Detailed Narrative
Current Operating Environment & Consumption Trends
Nexus Select Trust observed a meaningful improvement in consumption trends since early March, with positive momentum continuing through Q1 FY27 and into July. Despite ongoing geopolitical uncertainties, consumer demand remained resilient, underscoring the strength of India's domestic consumption story. Tenant sales grew 17% year-on-year, supported by key festive occasions like Akshaya Tritiya and Baisakhi, along with the wedding season. This growth was broad-based across categories, reinforcing confidence in discretionary consumption and premiumization.
Q1 FY27 Financial Performance
The company delivered a robust financial quarter with 11% year-on-year Net Operating Income (NOI) growth. A distribution of INR 370 crores was declared for the quarter, translating to INR 2.442 per unit, reflecting 10% year-on-year growth. This marks the 12th consecutive quarter of 100% distribution payout, demonstrating a commitment to consistent results for unit holders. Cumulatively, since its listing in May 2023, Nexus Select Trust has distributed over INR 4,080 crores (INR 26 per unit) and delivered 2x returns to unitholders.
Leasing & Asset Management Strategy
Nexus Select Trust re-leased approximately 4 lakh square feet during the quarter at healthy spreads. Of this, around 2 lakh square feet were strategically churned ahead of lease expiry at spreads of over 20%. This proactive asset management approach is exemplified by the Nexus Hyderabad mall, where an underperforming hypermarket was replaced with a premium international fashion brand, resulting in a 2x increase in effective rentals and a 3x improvement in trading density. The company also curated a dedicated Jewellery Zone at Nexus Seawoods, delivering a 1.5x uplift in rentals and a 4x increase in trading density.
Acquisition & Development Pipeline
The company maintains a robust acquisition pipeline of eight assets across India, with two currently under due diligence. The acquisition of Diamond Plaza is expected to close within the next 45 to 60 days, and 1-2 additional acquisitions are anticipated in the next 60 to 90 days, primarily in the East of India. Construction for Nexus Runwal Gardens Mall in Mumbai is progressing as planned, with 70% of the foundation work completed and the balance expected by September 2026. The asset is targeted for acquisition by March 2028.
Category-wise Sales Performance
Fashion continued its strong growth, driven by demand for summer collections and ethnic wear. Jewellery maintained exceptional momentum with over 50% sales growth, supported by higher gold prices and strong festival demand, contributing 32% to the highest-ever single-day sales of INR 112 crore on Akshaya Tritiya. Family Entertainment Centres (FECs) grew 16%, benefiting from strong footfalls and a robust movie slate. Electronics saw 24% growth due to strong demand for summer appliances. Fashion contributes ~50% to overall sales, Jewellery ~7%, Electronics ~16%, F&B ~10%, and Entertainment ~6%.
Rent-to-Sales Ratio & NOI Growth Outlook
The company expects its Net Operating Income (NOI) to grow between 8-9% annually, building on a 10% CAGR since listing. The current rent-to-sales ratio stands at about 12%, with a target to move closer to the upper end of the 12-14% range through upcoming lease renewals and strategic churn. Management noted that the gap between consumption growth (17%) and NOI growth (10%) is partly due to onboarding high-value categories with lower initial revenue share, which are strategically important for premiumization and long-term rental growth.