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Runwal Group and Warburg Pincus enter into a JV to form a retail mall platform

Joint equity investment of $400 million to develop high quality, institutional grade shopping malls in cities with sizeable population centres

Sandeep Runwal, Mall, Warburg Pincus, Retail investment, Runwal Group, Ghatkopar, R-Mall, Sanjay Dube, Anish Saraf, Red Star Macalline, Vincom Retail, NWP Retail

Sandeep Runwal, MD, Runwal Group has formed a joint venture with an affiliate of Warburg Pincus, a leading global private equity firm focused on growth investing, to create a retail mall platform. Both partners will commit $200 million each in the form of equity and shall raise another $600 million in the form of debt to create a corpus of $1 billion, to invest in and develop high quality shopping malls across tier 1, 2, and 3 cities in India which have a sizeable population and growing disposable incomes.

This strategic partnership is founded on a shared vision to create India’s pre-eminent retail mall platform which will benefit from the country’s rapidly growing retail sector at a time when mall penetration across Indian cities is still very low.

The platform will look to build large destination malls as well as smaller hypermarket and cinema anchored community malls. Retail malls in several countries around the world have transformed from pure shopping areas into social, community and entertainment centers. The platform would look to capitalize on this trend by adopting designs for its malls which provide an optimal environment and a high quality experience for all tenants and customers.

Runwal Group already operates four malls in Mumbai with a total leasable area of approximately 2 million sq-ft. This includes its flagship R-City mall in Ghatkopar which has a total leasable area of 1.2 million sq-ft. The platform will be seeded with several pipeline projects which are currently under development and will also have the option of acquiring some of Runwal Group’s operational retail malls.

Going forward the platform would look to acquire both greenfield as well as brownfield projects. The platform would have a best in class management team led by Sanjay Dube who will join as the CEO. 

Following Warburg Pincus’ successful partnerships in the retail mall space in China, Vietnam and Indonesia, with entities such as Red Star Macalline, Vincom Retail and NWP Retail, this investment represents the first mall platform which the firm has backed in India. An affiliate of Warburg Pincus and Runwal Developers will each hold a 50%% stake in the platform.

Runwal said, “The retail real estate sector is expected to see tremendous growth going forward driven by lack of community spaces in Indian cities and the growing disposable income resulting in greater spend on entertainment and branded retail. We look forward to working closely with Warburg Pincus and leveraging their successful experience in helping create market leading platforms in the retail mall space in other parts of Asia.”

Anish Saraf, MD, Warburg Pincus India, said: “With a growing middle class and expansion of branded retail, shopping malls present a meaningful opportunity to participate in India’s evolving consumption story. Runwal Group’s strong retail knowledge and operational experience, together with Warburg Pincus' ability to support creation of market leading enterprises, will enable the joint venture to benefit from India’s long-term growth potential and become the country’s pre-eminent retail mall platform.”

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June 2020
10 Jun 2020