Ladies and gentlemen, good day, and welcome to earnings conference call of Nexus Select Trust for Q1 FY 2026. As a reminder, all participant lines 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 the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Dantara, Chief Investor Relations Officer and Head Strategy from Nexus Select Trust. Thank you, and over to you, sir.
Thank you. Good evening, everyone, and thank you for joining the earnings conference call of Nexus Select Trust for the quarter ended June 2025. Before we proceed, I would like to highlight that the management may make certain comments that may constitute forward-looking statements. Please be advised that our actual results may differ materially from these statements. Nexus Select Trust does not guarantee these statements or results and is not obliged to update them at any point of time. Specifically, any financial guidance and pro forma information that we will provide on this call are management estimates based on certain assumptions and have not been subjected to any audit review examination procedure. You are cautioned to not place undue reliance on such information, and there can be no assurance that we will be able to achieve them.
Joining me today on the call are Dalip Sehgal, Executive Director and CEO, our CFO, Rajesh Deo, Jayen Naik, President, Operations, and Mr. Nirzar Jain, President, Leasing. We will start off with brief remarks on our business and financial performance and then open the floor for questions. Over to you, sir.
Thank you, Pratik. Good evening, everyone. It is my pleasure to welcome you to the earnings update call for the first quarter of financial 2026 for Nexus Select Trust, India's first retail REIT. Before we delve into our quarterly performance, I would like to take a moment to highlight some of the key macro trends shaping the broader environment. India's macroeconomic background remains very supportive. Retail inflation is at a six-year low. GDP growth is projected to grow at a healthy 6.5% for financial year 2026, and the repo rate has been reduced by 100 basis points over the last five months, now standing at 5.5%. Retail real estate fundamentals remain robust across our core markets, underpinned by favorable demand, supply dynamics, and growing consumer confidence. Now turning to our Q1 financial year 2026 performance.
We are very pleased to report a strong operational and financial quarter, with NOI growing 12% year-on-year. That is 6% on a like-to-like basis. On the back of this robust performance, we are delighted to declare a distribution of INR 338 crore, translating to per unit for the quarter at INR 2.23, marking our eighth consecutive quarter of 100% distribution payout. With this, we have now cumulatively distributed INR 26.7 billion, and per unit it works out to INR 17.655. Let me share a few updates on our recently acquired assets. As you know, we acquired Nexus Vega City in February of 2025. It has already delivered an impressive turnaround with both NOI and tenant sales growing upwards of 12%. What makes it especially noteworthy is that the asset was witnessing a decline in the 12 months prior to the acquisition.
Achieving double-digit growth within just four months is a testament to the exceptional work done by the team. The second one is Nexus MBD Neopolis Complex in Ludhiana, which was acquired in May of 2025, has already demonstrated strong early traction, with tenant sales up 5% despite being in the very early stages of integration. These results underscore the strength of our asset onboarding playbook, enabling us to unlock value from day one through focused operational enhancements and targeted marketing interventions. The strong initial performance of both these acquired assets highlights the effectiveness of our post-acquisition strategy, driven by rapid rebranding under the Nexus umbrella, targeted upgrades to core mall services, curated category-level initiatives, and enhanced marketing efforts. These focused interventions enable us to unlock very swiftly and seamlessly.
Building on this momentum, our inorganic growth strategy remains firmly on track, supported by a strong pipeline of opportunities and a highly experienced team. We expect to complete the Hyderabad acquisition shortly and are actively advancing multiple other strategic transactions ahead, including greenfield development. Now, coming to consumption, we witnessed, like I said earlier, 11% year-on-year growth, which is 5% like-for-like, despite temporary disruptions in our North India portfolio due to geopolitical reasons that all of us are aware of, as a result of which some of the malls were shut for some time. Our like-for-like consumption growth this quarter was nearly twice that of previous quarter, clearly signaling a sequential improvement in the consumption trend. With early signs of recovery across categories, we remain optimistic that this momentum will strengthen further in the coming quarters.
Now, let me share some category-wise consumption trends that we are witnessing, and I am sure you will be interested in knowing this. Categories such as jewelry, watches, beauty and personal care, and family entertainment centers recorded strong growth during the quarter and continue to demonstrate robust performance. In response, we have been proactively allocating additional space to these high-performing segments, a trend we intend to sustain going forward. As previously communicated on our Analyst Day in May 2025, one of our strategic priorities has been to increase the contribution of the jewelry category within our portfolio. I am pleased to share that in line with this vision, we launched seven new jewelry stores across the mall this quarter. With this momentum, we remain on track to double this category sales overall to our sales in the year to come.
Fashion category, which is our largest category, continues to recover, with sales driven by clearance of older stock and the launch of new summer collections. This upward movement was supported by our targeted marketing campaigns like Vacation Nation, Denim Fest, Sneaker Fest, which helped augment footfalls. Let me walk you through our leasing and marketing performance. First, leasing. We continue to witness very strong tenant demand with leasing occupancy now at 97.2%. During the quarter, we re-leased almost 0.27 million square feet at healthy spreads, underscoring the sustained appetite for high-quality, Grade A retail space. Looking ahead, we have approximately 1 million square feet coming up for renewal annually, every year over the next five years, representing nearly 50% of our total rental base. We remain confident in our ability to capture 20% plus re-leasing spreads in our portfolio.
In parallel, we will continue to proactively churn and resize underperforming categories and rents to enhance overall productivity and mix. Coming to our marketing performance. Our pan-India scale enables us to design and execute large-format thematic campaigns across the country. This quarter, we focused on summer activations such as Jungle Tales, Army Boot Camp, Sunken Kingdom, and Neon Park, all of which attracted high footfalls, particularly among young families. One of the standout campaigns this quarter was the pan-India Pokémon Fiesta, a fully immersive experiential event. It generated significant buzz and delivered memorable high-engagement moments for our shoppers through a series of Pokémon-themed activities. Our NexusONE app, that we've spoken about earlier as well, now has a user base of over 7 lakh, continues to rank among the top-performing shopping mall apps in India.
The app has witnessed a 2x year-on-year increase in both tenant sales, uploads, and downloads, reflecting its growing relevance in deepening consumer engagement and driving digital-enabled retail experiences. Coming to our robust balance sheet, I'm pleased to share that our average cost of debt declined by 40 basis points to 7.5% this quarter, benefiting from the recent repo rate cut by the RBI, with the full benefit expected to reflect in the coming quarters. Additionally, we have successfully refinanced INR 350 crore at a competitive rate of 6.67%, achieving a tight spread of just 37 basis points over the 10-year G-Sec yield, a noteworthy accomplishment by our finance team.
Our current gross debt is evenly balanced with 49% in fixed-rate instruments and 51% at floating rate, positioning us well to benefit from any further reduction in the repo rate. Coming to sustainability, your company continues to lead the retail sector on ESG benchmarks. We remain the only mall platform in India to receive a prestigious five-star rating from GRESB. During the quarter, we successfully commissioned a 13 MW plant in Pavagada in Karnataka, which is expected to generate approximately 19 million units of clean energy annually and offset nearly 15,000 tons of CO2 emissions. With this addition, our total renewable energy capacity has increased to 60 MW, enabling us to meet 55% of our portfolio's total energy requirements through renewable sources. Just to at the end summarize our quarter's performance. We witnessed sequential growth in consumption this quarter and expect this momentum to sustain.
Number two, newly acquired malls delivered a strong NOI on consumption, validating our acquisition strategy. NOI grew 12% in the quarter. We remain on track to achieve our full-year guidance. We declared eight consecutive distributions. Total payout since listing now is, in terms of total returns, over 55% returns since listing. We remain on track to achieve the full- year NDCF guidance of INR 9.1 per unit. Lastly, we crossed another milestone, 50,000 unitholders this quarter, which is twice the number that we had at the time of listing. This is a testament to your continued trust and support. Let's now move on to the Q&A.
Thank you very much. We will now begin the question- and- answer session.
Anyone who wishes to ask a question may press star and one on the touch-tone 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 will wait for a moment while the question queue assembles. The first question is from the line of Puneet from HSBC. Please go ahead.
Yeah. Thank you so much, and congratulations on good performance. My first question is with respect to the consumption growth. So your like-to-like consumption growth was more like 4.6%. But if I look at your top malls, Select Citywalk, Elante, Ahmedabad, Nexus Seawoods is still better. That's below 4.6%. So can you highlight which were the stronger performing ones and what's happening in those?
Yeah. I think fair question. First of all, as you know, in the month of May, we had a disruption because of Operation Sindoor, as a result of which the malls in the north, including the one in Delhi, got impacted because malls were, A, not allowed to operate for some time in Amritsar and in Elante, Chandigarh. Also, even when they were operating, they were shutting early and there were lower number of footfalls, et cetera. I think the north, to a very large extent, got impacted with what happened during those five or six days. So that's the reason. As far as Ahmedabad is concerned-
Yeah
I think Ahmedabad is back on track. As you know, we had a competitive entry in that market, with Phoenix coming in. But very happy to say that in less than a year's time, we are actually now positive in terms of sales and of course, in terms of NOI as well. And you will see even better results as we go forward. So that's Ahmedabad. Seawoods, I think has been good. I don't think there's any great issue there.
But any other standout mall that you want to highlight, which
So Bangalore, I think South has performed extremely well. Yeah. South has performed extremely well. I think, the three existing malls plus the fourth that we acquired, if you look at the entire total, I think our growth was a strong double-digit growth in Bangalore. Way ahead of competition as well. So Bangalore is one where I think our numbers are stacking up brilliantly. In some of the tier two markets also, we've done very well. Bhubaneswar grew almost double- digits. So did Fiza in Mangalore, and Mysuru. Udaipur was one of our fastest growing markets, I think grew at 17 odd % in terms of consumption. So overall, if you look at it, I think tier two also has done well.
Bangalore specifically, now that we have synergies of scale with four malls and our ability to advertise across the city, I think that is also helping us to grow. Chennai did well as well. Overall, if you look at it, apart from the disruption that we faced in the north and to some extent even in Ahmedabad, where there were some blackouts that happened in the evening, malls were asked to close at a very early time in the day. I think even Ahmedabad, to some extent, got impacted. Our sense is that we have probably lost about 1%. Overall, if we are, let us say around 4.5%-5% like-for-like growth, it could have been 100 basis points higher. So we could have been at 5.5%-6%.
Understood. In your NDCF, if you can talk a bit about what is driving this strong positive contribution on the working capital side.
I think the organic NDCF is reflecting the growth that we have had in the NOI. If you look at like-for-like malls, the NOI grew by 6%, and that is what is reflecting in the NDCF.
So there is this INR 53 crore of working capital positive number. Just some color on that part.
We have had some tax refunds amounting to, I think, INR 4 crore-INR 5 crore. The collection has driven the working capital up. We have ensured the debtors have come down to about 3.2 days, and security deposit collection has been on a record high.
Yeah. Just to reiterate, I think the great work done by the finance team. Our debtors are now at three and a half days, which is probably the lowest that we've ever had in these eight years of the company. That has, of course, led to freeing of cash as well. That's why you see the working capital actually coming down overall. Yeah.
That's very interesting. Thank you. Lastly, on Select, occupancy is down a tad bit, 95%. Anything specific you're doing there?
That's a churn. That's a churn that happens. We're getting in a couple of international brands, and for that period, then you need to shut the store before you get in the new brands. It's only to do with that, nothing else. In fact
And should it be back in a quarter or will it take longer?
Yes. Go ahead.
Hi, this is Nirzar. Just to add to what Dalip sir was saying, these stores are under fit-out, and you will see some new first-in-country stores as well launched at Select in the next few months. So these stores are under fit-out just now, and that is what has led to the drop in trading occupancy.
Yeah. Just to add to that, I think some of those first-in-country stores that have already got launched, maybe Nirzar, you can speak about that.
We have launched almost seven to eight first-in-country stores already with Prada Beauty, Nespresso, Gucci Beauty.
Foot Locker.
Foot Locker as well. You will see some more in a different zone getting launched very soon as well.
Puneet, we are targeting to open these stores before the festive season, so hopefully next quarter we should be open.
Excellent. That is okay. Thank you so much, and all the best.
Thank you. Thank you for your question. Thanks.
Thank you. Participants who wish to ask questions may press star and one at this time. To ask a question, please press star and one now. The next question is from the line of Praveen Choudhary from Morgan Stanley. Please go ahead.
Hi. Thanks so much for taking my question, and congrats for a very strong NOI growth. My question was related to dividend growth. Is it correct that I am seeing 4% growth in DPU despite very strong NOI growth? Just wanted to understand, despite good refinancing and accretive deal that we have done in these two malls, why are we seeing our dividend growth to be slightly lower? Is it that it will improve in the next couple of quarters as the new malls mature? Thank you.
Hi Praveen. Pratik here. Praveen, while the reported NOI growth was 12%, the like-for-like growth was about 6%. The new malls that we acquired are in the process of being integrated, like Dalip mentioned. DPU growth was 4% on the back of NOI growth being 6%, and we expect this to only improve in the quarters ahead. We maintain the full- year guidance that we had given last quarter, and we are very hopeful that we should get to that guidance on a full- year basis, as we are seeing gradual recovery in consumption, and the trends are looking positive.
Okay. Thank you so much.
To answer your question on the repo rate, I think, this quarter saw partial benefit on account of that reset. The full quarter benefit should actually start flowing in from the next quarter.
Understood. Okay. Thank you.
Thank you.
Thank you. The next question is from the line of Parvez Qazi from the Nuvama Group. Please go ahead.
Hi, good evening. Two questions from my side. First, wanted to get your views on our acquisition pipeline. Second, what would have been the footfall growth this quarter? Thank you.
Hey. Hi, Parvez. Pratik. The acquisition pipeline remains pretty strong. We have got around 10+ assets in the pipeline. We are looking at assets across India. Very strong conversations going on, both on the asset acquisition side as well as a couple of conversations on the greenfield side. We are hopeful that once the Hyderabad acquisition closes, we are able to close a few more in this year. It looks healthy. On the footfall growth, I think on a reported basis, we have got about 4% footfall growth, and that includes the acquired malls. While on a like-for-like basis, that number would be flat.
Sure. Thanks, and all the best for future.
Thank you [crosstalk].
The next question is from the line of Ashish Mendhekar from JP Morgan. Please go ahead.
Yeah. Hi. Thank you for the opportunity. I have three questions. First one is, what is the leverage ceiling you have, like the shareholder approval leverage you have? The second one is, can you help with the consumption growth outlook for the portfolio at large? If I can ask one more. You mentioned about the repo rate benefit. Can you just quantify how much benefit we can accrue during the year? Yeah. Thank you.
Yeah. So, like we have given in the presentation, our landing rate, cost of debt has reduced from 7.9% to 7.5%, reflecting a 40 basis points reduction. Some repo rates will be effective only on the reset date of those term loans. Like Pratik said, those benefits would start accruing in terms of getting passed on to the unitholder starting quarter two.
In terms of consumption growth, what are the trends looking like? I think they are certainly better than what they were in the first half of last year. As you would have seen, we have, including the acquisitions, grown at around 11 -odd% . My sense is that it will only get better from here. Early trends in July are positive, and we do believe that with a good monsoon, overall demand will pick up. There are also other tailwinds that will help. The whole thing that the Finance Minister had announced, there will be a lot of cash flowing into the economy. With inflation under control, my sense is that this will only improve in the quarters to come.
Ashish, to answer your first question on how much headroom on debt we have, I think there we have about $1 billion of headroom on debt, and that takes us to an LTV of about 28%-30% over a period of five years. From a shareholder approval standpoint, I think we have an approval up to 35%. So that approval is already in place. We took that last year.
Okay. So 35%. Yeah. That is the number which I was looking for. Yeah. Thank you.
Thank you.
Thanks.
Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Tushar, an individual investor. Please go ahead.
Hi, sir. Am I audible?
Yeah.
Hello. Yeah. Sir, just a bookkeeping question.
Yeah, go ahead.
Sir, just a bookkeeping question. In the results which you published and in the presentation, there is a difference in EBITDA and the revenue from operations. In footnote, you have mentioned that eliminating intercompany transactions. I just wanted to understand what kind of transactions are these that are eliminated that cause the difference?
These are basically your cross-charge fee. Normally, the manager charges 4% of revenue from operations from the SPVs. These get eliminated. There is another one, which is a renewable power that we supply from a solar entity called MSPL, Mamadapur Solar, to our Bangalore malls. These are another set of transactions that gets eliminated.
Okay. I just wanted to know, sir, the results we post on Nexus, are those from the SP or are those from the Nexus now? The presentation also from Nexus, so why is it like this?
Sorry, we lost you.
Tushar, we lost you.
Could you repeat your question, please?
No, sir. Sir, I think I understood. Thank you.
Okay.
All right. Thanks.
Thank you.
Thank you.
The next question is from the line of [Jatin] from Bank of America. Please go ahead.
Hi. Thanks for the opportunity. Just wanted to get some more color on your greenfield strategy. You did mention that there are a couple of conversations that
Yeah
you're having. What's the construct here?
Yeah.
Are you looking for a partnership model or want to go on your own? Any particular markets that you're focusing on where mall penetration is less? That would be really helpful.
Okay. To begin with, I think, you're absolutely right. We are looking at a partnership model, where we partner a strong developer. See, our basic core strength is running the mall and probably designing them in a particular way. So we would work with developers who are strong and are able to deliver on time. That is what we would do. In terms of which all cities, I think we're looking at all the cities where we are currently. We are in 15 cities, and I think there is an opportunity across the board, even in tier two cities, tier one metros, because the metros have also expanded a lot. So it depends on where you want to be. Bombay is not really one. MMR is a huge area. NCR is a huge area. Bangalore is expanding rapidly.
So we're looking at all the options that financially and from a consumer perspective would make sense.
Thank you so much. That is really helpful.
Thank you. [crosstalk]
Participants who wish to ask questions may press star and one at this time. To ask the question, please press star and one now. The next question is from the line of Biplab Debbarma from Antique Stock Broking. Please go ahead.
Good evening, everyone. My question is, in the greenfield acquisition, what kind of structure would you have? Is it like after the delivery of the mall, you would be owning 100% of the mall? Whose responsibility is it to lease? Would you lease after the developer deliver it to you or typical forward contract? What kind of greenfield acquisition are you looking at?
Hi, Biplab. Pratik here. Like Dalip mentioned, our strength is on the leasing ops and marketing side. Our kind of role will come in primarily to start with the leasing piece. I think on the developer side, the role would be to get the approvals and the structure up, and once you get the structure completed, we step in to do the leasing. That is the structure that we are looking at or the construct that we are looking at for greenfield, if that answers your question.
Okay. The developer identifies the land, show it to you give the green signal, and then they give you the cost and whatever is fees. Once it is delivered, you buy that at a price.
Yeah.
Then you lease it, right?
Yeah.
You do not pay for the land or Right? I mean, they acquire the land, right?
Yeah, they acquire the land. There will be a construct wherein you kind of get into a partnership, by committing yourself to buying it in the future.
Okay, 100%. Then once they deliver it to you own the asset 100%, and you lease it, right?
Yes.
Okay.
Yes.
Okay. Thanks.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Ashish Mendhekar from JP Morgan. Please go ahead.
Yeah. Just to follow up, are you looking at any new geography outside of the cities where we are present in for the greenfield?
Ashish, hi. It's Pratik. Yes, we're definitely looking at markets outside. Not all markets in India have ready-made structures to acquire in terms of ready assets, right? So wherever we believe it's a strong market in terms of consumption, and there is no asset available in that micro-market to acquire, we're looking at greenfield options.
Yeah. Like I said, today, Mumbai is not what it was. Mumbai is now extended. If you look at Seawoods, it's in Navi Mumbai, which 10 years ago wasn't really a flourishing market. But today it's hugely delivering very good results. So I think we are looking at where we are in those cities and also if there's an opportunity, where, let's say, those markets are being underserviced, we would look at that as well.
Okay. Understood. Thank you.
Thank you.
Thank you. That was the last question of our question- and- answer session. As there are no further questions, on behalf of Nexus Select Trust, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you. Thank you so much.