returns. One such is example in the reduction of our retail marketing spend by 15% during Q3 FY 2026. We achieved this by pivoting towards high-impact targeting initiatives and deeper collaboration with our brand partners. By shifting to sponsored activations such as Coach Christmas, Armani's Diwali decor at Phoenix Palladium, sharper targeting of high-performing brands, and leveraging influencer-led, hyperlocal strategies, we have proven that we can do more with less. Despite the leaner spends, we saw positive footfalls, delivered higher consumption growth, and meaningfully scaled revenue share income.
Our marketing is not just cost-efficient, but materially more effective at driving both engagement and monetization. We've also made meaningful progress on sustainability and cost efficiency. Renewable energy now accounts for 30% of our retail energy requirements for common area and HVAC, up from 20% during Q3 last year. We are currently in advanced discussions with multiple renewable energy providers to further scale adoption across the portfolio.
Looking ahead, we continue to see good visibility for double-digit growth across our retail portfolio in FY 2026, supported by strong consumer demand trends, healthy retailer performance, and ongoing portfolio enhancement. With a significant portion of our portfolio coming up for renewal over the next 5 years, major expansions across our existing Phoenix assets, and a secure launch pipeline through 2030, we are well positioned for sustained value creation through disciplined execution, leasing, and productivity enhancement. I will now hand the call over to Varun to take you through the next set of highlights.
Thank you, Rashmi. Turning to offices, our focus continues to be on building a differentiated, high-quality portfolio that complements our mixed-use developments. We are prioritizing well-designed, sustainable workplaces that benefit from being embedded within an active retail and lifestyle ecosystem. Over the last two years, this strategy has resulted in a significant expansion of our office platform. From a base of around 2 million sq ft across two cities in 2023, we have scaled now to nearly 5 million sq ft of completed office spaces across four cities today. In fact, during this year, in Pune, we received occupation certificates for the entire Millennium Towers complex. We also achieved the prestigious USGBC LEED Platinum certification in November 2025 for Millennium Towers in Pune.
In fact, as a key strategy of our sustainability initiatives, all our new office developments are USGBC LEED certified, reflecting our emphasis on sustainability and long-term asset quality. Leasing activity for offices through the year has been very healthy and increasing. By December 2025, we have achieved nearly 1.2 million sq ft of gross leasing across our office assets in Mumbai, Pune, Bengaluru and Chennai. Occupancy at our stabilized assets in Mumbai and Pune increased to 76% from 67% at the end of March 2025, and in our recently completed developments across Pune, Bengaluru and Chennai, lease occupancy now stands at about 41%, with advanced lease discussions providing good visibility for continued ramp-up across this portfolio.
For the first nine months of FY 2026, our operational office portfolio, comprising of our assets in Mumbai and in Viman Nagar, Pune, generated income of INR 162 crore, with EBITDA coming in at INR 103 crore. With the leasing progress achieved during the year, the office portfolio is now entering the transition from a build and lease phase into a rental monetization phase, with newer assets expected to begin contributing meaningfully to earnings and cash flows from FY 2027 onwards. Turning to our hotels portfolio, the business delivered a strong performance during the period, despite tough macroeconomic sentiments. For the first nine months, income stood at INR 423 crore, reflecting an 8% year-on-year increase, while EBITDA meaningfully grew much ahead of revenue at 16%, and reached INR 190 crore.
Our EBITDA margins for the two hotels were very healthy at 45%, with an improvement of 300 and 300 basis points over the same period last year. The St. Regis Mumbai drove this EBITDA improvement, operating at a healthy 85% occupancy for nine months of financial year 2026, with average room rates crossing INR 20,000, up 8% year-on-year. Growth was driven by a deliberate shift towards higher-yielding segments, such as retail-led demand and celebrations, strong performance in events and F&B, and a continued focus on experience-led differentiation. This reinforced the role of our hotels as yield-enhancing extensions of our mixed-use ecosystem. Courtyard by Marriott Agra delivered a resilient performance despite the softer city environment, maintaining strong occupancies and market share during the peak season. I will now hand the call over to Kailash to walk you through our residential portfolio highlights and broader financial results.
Thank you, Varun. Let me brief on the residential piece. In the residential business, our sales and collections momentum sustained in the first nine months. Gross booking for the first nine months were around INR 412 crore. Revenue recognized for the nine months is only INR 273 crore, so essentially INR 180 crore is likely to be booked in Q4, subject to the registration and other documentation completion. This is primarily led by One Bangalore West and the Kessaku. Pricing was in excess of around 29,000 per sq ft, led by the strong demand in the market. This performance reflects continued end-user demand for premium, well-located residential development, and the strength of our differentiating product offering, even in the selective market environment.
On a financial overview, at a group level, revenue from operation for the quarter stood at INR 1,121 crore, representing a 15% year-on-year increase, while EBITDA grew by 19% to INR 656 crore. Net profit for the quarter was INR 276 crore, up by 4% year-on-year basis. Operating cash flow after working capital and taxes and interest stood at INR 1,508 crore for the nine months, an increase of 24% year-on-year basis. Operating cash flow from our core businesses, excluding residential, was INR 1,333 crore, up by 14% over the same period last year. Capital expenditure towards construction and ongoing projects during the first nine months amounting to INR 722 crore. Moving to on the update on CPP transaction.
So, this transaction, which we have announced in July 2025, and then post that, we have received necessary approvals and some CP conditions. So first tranche payment has been made for INR 1,257 crore in November 2025. With this, PML stake in ISML stand at now 58.33%, up from a 51% earlier. Our balance sheet positions remain prudent. Gross debt at 31st December stood at INR 5,200 crore, with overall liquidity improving to INR 1,858 crore. The net debt as on 31st December was INR 3,344 crore. Net debt to annualized EBITDA remained at a healthy 1.3x. During the period, we also reduced our average cost of debt from 7.68% to 7.62% in December 2025.
Sustained operating cash flow, a prudent balance sheet, and a disciplined capital allocation framework provide us the flexibility to continue investing in high quality assets while maintaining strong cash, strong credit metrics, and balance sheet flexibility. As we move forward, our focus remain on disciplined execution and productivity across the portfolio. And converting the scale we have built into sustained earning and cash flow growth. We can move to the Q&A now.
Hi, we can commence with the Q&A now.
Thank you so much. Ladies and gentlemen, we'll begin with the question and answer session. Anyone who wishes to ask a question, may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question comes from the line of Puneet from HSBC Bank. Please go ahead.
Yeah, thank you so much, and, congratulations on great performance on the retail piece. Can you talk a bit about what's happening in Mall of Asia? Consumption level numbers off the charts, but rents still lagging, and it looks like it's much low. You're still at 88% occupancy. How should one think about the potential for growth on the rentals for this part of the portfolio?
Hi, Puneet. Thank you so much for your question. Yes, I think Mall of Asia's performance has been phenomenal. We launched a mall in October 2023, and from there to today, it has nearly leased, reached the levels that we see in Phoenix Palladium. We have seen several first-time global brands that have opened their stores at Phoenix Mall of Asia, within our portfolio itself. I will hand the call over to Rashmi now, to share some key highlights on the type of brand mix that we have seen and the upcoming new retailers that are expected to open up in Phoenix Mall of Asia going forward.
So Mall of Asia has been seeing a great trajectory. It's built up as a destination center really fast. I think all factors have contributed to the exponential success of the center that we are seeing. Bengaluru, as a city, has been thriving. It's a great location. When we acquired that land parcel, we knew that this is the location where we have to build the Mall of Asia. The architecture and interior that we've done for the center, I mean, the response that we received from the city, from the retailers who visit across the globe, they rate it as one of the best centers that they are seeing in recent times that has been built up. But above all, I think it's always the tenant mix.
I think the tenant mix that we've achieved at that center is extraordinary, and we keep adding to that extraordinary tenant mix. In the recent times, we've opened the flagship store of Apple, Rolex, Onitsuka, several other BTL brands that have opened over the last six months. Not only that, we'll continue to see a lot of marquee brand openings over the next three to four months as well. So this center continues to be on a great growth trajectory going forward. We've seen a very positive rental growth trend as the center, along with consumption, and we'll see a lot more of it in the coming quarters as well.
In fact, Puneet, just putting some numbers for the benefit of everyone on the call. Consumption at Phoenix Mall of Asia reached INR 732 crore for the third quarter, and it is up 112%, year-on-year. While renter also has grown by 58%, and quarterly renter for this asset is INR 62 crore. In fact, occupancy right now is at 88%, and typically you would see for the rest of our portfolio, all new malls are, you know, at 95% or, you know, thereabout in those trading levels. And even in even in Phoenix Mall of Asia, you know, in the coming next two quarters, we are going to see occupancy stabilize at the 94%-95% levels going forward. We are hopeful that the consumption performance should continue going forward as well.
So, there, if I look at consumption, it is just about 7% lower than High Street Phoenix Palladium, but rent, rental income is almost half, right? I mean, do you think it can trend towards the same as High Street Palladium, or do you think structurally it will remain lower there?
I think structurally, Puneet, you have to look at consumption and rent trajectory converging over a three to five-year period. So, there are times when, you know, when we start off with a particular renter contract, the fixed rent kicks in immediately, whereas brands, consumption takes time, to scale up. In Phoenix Mall of Asia, the rents, of course, started very strongly in the first year. We were nearly at 160 crore of annual rental last year, and this year also, we are seeing rents growing strongly. Now, consumption for many of these brands is scaling up, sharply, and we will see rents also align with this rising consumption growth in the coming quarters.
Okay. Secondly, Rashmi, on the broad portfolio, you know, you've clearly outperformed the rest of the market on the retail side, and all the retailer numbers were quite poor, and you guys have done extremely well. If you can talk a bit more about it, how much of it has to do with footfall versus value growth?
So that's a good question. So firstly, a lot of our retail partners tell us that their performance in our portfolio is an outlier, even though at a broad category, you know, level for them, the numbers may look very different. And, if you look at the flagship stores across all the listed retailers we have, all of them have shown remarkable double-digit growth. So that was talking about the, you know, listed retailers. Secondly, we are seeing that growth has been spread across all categories. So whether we talk about the fashion category, gold, jewelry category, we, you know, you talk about electronics.
Also, I think the other parameter, which has added to exponential growth this quarter, one is the festive season, of course. You see a sharp growth in numbers in Q3, which has the Diwali and Christmas festivities. You see this every year in our portfolio and generally in the market. What has further added to the growth is the strong repositioning that we've been doing in our centers, whereby we have churned out a lot of low-performing categories. For example, you know, some of the malls where we had hypermarkets, which were, you know, very large, 30,000, 60,000 sq ft.
And, the trends has changed towards shopping at such large hypermarkets. And churning them and converting them into high trading, department stores, or converting part of that area into high trading inline flagship stores, that has, impacted the overall trading as well. And, further, we've had a lot of, new marquee brands opening across our portfolio, this quarter. And, some of those individual brands have also done remarkably well, adding to the growth further.
Okay. This is across the portfolio, right? I mean, even the, your older
Across the portfolio.
Chennai, Kolkata. Okay.
Across the portfolio.
Okay. Next is on, you know
Because if you see our repositioning efforts in, you know
Yeah
we've already, we are halfway through the asset upgrades at the Phoenix Marketcity, Mumbai and Phoenix Marketcity, Pune, and some of the other centers as well. We have opened the Gourmet Village here, which is a F&B destination at Phoenix Palladium, and this is a very successful concept. While now we are taking this concept to other centers, but in some small ways, we have started making F&B changes across all our malls and marquee F&B brands coming in. So we are seeing the impact of that F&B change also across all our malls. In terms of marketing, strategies and marketing plans, we've really been evolving.
We have an excellent marketing team, and there are a lot of things we've been experimenting with on our marketing side, and we see a huge impact on the consumption side on account of the marketing initiatives we've taken. We are constantly focused on increasing the consumption of our brands, and all activities and activations we do are in that direction. And, so, you know, the inputs and our strategies are resulting in those outcomes.
Understood. That's, that's very helpful. And, and secondly, you know, Varun, if you can talk about where are we in terms of launching, you know, Kolkata Residential, and, and what is the plan for Thane now?
So, Puneet, on Thane, we have planned a retail-led, mixed-use development. We acquired this land parcel, you know, back towards the end of 2023, November 2023. And from then to now, we have planned a, and I would call it a fabulous mixed-use district here, with a destination retail mall, with an area of approximately 1.3-1.5 million sq ft in terms of leasable area. Office tower, a Grade A office tower for the growing district of Thane and the huge commercial demand that we are seeing emerging there. And, you know, luxury, event-centric
Sorry, how big office?
Offices right now, Puneet, they are between 500,000 sq ft-1,000,000 sq ft. The overall FSI potential for Thane is in excess of 4 million sq ft. So we are, you know, optimizing what we can add and maximize in terms of the FSI consumption here, in Thane, without compromising on the experience that each user will experience when they come to this mixed-use platform.
Okay. Okay.
In fact, if I just add on, on Thane, Puneet, we are right now in the final stages of obtaining, securing our approvals. We have, you know, we are awaiting the environmental clearance, and we, at the moment, have commenced, you know, demolition activities of the old existing structures on the Thane site. And in the next two or three months, we also expect to commence excavation and, the subsequent construction activities. Tenders are already out for excavation, and we are also, you know, very soon going to be launching the tenders for the civil contract for constructing the, entire development at one go.
Okay. That's helpful. Thank you so much. Kolkata, when should you expect the launch?
Kolkata residential, I think we are in the final stages of approvals, as well as design fine-tuning. I think, in the coming 2 quarters, you know, we'll come back and update you on the launch timeline of Kolkata.
Okay. That's very helpful. Thank you so much, and all the best.
Thank you. Our next question comes from the line of Pritesh from Axis Capital. Please go ahead.
Yeah, yeah. Just thank you for the opportunity. So just carrying forward the previous conversation on lag in consumption and revenue that we are seeing in most of the assets. And in fact, if I, you know, look at rent to consumption ratio, it's 11%, this quarter, which was—I think it's, this is lowest since we have seen in 2014. So if you can explain me, you know, what's happening here. You talked about, you know, eventually it converges, but does everything get converged? Because I understand, you know, jewelry brands, you know, everyone might not be at MG plus variable. So you can correct me if I'm wrong. So just some insights and thoughts on that.
Sure, Pritesh. Varun this side. Let me, you know, take this question. One, Pritesh, I think the consumption growth during the quarter was very strong, and like Rashmi mentioned in her comments, all categories contributed to the strong consumption growth, including fashion, where we combine a number of, categories, and it accounts for 50% of our consumption area. We, in fact, saw strong 16% growth in consumption. And if I especially exclude the high trading density categories, like gold, jewelry, and electronics, the underlying growth is, in very high double digits, and this is in fact the strongest, growth that we have seen, per se, in the portfolio over the last five years. Rents, per se, at times are an aligning factor.
The, you know, consumption. We see rent growth happening when we enter into new contracts and the retailers start paying the fixed rent from day one, while their consumption scales up. Over the last two years, we have had very strong growth, and as we had indicated also earlier, you know, during this year, rent growth has sequentially improved as we have opened up new stores and revenue share has. Brands have crossed the revenue threshold and started contributing to revenue share.
Sure. So how much time, you-
I think in between from quarter to quarter, and especially quarter three, if you see, quarter three is a quarter with, you know, more emphasis on high trading density categories such as gold, jewelry, et cetera. And consumption versus rent on in quarter three, per se, historically, has also been a bit of a divergence. But when you annualize it, consumption and rental growth is actually, you know, very near to each other over a three-year period.
Sure. Sure. Got it. Fair enough. And the second on this, you know, trading occupancy ramp up at Marketcity, Pune, and Bengaluru. By when do you think we should be back at 95%, considering these are already, like, well leased out? So a quarter or from here, couple of quarters, you know, some timelines, if you want to attach to that.
Absolutely, Pritesh. I think, we are on track to cross 90%, trading occupancy in both Bangalore and Pune by March 2026, in line with our original timelines. And we have a lineup of some great, first-time brands that are entering the city for... such as, you know, IKEA, Uniqlo, et cetera, that are opening their first stores in the city of Pune. And Bangalore will also have a similar trajectory. I think you should expect to see the 95% levels by, the middle of, you know, by the, middle of, FY 2027. In fact, 10% of overall area is already under fit-out at this point in time. So in a staggered way, we will see the, launches happening in the next 3-6 months.
Sure. That's helpful. I have a couple of more, but I'll jump back in queue and take it later. Thank you. All the best.
Thank you so much. Our next question come from the line of Murtuza Arsiwala from Kotak Securities. Please go ahead.
Yeah. Hi, Varun. Just to delve deeper into this, lead lag between, you know, the consumption growth and the rental growth. Can one attribute it entirely to the mix that kind of changes, plus the fact that you could have some malls in a ramp-up phase, and therefore, you know, there are minimum guarantees, so we don't see a good correlation between consumption growth and rental growth? And just to understand that better, let's say, you know, you have a certain amount of consumption growth on a quarterly basis, is it that a strong consumption growth on a mature mall would reflect in better rentals in a subsequent quarter?
Like, is there a one quarter reset, or it's a straightforward percentage of consumption, so it's almost instant set of repricing? So, you know, that's the first question I just wanna understand, because it's obviously been coming up a couple of times in terms of, you know, consumption growths ahead of rental growth and vice versa. So just want to understand that, and then I have another one on the commercial piece.
Right. So I think, thank you, Murtuza, for that, and I will just take a step back to also address this question as well, and bring out one of the points that, Rashmi spoke about earlier in her opening remarks. But, probably we need to dive a bit more deeper, on that aspect. I think, first of all, strong consumption growth is very important in terms of getting the right set of brands to come to the mall. So the mix of both the experience factors that we drive through our marketing events and our fine dining, destinations that we open up, as well as the entertainment centers that drive, this sticky footfall, as well as in terms of the high trading necessary categories and the new upcoming fashion categories that one opens up at the mall.
Now, strong consumption growth gives a great platform for our leasing teams to attract the right set of new brands to take you know space in the mall at better rentals or improved you know improved revenue share percentages. Across our mall portfolio today, we have, in the next three years, over 50% of the area is going to be up for renewals and repricing. That provides a great opportunity for us to reorient some of the low you know trading density stores, as well as you know renegotiate on rentals, as well as the revenue share that we are driving, and also add new experiences you know to the mall. This repositioning exercise is a continuous exercise. High consumption growth actually facilitates this conversation that our leasing teams do across malls. Does that address your question to some extent?
To an extent, but I wanna understand. Let's assume, let's say, let's take one store, for instance, and it is doing INR 100 of consumption, and you are taking a 15-rupee rental. Let's say in the next month, the consumption moves to INR 200. Does that simply imply that the rental would move to 30 from 15? Like, is that repricing instant or there is a lead lag to that repricing?
That's okay. So, let's correct over there.
Yeah, yeah.
Suppose our consumption is 100, typically, in a mall that has just started off, you see, rentals being at about INR 11 or INR 12.
Okay.
Now, as consumption grows from, say, 100 to 200, and we typically expect consumption to double in our malls over a period of, four to five years, this, revenue, this rental that we are seeing would naturally grow from 11-12. It grows to about 22-24. And with tweaks in the revenue share, with higher revenue share, et cetera, coming in, we are able to drive this towards INR 27-INR 28. So the revenue share increases from an initial 11%-12%. It goes up to 14%-15% as we tweak and fine-tune the brand mix, and the commercial agreement, the economic agreement that we have with those particular brands. Historically, if you see FY 2013 to today, we have seen consumption growing at a 14% CAGR, and our renters keeping pace with that, consumption growth over the last 12.5 years.
Okay. Okay. Also a second question on the office assets. You've talked about the new assets doing 41%, but you've excluded out two towers in Pune, about 1 million sq ft, which got their OC in December. Any sense on what is the pre-leasing for those towers currently?
I think, we in fact, have a very strong pipeline for those towers as well, Murtuza. And, you know, we have a significant pipeline, which is in final closing stages, where we have agreed on the commercials and the documents are being negotiated and executed. Give us a quarter more, and we will come back to you with, you know, a very strong leasing updates for the overall portfolio
Sure.
For the office. Yes.
Got it. Thanks. Thanks so much, Varun.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your question to two question per participant. If you have a follow-up question, please rejoin the group. Our next question comes from the line of Gaurav Khandelwal from JPMorgan. Please go ahead.
Yeah. Hi, good morning. Thanks for taking my questions. I've got a couple of those. My first question is, how much of the consumption strength in this quarter was due to GST cuts? And could you also give us some color on how our consumption trends different for the listed and unlisted players, which operate in your mall assets?
Thank you, Gaurav. Those are very interesting questions. I think on the GST cut, we have, you know, evaluated our brand portfolio, and the impact that we have is, I would say it's a sentimental, sentimentally positive impact, but otherwise it is not that material a need mover in our perspective. It has a, I think, the prices of goods, especially when you look at clothing, et cetera, the impact is on a 3%-4% level, and that really, you know, is not moving the needle much per se.
To your other question, I think, you know, it's better to compare, say, listed retailer performance to what they are reporting at their portfolio level. And when we, we have a number of, you know, large listed players with their flagship marquee stores across our portfolio. We believe that the performance that they are seeing in our stores versus the overall portfolio performance that they are reporting, our stores have been demonstrating very strong, sustained growth over a period of last several quarters within the brand mix.
Got it. Thank you. And just a housekeeping question: Your tax rate in last two quarters have increased to almost 20%, which is much higher than, let's say, the preceding eight, twelve quarters. How should I think about the ongoing tax rate from here for next quarter and next year? Does it normalize closer to 25% levels?
So, Kailash, here, you know, I, I don't think this is the right way to compare the tax rates in every quarter, because there would be some adjustment item which keep happening in every quarter. So that doesn't So you should always look at the nine months or, you know, YTD numbers, which will give you better color to the tax numbers. If you see the YTD nine months for current year, it is around 23.7%, you know, on a blended basis. Now, this year, somehow the, you know, the two component, which is the hotel, which was actually having a huge accumulated losses earlier, has been completely adjusted. So now that has come into a full tax regime, which is 25%.
Even the residential sector, you know, business, which comes to a full tax regime. Otherwise, the overall, you know, rental which we recover from either commercial assets or, you know, the retail, is normally having a tax in the range of around 18%-19%. So my suggestion would be that you, for the modeling purpose, I think 22%-23% range will sustain in future. 25% could be in one of the quarter, but that is not something which will happen, you know, for the entire year.
Got it. Thank you. Very clear. Those were all my questions.
Thank you. Our next question comes from the line of Girish Chaudhary from Avendus. Please go ahead.
Yeah. Hi, morning. Thanks for the opportunity. Varun, firstly, I have a question on the, like you mentioned on the repositioning exercise for malls like Bangalore, Pune and Chennai, right? Where, there's a convergence which is expected in the next three to six months. What I wanted to specifically understand is, what's the repricing you have been able to achieve versus the earlier brands in the same spaces?
Sure, Girish. So in fact, let me, you know, say in Phoenix Marketcity, Bengaluru, for example, we have repriced almost 35% of the overall leasable area of the mall. If I just compare the increase in the fixed rent compared to the total rent that we were seeing previously, we expect to see a 35%-40% increase in the area that we have optimized in Phoenix Marketcity, Bengaluru. Similarly in Pune as well, we have optimized and, you know, refreshed almost 40% of the area, and there, the overall impact that we are seeing is about a 25%.
Great. So, as and when the trading occupancy increases, right, which is when we'll start seeing the reflection of this repricing in our numbers?
Yes. So in fact, Girish, trading occupancy started going back up in quarter three of this year. We had hit a low of 80% trading occupancy during quarter one, and now Phoenix Marketc ity, Bangalore and Pune are back to about 85%-86% trading occupancy level. This should now naturally increase to about 90% by March 2025. And then in, you know, June, July of 2026, we should be back at about 94%-95% level.
Yeah.
The-
So for the incremental?
Yeah. I was just completing the point that from you know, already we are starting to see a significant improvement in the trading density. So Phoenix Marketcity, Bengaluru, has reported a 30% growth in the trading density for quarter three, and Phoenix Marketcity, Pune and Chennai, have seen a 20% and 18% growth in the trading density.
Okay. So what I was also, as a follow-up, asking is that for the incremental 10%, which is still there, right, convergence from leased the trading occupancy moving up. So this 35%, for example, for a mall like Bengaluru, you will start seeing those reflecting in the numbers?
Yes. I think you'll see the full impact of it in the numbers during FY 2027, Girish.
Got it. Got it. Great! And, and, the second question is that, you also mentioned about a 50% renewal opportunity available in the next three years, right? So, there, what's the repricing or MTM opportunity available?
Girish, historically, we have seen anywhere between a 20% and 30% improvement, but that is driven not just by repricing of the existing brands, but also in terms of how we have optimized the area given to existing brands and new brands, as well as the economics that we have been able to negotiate with the incoming brands. So, this is what we have done historically, and as we go ahead and renew the area going forward, we'll keep you posted on, you know, how the rents are moving.
So this 50%, which is, let's say, annualized 16%-17% per year, is over and above the normal renewal rates, I mean, norms?
No. So this 50%, I would say, Girish, is the contractual, you know, expiries that are coming up. Over and above this, we may from time to time do targeted churns and optimizations in consultation with our brand partners, and that is in addition to what is there, what is available to us contractually.
Got it. Got it. Thank you, Varun, and all the very best.
Thank you.
Thank you. Ladies and gentlemen, due to the time constraint, that was the last question. I would like to hand the conference over to the management for the closing comments. Thank you, and over to you, team.
Thank you so much, everyone, for joining us on today's conference call. We look forward to seeing you next quarter. Thank you.
Thank you so much. Ladies and gentlemen, on behalf of Phoenix Mills Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.