Phoenix Mills has announced a significant strategic move, acquiring Canada Pension Plan Investment Board's (CPP Investments) 49% stake in Island Star Mall Developers Private Limited (ISMDPL) for Rs 5,449 crores. This acquisition, coupled with the company's strong Q1 performance, marks a pivotal moment in Phoenix Mills' growth trajectory.

Acquisition Details

The Phoenix Mills' board has approved the acquisition of CPP Investments' 49% stake in ISMDPL, which will give Phoenix Mills 100% ownership of the platform. The transaction, valued at Rs 5,449 crores, will be payable over 36 months in four tranches, subject to shareholder and regulatory approvals.

ISMDPL Portfolio

The ISMDPL platform, which generated Rs 617 crores EBITDA in FY25, comprises:

• 4.4 million sq ft of operational retail space
• 2.2 million sq ft of completed offices
• Planned expansions including 0.8 million sq ft of retail and 1.6 million sq ft of offices
• Two hotels totaling approximately 700 keys at Phoenix MarketCity Bangalore

Strategic Rationale

Shishir Shrivastava, Managing Director of Phoenix Mills, emphasized the strategic importance of this acquisition: "This transaction fully aligns with our strategic objectives. It gives us complete control of a high-performing platform structured in a capital-efficient manner that safeguards Phoenix Mills' liquidity."

Funding Structure

The acquisition will be funded through:

• ISMDPL's cash flows
• Dividends
• Buybacks
• Available leverage headroom

Q1 Performance Highlights

Alongside this strategic acquisition, Phoenix Mills reported strong Q1 results:

Retail Portfolio Repositioning

Rashmi Sen, Whole Time Director and CEO Malls, explained the ongoing repositioning strategy: "We are undergoing a significant repositioning and premiumization change for most of our legacy assets. This gives us a beautiful opportunity to rethink and reimagine our spaces to continue providing newer experiences to our customers."

Office Portfolio Outlook

The company reported that its recently completed office spaces, totaling about 2.2 million sq ft, are currently only 6% leased. However, Phoenix Mills has set an ambitious target to achieve 90% leasing by 2026, with a strong leasing pipeline in place.

Future Outlook

Phoenix Mills remains committed to its growth strategy, with plans to expand its portfolio to 14 million sq ft of retail, 3.5 million sq ft of offices, 1,200 hotel keys, and 2.5 million sq ft of residential inventory by FY 2030.

The acquisition of full ownership in ISMDPL, combined with strong quarterly performance and ongoing portfolio optimization, positions Phoenix Mills for continued growth and value creation in the coming years.

Phoenix Mills Limited (PML) has announced a significant strategic move, approving the acquisition of Canada Pension Plan Investment Board's (CPP Investments) 49% stake in Island Star Mall Developers Private Limited (ISMDPL) for Rs 5,449.00 crores. This transaction, subject to shareholder and regulatory approvals, will give Phoenix Mills complete ownership of the platform, marking a pivotal milestone in the company's growth journey.

Transaction Details

The consideration of Rs 5,449.00 crores will be payable over 36 months in four tranches. This structured payment plan allows Phoenix Mills to maintain financial flexibility while pursuing its growth aspirations. The transaction is expected to be significantly value-accretive, with the potential to drive robust EBITDA growth over the next five years.

ISMDPL Portfolio

ISMDPL, which began as a joint venture with CPP Investments in 2017, has grown substantially over the past eight years. The platform currently comprises:

• 4.4 million sq ft of operational retail space
• 2.2 million sq ft of completed offices
• Planned expansions including additional retail and office spaces

In the fiscal year 2025, ISMDPL generated an EBITDA of Rs 617.00 crores, demonstrating strong financial performance.

Strategic Rationale

Shishir Shrivastava, Managing Director of Phoenix Mills, highlighted several key benefits of this acquisition:

1. Elimination of minority interest leakages
2. Enhanced operational flexibility
3. Improved ability to upstream cash flows to PML
4. Potential for future platform monetization through REITs or listing
5. Option for individual asset-level monetization

Growth Prospects

The management expects significant growth potential from the ISMDPL platform:

• Organic growth from the operational retail portfolio
• Ramp-up of occupancy in completed office assets
• Expansion plans at Phoenix MarketCity Bangalore
• Additional FSI potential across developments in Indore, Pune, and Bengaluru

Funding Strategy

The acquisition will be primarily funded through ISMDPL's cash flows, dividends, buybacks, and available leverage headroom. The company's strong balance sheet and growing free cash flows position it well to pursue this acquisition without compromising on other growth initiatives.

Q1 FY2026 Performance Highlights

Alongside this strategic announcement, Phoenix Mills also reported its Q1 FY2026 results:

The company noted that the lower rental income growth was due to planned repositioning exercises at MarketCity malls and the demolition of retail blocks at Phoenix Palladium for expansion.

Future Outlook

Phoenix Mills remains committed to its expansion plans and sees this acquisition as a step towards strengthening its position in the retail-led mixed-use development space. The company continues to focus on creating high-quality assets and driving value for its shareholders.

As Phoenix Mills moves forward with this strategic acquisition, it reaffirms its position as a leading player in India's retail and commercial real estate sector, setting the stage for continued growth and value creation in the coming years.