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Edited Transcript of PHOE.NS earnings conference call or presentation 13-Feb-21 6:00am GMT

·45 min read

Q3 2021 Phoenix Mills Ltd Earnings Call Feb 13, 2021 (Thomson StreetEvents) -- Edited Transcript of Phoenix Mills Ltd earnings conference call or presentation Saturday, February 13, 2021 at 6:00:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Shishir Ashok Shrivastava The Phoenix Mills Limited - MD & Executive Director * Varun Jagdish Parwal The Phoenix Mills Limited - SVP of Finance & IR ================================================================================ Conference Call Participants ================================================================================ * Abhishek Bhandari Macquarie Research - Analyst * Alpesh Thacker Motilal Oswal Securities Limited, Research Division - Equity Research Analyst of Institutional Equities * Atul Mehra Motilal Oswal Financial Services Limited - Fund Manager * Biplab Debbarma Antique Stockbroking Ltd., Research Division - VP * Karan Khanna AMBIT Capital Private Limited, Research Division - Analyst * Kunal Lakhan CLSA Limited, Research Division - Research Analyst * Manish Agrawal JM Financial Institutional Securities Limited, Research Division - Research Analyst * Niket H. Shah Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager * Parikshit D. Kandpal HDFC Securities Limited, Research Division - Research Analyst * Pritesh Chheda Lucky Investment Managers Private Limited - Analyst * Puneet J. Gulati HSBC, Research Division - Analyst * Rajesh Disale ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, good day, and welcome to the Q3 and 9 Months FY '21 Results Conference Call of the Phoenix Mills Limited. (Operator Instructions) Management of the company is represented by Mr. Shishir Shrivastava, Managing Director; and Mr. Varun Parwal, Senior Vice President, Finance and Investor Relations. (Operator Instructions) Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Shrivastava. Thank you, and over to you, sir. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [2] -------------------------------------------------------------------------------- A very good morning, ladies and gentlemen, and I hope that you are all keeping well and staying safe. We take pleasure in welcoming you all to discuss the operating and financial performance of the third quarter and 9 months of FY '21. In our retail segment, we continued to experience sustained recovery in the consumption at our malls since we reopened, and in Q3 FY '21, on the back of the festive season. Consumption during the third quarter was the point INR 13.8 billion across our retail portfolio. This is an increase of 195% quarter-on-quarter and compares at about 67% of Q3 of last year's consumption. Our retail collections continued to register sharp improvements in line with our improved consumption metrics. Q3 and 9-month FY '21 retail collections were around INR 2.6 billion and INR 3.9 billion, respectively. With the gradual opening of locations to the public, consumer confidence and sentiments have improved and an apprehension to venturing out has reduced. Consumption levels are anticipated to sustain and gradually improve going forward. January 2021 witnessed strong consumption trends with levels reaching close to 83% of January 2020, which amounted to about INR 5.3 billion. Please note that these numbers are not adjusted for the underperforming multiplex and FEC. If we remove these numbers from last year's base, January consumption will move up to close to 90% and maybe slightly higher. So now we have seen 3 successive months where we saw consumption in excess of INR 5 billion each month. Moving on to our commercial business. Our commercial office portfolio was the least impacted business segment and continues to remain resilient. For 9 months FY '21, commercial revenues were at 93% of last year. Fountainhead Tower I in Pune has a leased occupancy of approximately 95% and is fully operational. Fountainhead Tower II is complete, and we received the occupancy certificate in October 2020. We continue to witness strong interest from potential lessees given the convenient location and the unit size of our offering. We have so far leased out approximately 50,000 square feet of area at an average rate of INR 71 per square foot. Work at Fountainhead Tower III is on course for completion, and we anticipate to complete work in the next 2 months. Art Guild House in Mumbai has a leased occupancy of 85% as of December 2020. In our residential business, we have witnessed strong traction in residential sales, mainly led by the reconfiguration of our Kessaku property into smaller units and a robust demand for ready-to-move-in inventory. We sold and registered agreements for inventory worth INR 556 million during Q3 FY '21 and INR 1 billion during 9 months of FY '21. We also recorded additional sales of INR 397 million during 9-month FY '21, for which registration is pending, taking the cumulative sales figure to approximately INR 1.4 billion during the 9-month period of FY '21. Sales velocity continues to remain strong in the current quarter as well, and we have seen cumulative sales of approximately INR 1.75 billion and collections of about INR 1.2 billion so far. Hospitality has been slow amongst our other -- amongst our business segments. It's been slow on pickup, and it's understandably so. Our property in Mumbai, the St. Regis is primarily a business hotel, and with a reduction in business travel, that has seen an impact on the room revenue. This business has witnessed early signs of recovery, but we expect operating performance to remain subdued until business and leisure travel normalizes. We took several cost rationalization steps at the hotels, and I'm happy to share that at the property level, the St. Regis has been able to achieve positive operating profits for the period of October through December. We have utilized this downtime to take up certain upgrade projects, which will help us come back stronger once the market improves. To give you a sense, at the St. Regis, Mumbai, we are upgrading the F&B and banquets to capitalize on the wedding season. We would like to share with you a new acquisition of a greenfield land parcel in Kolkata. We have recently acquired approximately 7.48 acres of prime land in Alipore for a total consideration of INR 300 crores. The site is strategically located to provide excellent frontage, coupled with superior visibility and connectivity and is situated on the Diamond Harbour Road. It will provide us with ample opportunity to cater to the untapped consumption potential in the region and will be used for a retail-led mixed-use development. The land parcel has a development potential of approximately 1 million square feet in the first phase of the development, and we hope to make it operational sometime during FY '25, subject to local and municipal approvals. We shall undertake an office development here as part of the next phase and utilize the balance development potential of about 200,000 square feet. Our current pipeline of under-construction malls, which are Phoenix Millennium at Wakad in Pune, Phoenix Citadel in Indore, Mall of Asia in Hebbal, Bangalore and the Palladium in Ahmedabad, will take up our portfolio to approximately 12 million square feet. We had, in the past, stated our strategy to keep on adding at least 1 million square feet of retail to our portfolio every year post FY '24 when the under-construction projects will become operational. This greenfield development opportunity in Kolkata is the first such addition to our portfolio in 2021 and will add to our operational developments beyond 2024. A quick update on the GIC transaction that we had announced. Our partnership with the Government of Singapore Investment Corporation to set up a strategic investment platform is progressing as per schedule and the due diligence process is currently underway and expected to be completed shortly. We look forward to a quick closure on this transaction. A quick update on several digital initiatives that we have undertaken. You may be aware that we have recently launched a digital customer rewards program through our Phoenix Nhance app, where points accrued by customers by way of scanning their bills can be utilized to earn rewards and discount coupons, gift vouchers, et cetera. This program was successfully launched in Phoenix MarketCity, Chennai, and has now been extended to Phoenix Palladium in Mumbai and Phoenix MarketCity, Bangalore since December 2020. The app also provides various value-added services to enhance customer experience and engagement, such as curbside pickup, digital parking reservation, food-ordering services, video conferencing for selection of inventory at stores and home delivery. Parking facilities have also been extended as a membership benefit to all members. We have seen 6% of our consumption captured across these 3 locations through this app in January 2021, the first full month of operations. This will help boost our online sales and improve customer engagement, and we will be able to offer tailored shopping experiences to our patrons. We will soon be rolling out this initiative across our portfolio, and our goal is to capture 10% to 12% of consumption through this initiative in the next financial year. I will now request my colleague, Mr. Varun Parwal, to update you on the financial performance. Thank you. Before Varun comes on board, I would like to mention that I'm joined by my colleagues, Mr. Varun Parwal and Mr. Pawan Kakumanu, both Senior Vice Presidents, Finance, who have, for the last several years, had an oversight on the finance and accounts aspects of all asset classes and will continue in their role as deputy CFOs for the various asset classes under them. Moving on to Varun. Please cover the financial performance. Thank you. -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [3] -------------------------------------------------------------------------------- Thank you, Shishir. Good morning, ladies and gentlemen. Continuing with the briefing, which Shishir gave, I would like to share with you some of the key highlights of our consolidated financial performance. Despite the prevailing challenging business environment, we continue to maintain a robust balance sheet. Our consolidated debt stood at INR 44 billion as of 31st December 2020. This number has come down by about INR 2.3 billion since the end of September 2020. Our average cost of borrowing is down to 8.46% from 8.88% in September '20. This is a reduction of 42 basis points. On this point, I would like to further update you that the cost of debt in January 2021 is further down to 8.31%. We have a few loan repricing, which are expected to come up in the next few months, and we remain confident of further reporting a lower cost of borrowing in the coming quarters. Moving over to the financial updates for quarter 3 and 9 months of FY '21. Our income from operations for quarter 3 was INR 3.4 billion, which is 66% of Q3 FY '20. Our EBITDA for the quarter stood at INR 1.6 billion, which is at 61% of the same period last year. This quarter, we reported a profit after tax of INR 654 million. For 9 months FY '21, our income from operations was at INR 6.8 billion, our EBITDA stood at INR 3.2 billion, and we reported a small loss of INR 129 million. Giving you a quick update on our cash flow position as well. Across the portfolio, we had total cash inflows of about INR 364 crores for quarter 3 FY '21. Retail accounted for a significant majority of it. Retail collections, which were at about INR 130 crores for the first half, improved to INR 260 crores in quarter 3 FY '21. We have continued to see an improving trajectory in retail cash inflows even in January, wherein we saw cash inflows of INR 114 crores. We have been able to preserve our cash and ensure that our operating free cash flows are coming back. For quarter 3, we had an operating free cash flow of about INR 104 crores. With that, I would like to close our opening remarks, and we will open the call for the Q&A session. Thank you. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) The first question is from the line of Puneet from HSBC. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [2] -------------------------------------------------------------------------------- Congratulations on continued improvement here. My first question relates to the cash flows. Is it possible to get a better picture on cash flow in terms of how much did we spend for third quarter and 9 months as well? -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [3] -------------------------------------------------------------------------------- Sure, Puneet. Varun this side. Let me first start with our CapEx for the quarter. For quarter 3, we had a CapEx of about INR 100 crores and for the first 6 months, we had about INR 140 crores. So for 9 months, our number stands at INR 240 crores. We have also temporarily paid down our revolving credit facility. And in quarter 3, this number was INR 235 crores, and for the first 6 months, it was INR 102 crores. So for 9 months, this number stood at INR 337 crores. Apart from that, our operational cash flow -- our operating expenses were at about INR 260 crores. Does that answer your question in entirety? -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [4] -------------------------------------------------------------------------------- So you had INR 364 crore of collection, INR 260 crore of outflows. Is it -- so this is for Q3? -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [5] -------------------------------------------------------------------------------- This is for Q3. So our operating free cash flows were INR 104 crores. Out of that, we also spent on CapEx. We are currently funding our CapEx entirely through equity, and we spent INR 100 crores on CapEx. And besides this, we had some one-off payments. So if -- I can quickly run you through those. We paid an advance towards our Calcutta land parcel in the December quarter, which was about INR 25 crores. We continued to buy out some of the long-term tenancies on our Lower Parel land parcel, and we had an outflow of about INR 24 crores. And in our stand-alone results, we had 2 transactions, wherein we transferred the units which were owned by Phoenix Mills, in Art Guild House and Centrium. These were transferred to Offbeat. There was a stamp duty payout of about INR 7 crores there. And at our Lower Parel, we conveyed a part of the -- a UDS of the part of the land to our 100% owned subsidiary, which is Plutocrat, and again, there was a stamp duty incidence of about INR 7 crores there. If I add these expenses, we are looking at a number of about INR 63 crores. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [6] -------------------------------------------------------------------------------- Okay. So INR 364 crores inflow, INR 100 crore CapEx, down INR 260 crores operating expense, plus INR 63 crores of others, right? -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [7] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [8] -------------------------------------------------------------------------------- So... -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [9] -------------------------------------------------------------------------------- Sorry, Puneet. We did not catch you there. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- Puneet, we are not able to hear you. We'll move on to the next question, which is from the line of Parikshit Kandpal from HDFC Securities. -------------------------------------------------------------------------------- Parikshit D. Kandpal, HDFC Securities Limited, Research Division - Research Analyst [11] -------------------------------------------------------------------------------- Congratulations for a strong performance during this quarter and a strong recovery. My first question was on the -- so if you can highlight on what percentage of the occupancy we are approached or crossed the minimum guarantee -- normalized minimum guarantee during the quarter if at all? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [12] -------------------------------------------------------------------------------- Sorry, may I request you to repeat your question, Parikshit? -------------------------------------------------------------------------------- Parikshit D. Kandpal, HDFC Securities Limited, Research Division - Research Analyst [13] -------------------------------------------------------------------------------- Sir, I'm saying, for what occupancy in the properties, approximately ballpark, you would have crossed the MG of FY '20 -- for 3Q FY '20 -- compared to 3Q FY '20, what portion or occupancy of your malls would have crossed the MG, if at all? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [14] -------------------------------------------------------------------------------- So I think we have crossed the MG threshold in -- only in December, so not in the entire third quarter. So mainly in December and perhaps a little -- perhaps for a fewer stores in November. So I would say about 70% of the stores would have breached that MG threshold in the month of December. -------------------------------------------------------------------------------- Parikshit D. Kandpal, HDFC Securities Limited, Research Division - Research Analyst [15] -------------------------------------------------------------------------------- Okay. So the fourth quarter, sir -- I mean, you already said that Jan, you have crossed close to about 80% kind of consumption. So in the fourth quarter, are you looking at 85% to 90% rentals coming back versus 4Q FY '20? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [16] -------------------------------------------------------------------------------- Yes. I would say that we had a certain estimate in August that we had put forth where we had stated that -- our estimate was that in -- by the end of this financial year, we should be close to about 85%, 90% of FY '20 numbers. So yes, we should be somewhere in that range. -------------------------------------------------------------------------------- Parikshit D. Kandpal, HDFC Securities Limited, Research Division - Research Analyst [17] -------------------------------------------------------------------------------- Okay. Sir, coming to the acquisition, you have already announced one greenfield development, and you've had in the past said that you're looking at opportunities for inorganic acquisitions. Now with the consumption reviving across most of the malls and most of the operators, do you really still see or sense some opportunity, which could be available at a good valuation for you to take over? So if you can throw some light on the organic acquisition part. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [18] -------------------------------------------------------------------------------- So last year, in August, when we did the QIP, Parikshit, we had raised capital to shore up our balance sheet to withstand any surprises that the year would throw at us. And our stated intent was that once we see stabilization of our operating assets, we will look at deploying these funds in future growth opportunities. So the answer to your question is, yes, we are looking at opportunities, but being extremely cautious and selective in choice of location. And in case of greenfield, opportunity is the development size because our intent is to be the dominant consumption center wherever we intend to put up an asset. So there are opportunities both on greenfield and operating malls, which continue to come our way, and we evaluate them on a selective basis. -------------------------------------------------------------------------------- Parikshit D. Kandpal, HDFC Securities Limited, Research Division - Research Analyst [19] -------------------------------------------------------------------------------- Sir, this Kolkata property will be under which platform? I mean, it will be directly done by you or it will be through a platform with GIC or CPPIB? Sir, any thoughts on that? Have you finalized anything on that? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [20] -------------------------------------------------------------------------------- It's been acquired under 100% owned subsidiary of Phoenix Mills. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Next question is from the line of Kunal Lakhan from CLSA. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [22] -------------------------------------------------------------------------------- So just on the rental front for Q4, right? So last quarter, we had seen 63% of rental income vis-à-vis previous year's quarter. Q4, how should we look at this number, considering that we are already at 80%-plus level in terms of like the business, right? So would this number be closer to like 90%, 95%? Can we assume that? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [23] -------------------------------------------------------------------------------- Well, we would estimate it to be in excess of 80%. I would be a little cautious in indicating higher than that. Of course, we are working towards a much higher number. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [24] -------------------------------------------------------------------------------- Sure. And you had highlighted earlier also that once consumption cost is 80%, then you would go to the original agreement. So when you say go back to the original terms, is that both in terms of MG as well as revenue share or only in terms of MG? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [25] -------------------------------------------------------------------------------- Right. Before I answer this question, I want to just go back to your previous one and further clarify that when we compare to consumption compared to the previous year, the contribution from FEC, multiplex and even food and beverage is low. So that is impacting the consumption. Therefore, that is impacting our revenue share. And that is the reason why I remain cautious about giving any guidance above 80% on -- compared to last year. If content improves and -- I think that will significantly improve the revenue share coming in from the multiplexes. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [26] -------------------------------------------------------------------------------- Sure. But just, again, on the same question. So excluding the FECs and F&B and cinemas, the rest of the tenants, would the original agreements go back to the same minimum guaranty and revenue share terms? Or... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [27] -------------------------------------------------------------------------------- Yes. I think once we hit that 85%, 90% consumption across all stores, across the board, we will go back -- revert to original contractual terms and the interim waiver will not be -- will not continue. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [28] -------------------------------------------------------------------------------- But like you said, it's already at 90%, excluding those pain sectors. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [29] -------------------------------------------------------------------------------- Correct. So one has to look at the entire quarter and the performance there. In some of these -- in many of our tenants, for the month of January, we have already reverted for that particular month. But it's on a month-to-month test. It's based off a month-to-month test. So if in a particular month consumption drops at that center, then you will not revert to original contract for that month. But after 1st April, this will not stand. From 1st April, everybody moves back to contractual terms. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [30] -------------------------------------------------------------------------------- Got it. Got it. My second question was on the Kolkata acquisition. Can you give us some color on what will be the balance approval and construction cost for this? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [31] -------------------------------------------------------------------------------- Sure. So it's about 1 million square foot GLA development that we are looking at. The land cost was about INR 300 crore-plus, plus stamp duty, et cetera, et cetera. Construction is estimated to be at about INR 500-odd crore. And then there is also some premiums payable to avail of some certain FSI, which will be about INR 50 crore. We estimate the overall cost to roughly be -- for the first phase to be at about INR 885 crore, including the entire cost of land. And the expansion will be about INR 125 crore when we look at Phase 2. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [32] -------------------------------------------------------------------------------- Sure. And what are your rental expectations? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [33] -------------------------------------------------------------------------------- So I would say that there is a huge demand-supply gap in that city. And competing malls are currently in the range of about INR 100 and INR 150 a square foot. By the time this mall becomes operational in FY '25, even if we look at a low number of between INR 150 to INR 175 per square foot, I think it's a very attractive investment. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [34] -------------------------------------------------------------------------------- Sure. Sure. And one last question. This is 100% owned by us now. But post the GIC platform, do you think this will get moved to the platform? Or you will continue to hold this in entirety? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [35] -------------------------------------------------------------------------------- No. So this is currently not under any discussion with any -- with GIC. We will evaluate it in the future. I think we also have to put in some work and derisk the project on account of approvals, et cetera. And that -- if we evaluate any private equity investment in the asset, it would only be at that stage, I would like to say. -------------------------------------------------------------------------------- Operator [36] -------------------------------------------------------------------------------- Next question is from the line of Biplab Debbarma from Antique. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [37] -------------------------------------------------------------------------------- My first question is on the Kolkata property. Sir, if I'm not mistaken, this discussion is going on before pre-COVID. So just wanted to know whether anything has changed in the negotiation in terms of land valuation or payment structure pre-COVID and post-COVID. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [38] -------------------------------------------------------------------------------- There has been no change, Biplab. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [39] -------------------------------------------------------------------------------- Okay. So it is just a continuation of what has been -- what was there pre-COVID? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [40] -------------------------------------------------------------------------------- Yes, the parties have all delivered on what was agreed pre-COVID. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [41] -------------------------------------------------------------------------------- Okay. And the second question is on the pipeline. Just could you give us some insight what kind of pipelines you have at present where discussion is going on? And is there any plan to add more in this FY '22? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [42] -------------------------------------------------------------------------------- Yes. I think I answered this question previously when Parikshit asked this question. We continue to evaluate opportunities. If you're asking if there's a definitive pipeline, I don't have anything particular to highlight at this stage. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [43] -------------------------------------------------------------------------------- Okay. Sir, one final question, if I may. About the GIC, is the due diligence going on? Or what is the status? And by what time the transaction would be concluded? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [44] -------------------------------------------------------------------------------- We are now towards the lag end of due diligence. And then we will be working on closing the definitives. So I would say we are at the lag end of the transaction in this. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [45] -------------------------------------------------------------------------------- So another 3 months or so? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [46] -------------------------------------------------------------------------------- I would hesitate to put any timeline to it, but we are at the lag end. I don't think it should take more than a month to take it to closure. -------------------------------------------------------------------------------- Operator [47] -------------------------------------------------------------------------------- Next question is from the line of Pritesh Chheda from Lucky Investments. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [48] -------------------------------------------------------------------------------- Sir, I have 2 questions. One, over the next -- so in FY '23, if you could help us know what would be the commercialized retail area in square feet, which stands at INR 7 million today, and commercialized and operational -- commercial assets, which stand at about 1.3 million square feet today. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [49] -------------------------------------------------------------------------------- In FY '23, we will be able to add 1 million square feet to our mall portfolio in -- at Indore, that is, the Phoenix Citadel Mall at Indore. I hope to also see Ahmedabad coming up sometime in FY '23 towards the end of that year, which is roughly about 700,000 square feet GLA of retail. This is the Palladium in Ahmedabad. On the office, front, I think Tower 3 will become operational in the next few months. So that's going to be about 450,000 square feet being added to our office portfolio. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [50] -------------------------------------------------------------------------------- So 1.3 goes to about 1.8 in FY '23, basically? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [51] -------------------------------------------------------------------------------- Yes -- no, we also have Tower II, which is roughly around 250,000 square feet. So 250,000 square feet of Tower II plus 450,000, 700,000 square feet will get added. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [52] -------------------------------------------------------------------------------- Okay. Over the next 4 years, let's say, '23 and '24, based on the space addition program, the net -- the debt figure or the net debt figure, do you see it directionally going down? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [53] -------------------------------------------------------------------------------- Sorry, are you talking about our net debt figure of INR 4,400 crore? -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [54] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [55] -------------------------------------------------------------------------------- So we have -- yes, I would say that even going forward for some period at least, we are not looking at drawing down any additional debt on any of our construction projects. So I would like to say that it would stay in the range of INR 4,400 crore less whatever repayments come up in this FY '22. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [56] -------------------------------------------------------------------------------- And this is the net debt figure, right? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [57] -------------------------------------------------------------------------------- This is the net debt figure. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [58] -------------------------------------------------------------------------------- Okay. And my last... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [59] -------------------------------------------------------------------------------- Sorry, this is the gross debt figure. When you say net debt, are you referring to our economic interest in that? -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [60] -------------------------------------------------------------------------------- Sir, I was a bit confused. The net debt figure, which was there during quarter 2, was about INR 2,700 crores. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [61] -------------------------------------------------------------------------------- Correct. So it continues to remain at that -- the net debt continues to remain at that number, INR 2,700 crore. This is our economic interest if you look at the various shareholding. Gross debt is at INR 4,400 crore. I don't see that moving up for at least the next 2 quarters. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [62] -------------------------------------------------------------------------------- Okay. And my last question is, you were answering to one of the participants about 85% threshold and above, the rentals go back. Just keeping that discussion aside, any case, with effect 1st April 2021, everyone goes back to the original agreement, right? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [63] -------------------------------------------------------------------------------- That continues to be the fact even now. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [64] -------------------------------------------------------------------------------- And when they go back to the original agreement, they go back to the FY '20 rental or the escalated rental post FY '20? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [65] -------------------------------------------------------------------------------- Yes. So the contractual rental payable in FY '22 as per the escalations. -------------------------------------------------------------------------------- Pritesh Chheda, Lucky Investment Managers Private Limited - Analyst [66] -------------------------------------------------------------------------------- As per escalations. And what is the escalation of the 2 years? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [67] -------------------------------------------------------------------------------- See, it's about anywhere between 5% to 7% annual escalation. -------------------------------------------------------------------------------- Operator [68] -------------------------------------------------------------------------------- Next question is from the line of Mitesh Shah from Motilal Oswal. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [69] -------------------------------------------------------------------------------- This is Niket here from Motilal Oswal and not Mitesh. So 3, 4 questions. So first, on the new properties in the retail space that you're likely to commission in Ahmedabad, Pune going forward. What is a pre-lease rate right now versus pre-COVID? So for example, pre-COVID was 60, what is it now? So that's the first question. The second question was the revenue share percentage, will that be higher post 1st April versus what it was pre-COVID in terms of percentage rate? And the third question was on the GIC part, on the platform part of it. Is any money likely to accrue to Phoenix which will be used for debt reduction? Those will be the 3 questions. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [70] -------------------------------------------------------------------------------- Sure. So let me answer your second question first. In several cases where we have given a discount on fixed rental in this current financial year, after 1st April when we moved to contractual rent, in several cases, we have a higher revenue share to continue on for some period of FY '22 as well. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [71] -------------------------------------------------------------------------------- That's only for 1 year. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [72] -------------------------------------------------------------------------------- Yes, only for 1 year, there is a higher revenue share percentage and then that would fall away back to contractual rev share. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [73] -------------------------------------------------------------------------------- Okay. And what would be the percentage, sir? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [74] -------------------------------------------------------------------------------- It would be about 20% to 25% higher than the current rev share. So if somebody is at 10%, they would end up paying us 12% to 12.5% for that period. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [75] -------------------------------------------------------------------------------- Sure. And that would cover how much percent of your tenants? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [76] -------------------------------------------------------------------------------- About 40% to 50% of our tenants. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [77] -------------------------------------------------------------------------------- Okay. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [78] -------------------------------------------------------------------------------- Moving on to your first question, the average rental that we estimate across our various underdevelopment portfolio. See, during COVID, we have actually gone very slow on our leasing on several of these under-development projects simply because retailers were not being able to commit to it. But based on the pre-leasing achieved so far and our estimates going-forward basis our discussions with retailers, ongoing retailers, I would say that in Phoenix -- Palladium, Ahmedabad, we would estimate to be at an average rent of about INR 165 a square foot. At our Phoenix Millennium, Wakad, Pune, we should be in the range of about INR 120-plus per square foot. At Mall of Asia, Hebbal, Bangalore, we should be at the average of INR 160-plus. And at Phoenix Citadel, Indore, we should be at about INR 90-plus. This would be the first-year rental, rental in the first year of operations and then thereafter, of course, escalations would apply. We have continued to do new leasing at the operational malls with no changes to rental terms compared to the period prior to COVID. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [79] -------------------------------------------------------------------------------- Yes. And on the GIC question? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [80] -------------------------------------------------------------------------------- Sorry, would you like to repeat that question once again for me? -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [81] -------------------------------------------------------------------------------- On the GIC platform deal, is there some amount of money that Phoenix will take back from the platform and reduce its debt? Or the entire money remains in the platform for expansion? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [82] -------------------------------------------------------------------------------- No, the final investment structure is being utilized. I think we have to look at the fine balance between growth capital at that platform level itself and creating liquidity at Phoenix. As you are aware, we have adequate free cash invested in Phoenix. So we are not seeing the need to utilize -- to really take more cash at the enterprise level. All the free cash that we have has been invested in a significant -- a sizable amount of that has been parked in our revolving credit facility. So we've reduced the overdraft drawn for the moment, but that liquidity continues to remain available to us. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [83] -------------------------------------------------------------------------------- Got it. And one final question if I may squeeze in. There has been reduction in premium in Maharashtra. So how do you plan to -- I mean how do you look at that as an opportunity for us? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [84] -------------------------------------------------------------------------------- So we have previously given information about our potential development at Lower Parel at -- with a project that we call Project Rise, which is a 1 million square foot commercial office and retail mixed use. There we have -- we estimate our costs coming down on account of the reduction in premium. -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [85] -------------------------------------------------------------------------------- And what would be the benefit, roughly, if you would like to quantify that, before the regulation and now after the regulation? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [86] -------------------------------------------------------------------------------- Sorry, you're not very clear. May I request you to repeat that? -------------------------------------------------------------------------------- Niket H. Shah, Motilal Oswal Asset Management Company Limited - VP & Associate Fund Manager [87] -------------------------------------------------------------------------------- What would be the difference in terms of savings previously versus now? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [88] -------------------------------------------------------------------------------- It could be anywhere in the range of about INR 400 crore on premiums and development charges. -------------------------------------------------------------------------------- Operator [89] -------------------------------------------------------------------------------- Next question is from the line of Rajesh Disale from SBI Mutual Fund. -------------------------------------------------------------------------------- Rajesh Disale, [90] -------------------------------------------------------------------------------- Just one question. The Kolkata mall, what is the idea there? What kind of place -- I mean, we'll be having a Phoenix MarketCity or (inaudible)? So what I want to understand is, will it be a premium mall or a mass [market mall]? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [91] -------------------------------------------------------------------------------- So the location is fantastic, Rajesh. It's in the heart of, I would say, the old wealthy part of the city, Alipore, Ballygunge, Tollygunge, Park Street, Camac Street. Even the eastern corridor through the Maa Flyover has become easily accessible. So it's a very, very well-placed location. It's commanding of a premium to high-end to bridge-to-luxury kind of a format. -------------------------------------------------------------------------------- Rajesh Disale, [92] -------------------------------------------------------------------------------- Okay. Yes. Right. So actually, one more question. And what kind of IRR threshold did you guys use for this Calcutta land? And for your future acquisitions also, like, what are your IRR thresholds? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [93] -------------------------------------------------------------------------------- See, we look at -- I would say, in terms of the leveraging, we look at each location differently. So better metrics for us to be -- would be yield on cost. So we expect -- at least our model underwrites an yield on cost in the first year of about 15% to 16%. And by third year, when it stabilizes, typically, it should be in excess of 20% to 22%. -------------------------------------------------------------------------------- Rajesh Disale, [94] -------------------------------------------------------------------------------- 20% to 22%? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [95] -------------------------------------------------------------------------------- Yes. -------------------------------------------------------------------------------- Operator [96] -------------------------------------------------------------------------------- Next question is from the line of Karan Khanna from AMBIT Capital. -------------------------------------------------------------------------------- Karan Khanna, AMBIT Capital Private Limited, Research Division - Analyst [97] -------------------------------------------------------------------------------- Shishir, on the Alipore land acquisition, when you look at the broader demographics of the city, do you feel that with the highest proportion of aging population of more than 12%, lowest proportion of [losing the rent deals] at sub-20% and lowest volatility rate amongst all the metros, Kolkata is actually a good market to be in 5 years out? And as a follow-up, is there now a change in strategy from entering a Tier 1 opportunity to a Tier 1 city? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [98] -------------------------------------------------------------------------------- Yes. I think as a city, Calcutta is very exciting for us simply because of the very low demand -- very low supply and a huge demand from retailers for presence there. So we have based our decision -- aside from factoring in our own primary research in the city, we have also looked at where the retailers are looking for the best quality, best-in-class retail assets to be a part of. The demographics of the city clearly support at least 5 to 6 malls of a 1 million square feet in the city. And as on date, there is literally only 1 million square foot mall, which is there in the city. It's slightly lower than 1 million square feet. It's actually about 650,000-odd square feet. So for a district-dominant consumption center, there is a huge demand at this location. -------------------------------------------------------------------------------- Karan Khanna, AMBIT Capital Private Limited, Research Division - Analyst [99] -------------------------------------------------------------------------------- So on the acquisition cost, we understand the recent deals, although of smaller sizes in and around Alipore, have been transacted at an average INR 20 crores to INR 30 crores per acre. So do you believe you have overpaid for the land parcel or you feel that, given scarcity of large land parcels in that location, INR 40 crores an acre is a good price for a land parcel of that size? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [100] -------------------------------------------------------------------------------- See, there is -- in that particular micro market, there is very limited large land parcels. In fact, there is virtually no large land parcel which can support development of 1 million square feet plus. I believe that we have negotiated a very, very fair price. It also is -- if you just look at the land records and the ready reckoner value in that location, it's in the similar range. I don't believe that we have overpaid at all. I think we've paid fair price for it. -------------------------------------------------------------------------------- Karan Khanna, AMBIT Capital Private Limited, Research Division - Analyst [101] -------------------------------------------------------------------------------- Okay. And lastly, what we also understand is that while Alipore is amongst the most post residential areas, what we have also picked up is that unlike most of the large metros, connectivity is not an issue in Calcutta, and most of the citizens have a preference for traveling towards Park Street up north and Salt Lake in the North Eastern belt, given better social avenues in these markets. Moreover, given existing strong consumption that is happening at South City and Forum Malls, do you believe -- do you feel there is enough room for another 1 million square feet mall in that market? Especially since most of the development is now happening towards the north end of the city, especially in areas like [Rajarhat] and so on. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [102] -------------------------------------------------------------------------------- Okay. So as I mentioned, I think, a, we are -- in our immediate proximity, we have the wealthiest residents of Calcutta. With the improved connectivity with the Maa Flyover, I believe that even the Eastern part of the city will gravitate towards this location. There is enough of an immediate catchment, which will -- which can support this development. We are very conscious of our competition in the city. And I think our product will be a differentiator, both in terms of design and in terms of the brand mix. It's been -- I think when we look at our business, we provide -- I think we have representation from all consumption categories of retail -- of customers' wallet spend in our malls. And I think that drives the consumption at our centers more. And that will be the attraction for the city to gravitate to this location. -------------------------------------------------------------------------------- Operator [103] -------------------------------------------------------------------------------- Next question is from the line of Atul Mehra from Motilal Oswal Asset Management. -------------------------------------------------------------------------------- Atul Mehra, Motilal Oswal Financial Services Limited - Fund Manager [104] -------------------------------------------------------------------------------- So just one question. In terms of REIT as a particular platform, with, I think, a little bit more favorable regulatory environment and taxation environment now, do you think some of our mature assets, we would be keen to put it into a REIT in the next foreseeable period? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [105] -------------------------------------------------------------------------------- I would say that we are very -- we find the REIT structure as a very attractive financing structure for us going forward in the future, and we would be open to evaluating that. Clearly, at this -- I would say that considering the current environment, we may need to just wait it out for a little while before we explore going down that path. -------------------------------------------------------------------------------- Atul Mehra, Motilal Oswal Financial Services Limited - Fund Manager [106] -------------------------------------------------------------------------------- Right. Right. And sir, just a follow-up in terms of like some of our discussions in the past around being, say, debt-free at some point in time. So anything that we would have thought further on those lines in terms of the capital structure of the company going forward? Are we like determined to take this company to being debt-free at some point in time in the future? -------------------------------------------------------------------------------- Varun Jagdish Parwal, The Phoenix Mills Limited - SVP of Finance & IR [107] -------------------------------------------------------------------------------- Atul, Varun this side. Atul, our gross debt on our portfolio today is about INR 4,400 crores. And this debt is -- majorly, 99% of this is on our operational assets, wherein the cost of borrowing is down to 7.5%. If you look at our share and if you look at net debt and our Phoenix share of net debt, we are looking at about INR 2,700 crores, be in that number. Now on our operational assets, given the steady rental profile and the NOI flow-through, we are seeing some very attractive rates as well as the risk assessment of these assets is perceived to be very low, which enables us to get some good long-term financing options. As far as our under-construction assets are concerned, so far, we have spent INR 3,200 crores in financing these assets. And I'm now taking Lucknow out of this. And the financing for whether the offices in Pune or the assets under the alliance with CPPIB have now been done mainly through equity so far. And if I have to put a number, the equity that we have spent on these assets so far is about INR 2,800 crores. So we remain cognizant of the fact that we have to utilize debt prudently, and we have to strike the right balance on the leverage that we are taking, but we also don't want to lose out on the opportunity for the low pricing and the comfortable repayment options that we are getting on the operational assets. -------------------------------------------------------------------------------- Atul Mehra, Motilal Oswal Financial Services Limited - Fund Manager [108] -------------------------------------------------------------------------------- Right. Got it. And just one final question. In terms of other inorganic opportunities that we were exploring, so over and above what we have planned now in terms of greenfield in Calcutta, what is the thought process in -- at this point in time for the other M&A opportunities you were exploring for the last few months and quarters? And anything that we are getting towards in terms of a closure on any further M&A? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [109] -------------------------------------------------------------------------------- Atul, this is Shishir, again. No, at present, I don't think we have anything very definitive to share with you. -------------------------------------------------------------------------------- Operator [110] -------------------------------------------------------------------------------- Next question is from the line of Abhishek Bhandari from Macquarie. -------------------------------------------------------------------------------- Abhishek Bhandari, Macquarie Research - Analyst [111] -------------------------------------------------------------------------------- Shishir, I had a question on your project price. So could you update us what's the status in terms of approvals there? Especially, given that somebody else asked the windfall from the premium cut could be INR 400 crores, which you mentioned, so in that context, would you want to buy the premiums altogether before December? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [112] -------------------------------------------------------------------------------- So in terms of the status of approval, we have the initial layout approval from the [UD]. And we are currently working on our submission plans, after which we will be making payments for the premiums, et cetera. So clearly, to avail of the benefits, one will have to make these premium payments by the end of this calendar year. We have -- I think we are very confident that we'll be able to progress very swiftly on the approvals once we've finalized our submission plans. -------------------------------------------------------------------------------- Abhishek Bhandari, Macquarie Research - Analyst [113] -------------------------------------------------------------------------------- Okay. And Shishir, second question is on your residential projects. I think it's something like a noncore for you now, and it has been there for quite a while. There has been a pickup in the consumer sentiment, the sales have risen, which is also getting reflected in your own numbers. So any plans to quickly get out of that Bangalore resi and use that cash into your core areas like Project Rise or maybe some other opportunities (inaudible) side. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [114] -------------------------------------------------------------------------------- So Abhishek, the sales velocity has picked up significantly in the completed -- for the completed inventory that we have there, right? Currently, we have only 1 tower which is under construction, which is Tower 7. Towers 1 through 6 are all complete. Kessaku is complete. Towers 8 and 9, we are yet to construct and launch and construct. So really, what remains is under-development, unsold inventory in Tower 7 is roughly around 240,000 square feet, unsold inventory in Tower 7. And in Kessaku, we have a sizable inventory, and we've seen a huge pickup in the sales velocity there. So I would say that the next 24 months look very promising to be able to sell off all of this inventory that we have under construction. -------------------------------------------------------------------------------- Operator [115] -------------------------------------------------------------------------------- Next question is from the line of Manish Agrawal from JM Financial. -------------------------------------------------------------------------------- Manish Agrawal, JM Financial Institutional Securities Limited, Research Division - Research Analyst [116] -------------------------------------------------------------------------------- It's more of a clarification question. On the multiplex, you had mentioned in the last call that 75% rental waiver for this quarter Q3, and going forward in Q4, 50% rental waiver on the fixed cost, and the rev share would go from 17% to 22%. So is the status same? And going forward in FY '22, what would be the status? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [117] -------------------------------------------------------------------------------- It's the same. There is no change in the status. And in FY '22, we will revert to contractual rent. In a few of our locations, we have a higher revenue share for some part of FY '23 -- sorry, FY '22. -------------------------------------------------------------------------------- Manish Agrawal, JM Financial Institutional Securities Limited, Research Division - Research Analyst [118] -------------------------------------------------------------------------------- FY '22. So higher would be in the range of 20%, 22%, you mean? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [119] -------------------------------------------------------------------------------- In the case of multiplex, it may be actually 10%, 10% to 15% higher. -------------------------------------------------------------------------------- Manish Agrawal, JM Financial Institutional Securities Limited, Research Division - Research Analyst [120] -------------------------------------------------------------------------------- So in FY '20, what used to be the component, the fixed component... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [121] -------------------------------------------------------------------------------- If it was 18%, it moves up to a -- for a part of FY '22, it may move up to about 21% to 22%. This is not the case across all locations. It's at a few locations. -------------------------------------------------------------------------------- Operator [122] -------------------------------------------------------------------------------- Next question is from the line of Alpesh Thacker from Motilal Oswal. -------------------------------------------------------------------------------- Alpesh Thacker, Motilal Oswal Securities Limited, Research Division - Equity Research Analyst of Institutional Equities [123] -------------------------------------------------------------------------------- Most of my questions have been answered. Just one question. So have we seen any major exits as a result of pandemic across any of our assets? So any vacancy... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [124] -------------------------------------------------------------------------------- We have not seen any major exit in our retail portfolio nor in our office portfolio. I would say that there are the smaller stores, which may contribute to about 4% to 5% at the higher side, smaller stores in F&B, where we've seen some exits. -------------------------------------------------------------------------------- Alpesh Thacker, Motilal Oswal Securities Limited, Research Division - Equity Research Analyst of Institutional Equities [125] -------------------------------------------------------------------------------- Okay. So are we talking to other clients, potential clients for filling up those vacancies? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [126] -------------------------------------------------------------------------------- Yes, of course. -------------------------------------------------------------------------------- Alpesh Thacker, Motilal Oswal Securities Limited, Research Division - Equity Research Analyst of Institutional Equities [127] -------------------------------------------------------------------------------- Okay. Okay. And one last kind of follow-up on this. So are we in talks with any of the major brands which would like to launch in India as we move back to normalcy? So any of these trends are you looking at? So any major brands that would come up? Because we being one of the best retail asset portfolio holders in the country, so probably we would be the preferable brand to partner with. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [128] -------------------------------------------------------------------------------- So I think there are still about 100-odd brands list that we have, which are under discussion. I would not say under discussion, which are -- which I would say are potentially looking at expansion into India. They may already be in India or they may be looking at an expansion. So -- but I think one just has to wait for all -- at least our new developments. One has to wait for a couple of -- maybe a quarter more to see normalization before we start pre-leasing our -- or continue with the pre-leasing of our new development. For projects which are -- for assets which are already operational, we are in constant discussions with brands. There are quite a few who are looking at entering India for the first time through our gateway malls. -------------------------------------------------------------------------------- Operator [129] -------------------------------------------------------------------------------- Ladies and gentlemen, due to time constraint, that was our last question. I now hand the conference over to Mr. Shrivastava for closing remarks. Over to you, sir. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [130] -------------------------------------------------------------------------------- Thank you all for joining us today and wish you all the very best. Hopefully, the next few months, we will be able to demonstrate a far better performance and look forward to catching up at the next call. -------------------------------------------------------------------------------- Operator [131] -------------------------------------------------------------------------------- Thank you very much, members of management. Ladies and gentlemen, on behalf of the Phoenix Mills Limited, that concludes today's conference call. Thank you all for joining us, and you may now disconnect your lines.