Mumbai developer to raise $450m for retail and hospitality

Phoenix Mills plans to raise capital from foreign private equity investors for development of malls and hospitality assets throughout India.

Phoenix Mills, a Mumbai-based real estate developer, is planning to raise around $450 million (€292 million) from private equity investors for financing its mall and hospitality projects, according to reports.

According to a senior official with the company, Phoenix Mills is planning to raise $200 million to fund its retail project pipeline, and $250 million to fund its hospitality projects. Chief Financial Officer Mahesh Iyer told Reuters that the firm has begun fundraising.

He also said that all of the projects in the company’s pipeline are FDI-compliant, meaning that foreign groups can invest in them. For this reason the firm has chosen to raise a pool of private equity capital to invest in carious projects, rather than partnering with firms for specific projects. It is only seeking capital from foreign investors. The fundraising push comes after the firm raised $300 million last year to fund retail projects.

The company is also raising another $250 million in private equity funding for its hotels business. The firm recently formed a hospitality subsidiary called Phoenix Hospitality, and it currently has 14 hotel properties under development. It has entered into a partnership with Shangri-La Hotels to manage a 400-room luxury hotel it is developing in central Mumbai.

Phoenix has banked its strategy on redeveloping disused property in tier I and tier II cities, and has partnered with firms such as Entertainment World Developers and Big Apple Real Estate to do so. The firm operates a large retail mall in Mumbai that posted 731 million rupees ($17 million) in revenue for the year to March, according to Reuters. It is currently planning 25 million square feet of retail and hospitality development, and it says it expects to add about a million square feet of retail space in the next two years.