Singapore Buys Stake In India Mall Developer

Mall and mixed-use developer Phoenix Mills has raised Rs 1,100 crore from selling shares of its stock, reported Indian daily paper Business Standard. About 40.9 percent of that is from Singapore’s government. The investment comes despite the difficulties of malls due to the growth of eCommerce amid the global COVID-19 crisis.

With the investment, Singapore will have a 4.3 percent stake in the India-based company. The Standard added that another large owner of Phoenix Mills shares, Schroder International Selection Fund Emerging Asia, appears to hold a 2.84 percent stake.

India’s retail, residential and hospitality and real estate segments have “faced near-term challenges,” according to Motilal Oswal Financial Services, based in Mumbai, India. However, the reopening of India, including shuttered malls, bodes well for business prospects. The financial company added that Phoenix Mills “still remains” a good bet for the medium- to long-term — and India’s “commercial segment has shown resilience.”

In a report, India-based ICICI Securities said the reopening  of key malls in Mumbai and Pune, both major cities, “are likely to provide some relief in cash flows.”

HDFC Securities said, however, that “we believe we are a vaccine away from normalcy, and it will be a hard road over the next 12 to15 months.”

In the U.S. in May, mall traffic at eight reopened shopping centers reached record lows as online traffic jumped. In addition, Walmart’s first-quarter earnings results showed consumers’ headlong rush into digital.

Now, a new eCommerce platform coming out of the Alibaba Group in Southeast Asia offers a business model to malls in that region — one that could provide a blueprint for struggling U.S. shopping destinations.

The platform to bring malls online — or create a virtual mall — is being led by an Alibaba-owned company called Lazada. Its virtual LazMall was first offered in August 2018.

Marina Square Shopping Mall in Singapore is the first shopping center in the country to partner with Lazada.

“It’s a new concept in Singapore,” James Chang, chief executive officer of Lazada Singapore, said in July. “From a shopping mall’s perspective, it could be seen as competition, but we worked out this partnership because it provides visibility and awareness of the tenants and offline mall.”