Phoenix Mills Acquires Full Control of Island Star JV in ₹5,449 Crore Deal

The Phoenix Mills Limited announced its decision to acquire Canada Pension Plan Investment Board's 49% stake in their joint venture Island Star Mall Developers for over ₹5,449 crore, effectively transforming the entity into a wholly owned subsidiary.

Strategic Acquisition Details

The retail-led mixed-use realty developer revealed that the total consideration to CPP Investments would be disbursed over 36 months through four separate tranches. This acquisition will elevate Phoenix Mills' ownership in ISMDPL from 51% to complete ownership at 100%.

Company officials explained that the deal structure encompasses a combination of buyback mechanisms, capital reduction, dividend payouts by ISMDPL, and secondary share purchases by Phoenix Mills or its affiliates. The payment amount may undergo adjustments in case of prepayment of any tranche.

Leadership Perspectives on Partnership Evolution

Atul Ruia, chairman of Phoenix Mills, stated that ISMDPL represented the foundation of their enduring partnership with CPP Investments. He mentioned that what began with a single asset had evolved into a comprehensive portfolio spanning key urban centers across India. As the company consolidates its stake, Ruia emphasized their commitment to building upon this established foundation while expressing appreciation for CPP Investments' contribution to shaping the platform. He indicated the company's intention to continue their partnership through other ventures.

Current Portfolio Performance

ISMDPL, established through the collaboration between Phoenix Mills and CPP Investments, manages a portfolio of retail-led mixed-use assets across major Indian cities. The platform currently operates 4.4 million square feet of retail space, which generated over ₹617 crore in operating profit during 2024-25, primarily from four operational malls.

Future Expansion Plans

Shishir Shrivastava, Managing Director of Phoenix Mills, described the transaction as enabling them to consolidate complete ownership of high-quality, retail-led mixed-use assets across key Indian cities. He characterized ISMDPL as having developed into a robust platform featuring scale, stability, and clear future growth visibility.

Shrivastava outlined ambitious expansion plans for the coming years, indicating the platform would encompass over 5.2 million square feet of retail space, approximately 4 million square feet of office space development, and two to three hotels containing approximately 1,000 keys.

Development Timeline and Land Holdings

According to company leadership, the platform already possesses the necessary land and development rights to execute this comprehensive plan. A completed office portfolio spanning 2.2 million square feet across Pune and Bengaluru is anticipated to begin contributing from 2025-26.

Additional development phases, including second-phase retail and office developments alongside the Grand Hyatt Hotel in Bengaluru, are expected to become operational between 2026 and 2027. These additions are projected to contribute to sustained operating profits and cash flows while maintaining a healthy leverage profile.

Ongoing Joint Ventures

The company maintains several continuing joint ventures, including Mindstone Mall Developers, which is developing the Phoenix Grand Victoria mall in Kolkata, and Plutocrat Commercial Real Estate, responsible for Project Rise, an office-led development in Mumbai's Lower Parel district.

Future Partnership Opportunities

Phoenix Mills expressed its intention to explore future opportunities with CPP Investments through these continuing partnerships. Beyond completed and under-development assets, ISMDPL retains balance floor space index potential across its existing hubs in Bengaluru, Pune, and Indore.

This acquisition reflects the broader trends in India's mall expansion and the growing confidence of developers in consolidating their retail portfolios.