Detailed Narrative
Macroeconomic Environment & Retail Fundamentals
India's macroeconomic background remains highly supportive, with retail inflation at a six-year low and GDP growth projected at a healthy 6.5% for FY26. The repo rate has been reduced by 100 basis points over the last five months, now standing at 5.5%. Retail real estate fundamentals are robust across core markets, driven by favorable demand-supply dynamics and growing consumer confidence.
Q1 FY26 Operational and Financial Performance
Nexus Select Trust reported a strong Q1 FY26, with Net Operating Income (NOI) growing 12% year-on-year (6% on a like-to-like basis). This robust performance enabled the declaration of a distribution of INR 3,378 million, or INR 2.230 per unit, marking the eighth consecutive quarter of 100% distribution payout. Cumulatively, the trust has distributed approximately INR 26.7 billion (INR 17.655 per unit), delivering total returns of over 55% to unitholders in just two years.
Performance of Newly Acquired Assets
Nexus Vega City, acquired in February 2025, achieved an impressive turnaround, with both NOI and tenant sales growing upwards of 12% within four months, reversing a prior 12-month decline. Nexus MBD Neopolis Complex in Ludhiana, acquired in May 2025, showed strong early traction with tenant sales up by 5%. These results underscore the effectiveness of the asset onboarding playbook and value creation strategy.
Consumption Trends and Category Performance
Overall consumption witnessed 11% year-on-year growth (5% like-to-like), despite temporary disruptions in North and West India due to geopolitical tensions. Categories like Jewellery, Watches, Beauty, Personal Care, and Family Entertainment Centres recorded strong growth. Seven new Jewellery stores were launched, and the company is on track to double this category's overall sales salience. The Fashion category is also recovering, supported by targeted marketing campaigns.
Leasing and Marketing Performance
Leasing occupancy stands at 97.2%, with 0.27 million square feet re-leased at healthy spreads during the quarter. The company expects to capture 20%+ leasing spreads on its annual renewal pipeline of 1 million square feet over the next four years. Marketing efforts included large-format thematic campaigns and the pan-India Pokemon Fiesta, driving high footfalls. The Nexus One app now has over 6 lakh users, showing a 2x year-on-year increase in tenant sales uploads and downloads.
Balance Sheet, Debt Management, and Sustainability
The average cost of debt declined by 40 basis points to 7.5% this quarter, benefiting from recent repo rate cuts, with full benefits expected in coming quarters. INR 3,500 million was refinanced at a competitive rate of 6.67%. The company maintains a balanced debt profile (49% fixed, 51% floating) and has a $1 billion debt headroom to reach its 49% leverage cap. Nexus Select Trust commissioned a 13 MW solar plant, increasing its total renewable energy capacity to 60 MW, meeting 55% of its energy requirements and maintaining its 5-star GRESB rating.
Inorganic Growth and Greenfield Development Strategy
The inorganic growth strategy remains on track with a strong pipeline of opportunities, including the imminent Hyderabad acquisition and over 10 other assets. For greenfield development, the company plans a partnership model where developers acquire land and build, and Nexus Select Trust acquires 100% ownership post-completion, leveraging its expertise in mall operations and leasing. This strategy targets both existing presence cities and underserved tier 1 and 2 markets, and potentially new geographies where Grade-A acquisition opportunities are scarce.