Virtuous Retail South Asia Pte. Ltd. announced that it had raised US$ 175 million (~INR 1,150 crores) of additional equity from APG Asset Management, one of the founding shareholders of the company. The new equity raise augments the existing growth capital commitment the founding partners made in late 2016. In November 2016, in what was the single largest deal in the retail real estate sector in India, Dutch pension fund asset manager APG Asset Management (“APG”) and Virtuous Retail (“VR”), sponsored by leading emerging markets investment firm The Xander Group Inc. (“Xander”), had formed a US$ 450 million joint venture, Virtuous Retail South Asia (“VRSA”), that acquired an initial portfolio of 3 retail assets in a transaction valued at ~INR 2,000 crores (US$ 300 million) and committed an additional US$ 150 million as growth capital, giving the new company an immediate investment capacity of ~US$ 300 million to be used for acquisitions and new developments.

In May this year, VRSA acquired a leading 2 million square feet center in the Chandigarh Capital region for INR 700 crores (~US$ 108 million) taking the retail portfolio to ~5.5 million square feet. The center has since been rebranded under the VR flag and is undergoing a reconditioning. Named VR Punjab in recognition of its dominant location in the tri-city region and positioned as a regional flagship center for the state, the center extended VRSAs footprint into north India.

The new US$ 175 million equity investment announced today will augment the existing investment capacity of the company and position it for future growth.

"This new equity commitment to VRSA reflects our continued support for the growth of the platform and our conviction in the retail sector in India”, said Patrick Kanters, Managing Director and Global Head of Real Assets for APG. He further added, “We have been impressed with VRSA’s performance and the management team’s ability to develop new projects, continuously enhance existing ones, as well as acquire new assets in a highly competitive environment. We are looking forward to the coming years as VRSA’s best-in-class management team executes on the strategic plan. Additionally, we are also pleased to further expand our strategic relationship with Xander in India.”

Sid Yog, Founder of The Xander Group and Chairman of VRSA said, “VRSA has expanded significantly across all parameters over the last year. We have grown the portfolio by adding VR Punjab, the team has expanded to ~250 people and NOI has seen a healthy growth of close to 20% in our stabilized centers. VR Chennai is about to open on schedule in the first half of next year and with all our existing centers trading, our focus will be on new greenfield projects and selective acquisitions which meet our location and quality parameters”.

Virtuous Retail is at the forefront of building and operating cutting-edge lifestyle centers that serve the evolving retail market and the discerning Indian consumer. The current portfolio comprises ~5.5 million square feet across four flagship centers in Bengaluru, Surat, Chandigarh and Chennai. The company will continue to leverage its extensive capabilities across the value chain of development, ownership and operations, to grow its portfolio by adding centers in other key markets, including the National Capital Region of Delhi, the Mumbai Metropolitan Region, Pune, Hyderabad and Kolkata.

Rohit George, Executive Managing Director and Chief Investment Officer, VRSA, said “APG and Xander are like minded long-term investors who have demonstrated their commitment to the Indian retail sector. This additional equity gives VRSA the firepower and the runway to add significantly to our already dominant portfolio of highly visible shopping centers, integrated with extensive and unique management capability built by us over a decade. We hope to announce some exciting new developments and acquisitions in the near future that will further expand VRSAs footprint across our key focus markets in India”.