Phoenix Mills Ltd — Q4 FY26

Phoenix Mills Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=xWeFBM5wlvQ Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the Q4 FY26 results conference call of the Phoenix 0:09 9 seconds Mills Limited. As an opportunity, as a reminder, all participant lines will be in the listenon mode and there will be 0:17 17 seconds an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:25 25 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now 0:33 33 seconds hand the conference over to Mr. Shishi Shivasawa. Thank you and over to you sir. 0:41 41 seconds Good morning everyone and thank you for joining us. FY26 was a year of strong operating performance and an important 0:49 49 seconds transition year for the Phoenix Mills Limited. 0:53 53 seconds We delivered consolidated revenue of 4,423 cr and an IITa of 2,637 1:04 1 minute, 4 seconds cr rupees up 16% and 22% respectively reflecting a healthy broad-based growth across our portfolio. 1:16 1 minute, 16 seconds Importantly, we delivered this performance without adding any new retail capacity during the year. 1:23 1 minute, 23 seconds This performance underscores the strength of our retailled mixeduse platform. Retail consumption gained momentum in the second half of this 1:31 1 minute, 31 seconds financial year and continued to scale meaningfully during quarter 4. Offices saw strong leasing momentum across newly 1:39 1 minute, 39 seconds delivered assets. Residential sales provided incremental cash flows and hospitality remained resilient despite a challenging backdrop. 1:50 1 minute, 50 seconds Underlying operating leverage improved across segments and operating cash flows remained robust, supporting both growth 1:58 1 minute, 58 seconds investments and first branch payment for the CPP stake acquisition in ISM DPL while maintaining disciplined leverage. 2:09 2 minutes, 9 seconds Over the past year, we have also taken key steps to strengthen our growth trajectory for the long term. 2:15 2 minutes, 15 seconds consolidating ownership in highquality assets, progressing large under construction developments and building depth across leadership and operations. 2:25 2 minutes, 25 seconds Our focus remains on ensuring that this platform continues to compound sustainably through disciplined capital allocation, strong governance and consistent execution. 2:36 2 minutes, 36 seconds With that con context, I will now hand over to Rashmi who will walk you through the retail performance and key drivers in more detail. Over to you Rash. 2:50 2 minutes, 50 seconds Thank you Shashir and good morning everyone. 2:53 2 minutes, 53 seconds Retail continues to be the core engine of Phoenix portfolio and FI26 was an extraordinary year for the business. 3:02 3 minutes, 2 seconds Leasing remained exceptionally strong. 3:05 3 minutes, 5 seconds During FI26, we completed approximately 920 deals covering 3.2 million square ft. 3:12 3 minutes, 12 seconds We opened over 400 new stores across the portfolio in FI26. 3:17 3 minutes, 17 seconds This includes several marquee brands like Apple, IKEA, Uniqlo, Bushka, Rolex, Golden Goose, Lego, Victoria, Secret, 3:25 3 minutes, 25 seconds Onitsuka, Tiger, Flagship Store of Lifestyle, Tanish, Azorte, Game Palasio and Pantaloon among several others. 3:34 3 minutes, 34 seconds These launches have further strengthened the positioning of our malls as the preferred destination for leading global 3:41 3 minutes, 41 seconds and domestic brands. On the FNB front, we introduced an experience-led concept gourmet village at Phoenix Paladium 3:49 3 minutes, 49 seconds which is now being replicated across our portfolio starting with PMC Bangalore and Phoenix Palasio. 3:56 3 minutes, 56 seconds Rentals continue to grow steadily. 3:58 3 minutes, 58 seconds Retail rental income for the year grew to 2,157 crores. up 10% year-on-year without any 4:06 4 minutes, 6 seconds area addition in the portfolio during the year. Revenue share income also improved meaningfully reflecting healthy tenant trading performance. 4:16 4 minutes, 16 seconds At the asset level, Phoenix Padium delivered 461 crores of rental income growing 14% yearon-year. 4:24 4 minutes, 24 seconds at both our Phoenix Market City Bangalore and Phoenix Market City Pune centers. Over three lakh square feet of area at each mall has undergone strategic repositioning. 4:35 4 minutes, 35 seconds These churns and new deals will result in a strong double-digit rental growth in the upcoming year. 4:41 4 minutes, 41 seconds Phoenix Palasio entered its fifth year of operations, triggering a renewal cycle which enabled us to achieve over 4:48 4 minutes, 48 seconds 20% rental growth across 120 renewal and new deals. 4:54 4 minutes, 54 seconds This uplift will flow through in the coming periods. 4:58 4 minutes, 58 seconds Our newer assets also continue to gain traction with Phoenix Mall of Asia delivering 33% growth in rentals and 5:05 5 minutes, 5 seconds Phoenix Mall of Millennium delivering 22% growth in rentals in FI26. 5:11 5 minutes, 11 seconds We maintained strong cost discipline during the year. We continue to keep a very close eye on expenses while 5:19 5 minutes, 19 seconds ensuring the quality of customer experience across our assets is preserved. 5:24 5 minutes, 24 seconds Renewable energy now supports a meaningful share of our retail energy needs, delivering tangible savings. 5:31 5 minutes, 31 seconds At the same time, we transition to more targeted and smarter marketing campaigns, which has helped us optimize spends while continuing to drive strong customer engagement and footfalls. 5:43 5 minutes, 43 seconds All such initiatives have translated into robust AITA growth. Retail EITA for FI26 was 2246 5:51 5 minutes, 51 seconds crores, growing 12% yearonear. This improvement reflects both strong topline income growth and operating leverage 5:59 5 minutes, 59 seconds coming through from a discipline cost management. 6:02 6 minutes, 2 seconds Finally, consumption continues to be a clear outlier. Retail consumption reached an all-time high of rupees 6 6:10 6 minutes, 10 seconds thou 16,587 crores growing 21% yearonear while Q4 6:17 6 minutes, 17 seconds consumption grew 31% demonstrating strong momentum across the portfolio. 6:22 6 minutes, 22 seconds From a category perspective, fashion and accessories which contributes nearly 60% of our area grew by 16% during the year. 6:30 6 minutes, 30 seconds Cinema and entertainment delivered 22% growth while jewelry and electronics grew by over 30% reflecting both 6:38 6 minutes, 38 seconds premiumization and healthy discretionary demand. 6:42 6 minutes, 42 seconds What is equally important is the quality of that growth. Even as Q4 consumption moderated sequentially, retail rentals 6:50 6 minutes, 50 seconds remains largely stable and retail EIA was essentially flat quarter on quarter. 6:56 6 minutes, 56 seconds This reflects the structural protection of our lease model and it is the same model that creates the runway for accelerated rental growth as leases 7:04 7 minutes, 4 seconds reset over the next two to three years on rentals. Specifically, rental income grew 14% this year on an already strong 7:12 7 minutes, 12 seconds base. The gap versus consumption growth reflect three factors. First, our MG plus revenue share le structure is 7:20 7 minutes, 20 seconds designed to protect downside and capture upside as consumption scales which creates a natural lag in the near term. 7:28 7 minutes, 28 seconds Second, newer assets like Mofasia and Mall of Millennium are still in their ramp up phase and will converge over time. 7:36 7 minutes, 36 seconds Third, seasonal consumption growth in Q4 was driven by categories such as jewelry and electronics, which are high volume 7:44 7 minutes, 44 seconds categories that carry structurally lower revenue share ratios. With 36 to 50% of 7:51 7 minutes, 51 seconds our portfolio area coming up for renewal over the next two to three years, the conversion of consumption growth into rental growth has a clear and near-term catalyst. 8:01 8 minutes, 1 second As we look ahead, leasing transaction at our under construction assets remains encouraging with Phoenix Grand Victoria 8:08 8 minutes, 8 seconds and Kolkata already at 79% leased and Phoenix Surat at 41% leased. Combined 8:15 8 minutes, 15 seconds with upcoming expansions of existing assets and visibility of pipeline extended through 2030, we are well positioned for a sustained double growth in retail earnings over the next phase. 8:27 8 minutes, 27 seconds I will now hand the call over to Vun to walk you through the other business highlights. Thank you. 8:38 8 minutes, 38 seconds Thank you Rashmi. I will now take you through the performance of our office business followed by a brief update on hotels and our under construction 8:47 8 minutes, 47 seconds assets. Over the past 2 years, our office platform has undergone a meaningful transformation in both scale 8:54 8 minutes, 54 seconds and quality. From a portfolio of approximately 2 million square ft spread across Mumbai and Bona in FY24 9:04 9 minutes, 4 seconds we have now expanded to nearly 4.8 million square ft² today across four cities Mumbai, Puna, Bangalore and 9:12 9 minutes, 12 seconds Chhattn with three large grade developments that were delivered during 2025. 9:18 9 minutes, 18 seconds Each office asset is integrated within our destination retailled campuses offering occupiers access to a 9:25 9 minutes, 25 seconds differentiated amenity rich environment that is increasingly valued by leading corporates. 9:32 9 minutes, 32 seconds Alongside scale, we have remained focused on quality with all new developments having the best-in-class 9:39 9 minutes, 39 seconds energy efficiency measures and are designed to support collaborative future ready workplaces. 9:48 9 minutes, 48 seconds FI2 T6 also marked a strong year for the office leasing execution. Gross leaving for the year stood at over 2.2 million 9:57 9 minutes, 57 seconds square ft and our portfolio occupancy on this 4.8 million square ft increased to 70%. 10:04 10 minutes, 4 seconds Within this our mature operational assets saw occupancy rise to 83% up substantially from 67% at the start of 10:14 10 minutes, 14 seconds the year. While the offices completed during 2025 saw lease occupancy ramping 10:20 10 minutes, 20 seconds up to 62% from a very low base at the beginning of the year. This pace of absor absorption compares favorably with 10:28 10 minutes, 28 seconds market benchmarks for newly delivered grade office spaces. 10:33 10 minutes, 33 seconds For the year, our operational office portfolio in Mumbai and Punea generated income of 213 crores with AIDA of about 10:41 10 minutes, 41 seconds 141 crores reflecting steady growth even as a significant portion of leasing occurred in Uly operational assets. 10:50 10 minutes, 50 seconds As is typical in the office business, leasing activity leads income recognition with a time lag. With the 10:57 10 minutes, 57 seconds leasing achieved during FI26 and the pipeline already in place, we now have clear visibility on income ramping up 11:05 11 minutes, 5 seconds and overall occupancy progressing towards 90% over the next few quarters. 11:10 11 minutes, 10 seconds We expect some meaningful step up in render income and IITA from FY27 onwards. 11:17 11 minutes, 17 seconds Turning briefly to hotels, FY26 was a year of resilience amid a more cautious macro environment. Quoter income grew 8% 11:26 11 minutes, 26 seconds to 596 crores while IITA increased significantly by 14% to 276 crores 11:34 11 minutes, 34 seconds reflecting strong operating discipline and the inherent quality and standing of our assets in their respective micro markets. 11:43 11 minutes, 43 seconds The Saint Reges Mumbai continued to perform uh outperform the market with AITA margins improving to 49% and 11:51 11 minutes, 51 seconds average room rates in excess of uh 21,000 rupees supported by strong occupancy underscoring its premium positioning and pricing power. 12:03 12 minutes, 3 seconds Kodiar by Marad Agra also remained resilient sustaining occupancies in the high 70s and maintaining stable margins 12:09 12 minutes, 9 seconds despite a softer uh bash crop for the overall city. 12:16 12 minutes, 16 seconds Rashmi spoke about Kolkata and Surat and both of these assets are targeted for uh becoming operational during FY28. Let me 12:24 12 minutes, 24 seconds also give you a quick update on our other developments across tane, cobat and chundigar where we have moved from approver stage into execution. 12:36 12 minutes, 36 seconds At tane we have received the environmental clearance, clearance and other necessary approvers and we have onboarded the excavation contractor with 12:44 12 minutes, 44 seconds excavation expected to commence at the site shortly. At Coimat or requisite approvers are in place and excavation at 12:52 12 minutes, 52 seconds the site commenced from quarter 4 onwards and similarly at Chandigar or requisite approvers have been obtained and 13:00 13 minutes pre-construction works have already been initiated across all three locations we are following our established development 13:08 13 minutes, 8 seconds discipline wherein we secure all required approvers finalize our design and cost frameworks enter a significant 13:16 13 minutes, 16 seconds part of the construction cost before we commence construction. This approach gives us confidence on timeline and 13:23 13 minutes, 23 seconds visibility on cost and also ensures quality of execution as these projects progress. 13:30 13 minutes, 30 seconds With that, I will now hand the call over to Kalash who will take you through our residential portfolio and overall financial performance. 13:39 13 minutes, 39 seconds Thank you Arun. Good morning everyone. 13:42 13 minutes, 42 seconds I'll take you through our RAI performance and then briefly touch upon overall financial position and capital allocation. 13:49 13 minutes, 49 seconds FY26 was a strong year for our RAI business both in terms of sales momentum and cash generation. 13:57 13 minutes, 57 seconds It is important to note that we approach residential uh development with a clear strategic lens. It is not a capital 14:05 14 minutes, 5 seconds intensive growth engine nor does it compete with uh for capital with our annity businesses. Instead we use Razi 14:14 14 minutes, 14 seconds selectively as a cash generating vertical monetizing highquality inventory in mature micro market. 14:23 14 minutes, 23 seconds Gross resi booking for the year doubled to rupes 471 cr with collection closely 14:29 14 minutes, 29 seconds tracking at 467 cr. Vi recognized during the year stood at 489 total sales. 14:38 14 minutes, 38 seconds This performance was driven primarily by our premium residential project in Bangaluru one Bangalore West and Kasaku 14:48 14 minutes, 48 seconds which continue to see healthy demand and pricing resilience for ready inventory with average realization pricing around 28 29,000 per square ft. 14:58 14 minutes, 58 seconds At a growth level, FY26 reflects strong financial compounding consolidated 15:05 15 minutes, 5 seconds revenue for the year grew at 16% to 4,423 Cridas 15:12 15 minutes, 12 seconds grew faster uh at 2,637 cr up by 22%. 15:20 15 minutes, 20 seconds driven by operating leverage across retail, office and hotel. Net profit 15:26 15 minutes, 26 seconds after tax for the year stood at 1,557 cr up by 20%. 15:32 15 minutes, 32 seconds Operating free cash flow after working capital, tax and interest at was at 2,140 cr up by 23%. 15:43 15 minutes, 43 seconds FY26 was al also a year of elevated capital deployment and investment in growth for our next phase. The most 15:51 15 minutes, 51 seconds significant transaction was the buyout of CPP transaction state in uh ISML which uh which will result into full 16:00 16 minutes ownership of a high growth cap uh high quality cash generation platform. 16:05 16 minutes, 5 seconds Alongside this we invested approximate 1,035 cr rupes in construction and development across all the retail 16:12 16 minutes, 12 seconds assets, retail and office asset and a further 431 cr toward the land and development rights in existing projects. 16:21 16 minutes, 21 seconds Despite the uh level of uh investment, the balance sheet remain firmly under control. Gross debt at uh stand at uh 16:31 16 minutes, 31 seconds 5,164 cr with a net debt of 3,160 cr. Net date 16:37 16 minutes, 37 seconds to ratio which was 1.24 uh last year has improved to 1.19x this year even after 16:45 16 minutes, 45 seconds factoring the ISML acquisition and peak construction capex. This reflect the strength of our operating cash flow and 16:52 16 minutes, 52 seconds our disciplined approach to capital allocation. 16:56 16 minutes, 56 seconds We as a look ahead we remain focused on converting our scale into sustainable earning and cash flow growth funding 17:05 17 minutes, 5 seconds development largely through internal approvals and maintaining a conservative balance sheet as we execute the next phase of expansion. 17:14 17 minutes, 14 seconds With this we are happy to open the floor for the question and answer. 17:20 17 minutes, 20 seconds Thank you. We will now begin the question and answer session. 17:25 17 minutes, 25 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove 17:33 17 minutes, 33 seconds yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. 17:41 17 minutes, 41 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 17:50 17 minutes, 50 seconds The first question comes from the line of Punit Gulati from HSBC Bank. Please go ahead. 17:57 17 minutes, 57 seconds Uh yeah, thank you so much and congratulations on on good performance. 18:01 18 minutes, 1 second My first question is with respect to the upcoming malls in Kolkata, Surat and also you know your residential project. 18:08 18 minutes, 8 seconds Is it possible to get some sense of timeline uh as to what quarter for 2027 should we extract those? 18:20 18 minutes, 20 seconds Hi Ponet. Uh so for Kolkata and Surat we are expecting to launch it during FI27 18:27 18 minutes, 27 seconds and uh sorry FI28 my bad and we put it in the second half of FI 28. 18:36 18 minutes, 36 seconds Okay. And and the residential Kolkata Kolkata residential we are in I think we are finalizing the design and the 18:44 18 minutes, 44 seconds product mix and there and uh you know reverifying the approvals. So I think we will give you an update in the coming couple of quarters on the launch timeline for Korata residential. 19:00 19 minutes Does that answer your question P? Hello. 19:09 19 minutes, 9 seconds Yes, Pony. Please go ahead with your question. Hello. 19:15 19 minutes, 15 seconds Since there is no respon, Since there is no response from the participant, we would move to the next participant that's Moit Agraal from IIFL. Please go ahead. 19:24 19 minutes, 24 seconds Uh yeah. Hi. Uh good morning everyone and thanks for the opportunity. Uh my first question is on the uh on the consumption 19:32 19 minutes, 32 seconds growth for fourth quarter. Uh so can you share that X of jewelry or let's say X of uh non or low revenue share segments 19:42 19 minutes, 42 seconds what would be the consumption growth? So let's say the 30% reported number what would that be X of jewelry or non-E share segments? 19:50 19 minutes, 50 seconds Sure Mo. So if I take out jewelry and electronics both of which have had very 19:56 19 minutes, 56 seconds strong growth during FI26 and uh uh but they are structurally uh you know lower 20:03 20 minutes, 3 seconds as far as revenue share is concerned then our quarter 4 consumption growth would come in at about 17 to 18% for the 20:10 20 minutes, 10 seconds rest of the portfolio. In fact, uh we believe that what you see in fashion or 20:17 20 minutes, 17 seconds FNB or in cinema and uh cinema and entertainment, this has been the strongest set of you know sequential 20:24 20 minutes, 24 seconds quarterly growth numbers that we have seen over the last 3 to four years in these categories. 20:32 20 minutes, 32 seconds Okay. And as we move into FY27, uh how do you see this uh you know 20:39 20 minutes, 39 seconds probably this jewelry and electronics growth kind of stabilizing and the gap between the uh consumption growth and the rental growth on the reported basis? 20:49 20 minutes, 49 seconds Uh would that narrow or probably would this gap would continue in FI27 as well? 20:57 20 minutes, 57 seconds So Mo, we have a lot of uh moving positive factors at play at this point in time. If I first talk about the 21:05 21 minutes, 5 seconds portfolio, you will see the trading occupancy at Pin Mark City, Punea and Bangalore going up substantially in the coming quarters. 21:14 21 minutes, 14 seconds It's not just occupancy that's moving up but also the kind of retailers uh and their the impact that they will have on the trading densities, consumption and 21:22 21 minutes, 22 seconds the overall rental growth. We have already guided to a strong double digit growth from these two more portfolios that we should see during FI27. 21:32 21 minutes, 32 seconds Further, you should see the stabilization of Phoenix Mall of the Millennium and Fenix Mall of Asia which have seen over a 10% increase in their 21:42 21 minutes, 42 seconds occupancies during FIA 26. This should stabilize and start contributing to rent. So you get a stable base to 21:50 21 minutes, 50 seconds compare the renders on and further uh these are you know these two are the 21:57 21 minutes, 57 seconds core set of uh malls that we have spoken about but across the portfolio we have a significant amount of lease expireies 22:05 22 minutes, 5 seconds that are coming up which gives us a great opportunity to renew uh good performing brands and also introduce new 22:12 22 minutes, 12 seconds categories across malls like Phoenix Palasio and other malls where we have a number of expireies. Now if you 22:21 22 minutes, 21 seconds collectively take these three factors into consideration, we continue to remain positive as far as rental growth across our portfolio is concerned. 22:32 22 minutes, 32 seconds and uh you know electronics and gold and jewelry if they continue to grow well you will see a strong momentum in 22:39 22 minutes, 39 seconds consumption but even if they moderate I don't think it will have that material 22:44 22 minutes, 44 seconds an impact on rental growth for FI27 does that address your question Mo 22:52 22 minutes, 52 seconds yeah so so rental growth uh irrespective of how the consumption number moves uh this will continue to be As Rashmi 23:01 23 minutes, 1 second mentioned big to high double digit growth. Yes. Yes. M. 23:08 23 minutes, 8 seconds Okay. Uh my second question is on you know your opening remarks on office portfolio. Uh you mentioned that uh you 23:16 23 minutes, 16 seconds are targeting 90% occupancy in the next few quarters. Uh now clearly here Bangalore is the big uh you know thing 23:23 23 minutes, 23 seconds that can move. It is about 33% lease. So what is the outlook on on that asset uh Bangalore uh office and secondly on your 23:32 23 minutes, 32 seconds rise commercial [clears throat] how are you looking at so while it's still getting constructed are you kind of reaching out to uh uh you know uh to 23:41 23 minutes, 41 seconds IPC's and and trying to lease out what is the strategy in terms of leasing out that asset uh great questions thank you so much I 23:49 23 minutes, 49 seconds think uh first of all the response from the tenant for our office products has been simply phenomenal in uh the last 12 23:58 23 minutes, 58 seconds months. We in fact while we have announced that we have closed leasing of 2.2 million square ft, we also have uh you know several deals in the pipeline 24:07 24 minutes, 7 seconds where commercials are closed and documentation is under uh you know execution and I think what has helped 24:15 24 minutes, 15 seconds set these office assets apart are the amenity and the product experience that we have provided. 24:22 24 minutes, 22 seconds At the base level, the product that we have delivered is of the highest standard in the market in terms of energy efficiency, in terms of layout, 24:29 24 minutes, 29 seconds etc. And we have further complemented it by adding never seen before amenities 24:36 24 minutes, 36 seconds like a great hall which provides uh all office occupiers with private meeting 24:43 24 minutes, 43 seconds rooms, great cafe, entertainment areas etc. And we are also integrated at specific locations the more offering and 24:52 24 minutes, 52 seconds uh lifestyle amenities like club etc that have you know really set these offices apart and they have become the 24:59 24 minutes, 59 seconds go-to address for corporates to have their addresses in these uh respective uh cities. I am not taking any names on 25:08 25 minutes, 8 seconds discord of the tenants who have come in but if you follow our LinkedIn page you will see many tenants have posted about opening their new city headquarters in 25:17 25 minutes, 17 seconds our office portfolio and we have several other more prominent occupiers in the pipeline that we are very hopeful of 25:23 25 minutes, 23 seconds converting. Uh similarly uh Mohit I think uh you know like retail we believe in creating destination offices and rise 25:32 25 minutes, 32 seconds is going to be a similar product that is going to be uh set apart from uh the rest uh of the developments that you see 25:40 25 minutes, 40 seconds that you that you see uh in the city and we are already engaging with uh you know IPCs and tenants and conversations are 25:48 25 minutes, 48 seconds at an advanced stage in finally to uh address your question on Bangro So uh we 25:55 25 minutes, 55 seconds have a very strong pipeline. So why do you see an occupancy lease occupancy in the late 30s right now? We expect it to move up substantially in the coming couple of quarters. 26:07 26 minutes, 7 seconds Okay. Uh uh just a clarification any uh pre-leasing that you have already closed in for rise so far that 26:16 26 minutes, 16 seconds we will we will come back and make those disclosures mo the minute we uh start signing uh LOI but thoughts are moving at an advanced stage at this point in time. 26:27 26 minutes, 27 seconds Sure. Thanks a lot. That's all from my side. All the best. 26:32 26 minutes, 32 seconds Thank you. Participants please restrict yourselves to two questions. For any more questions, you may rejoin the 26:39 26 minutes, 39 seconds queue. Our next question comes from the line of Punit Kulati from HSBC Bank. Please go ahead. 26:47 26 minutes, 47 seconds Yeah, sorry I dropped out. My question is on the Phoenix market city, Bangalore and Pune where we've seen you know good 26:54 26 minutes, 54 seconds comeback in terms of consumption growth but it is yet to be visible in rental growth. How should one read that? 27:04 27 minutes, 4 seconds So we have about uh 9% of area both in Phoenix market city Pune and uh Bangalore which is leased but under fit 27:13 27 minutes, 13 seconds out and has not started trading. So we'll see the upside of rental of that area in the um current uh year FI27 27:23 27 minutes, 23 seconds as well as uh a lot of churn that happened during the year and brands have opened during different period and some in you know Q3 Q4. So you'll also see the full upside of that rental in FI27. 27:36 27 minutes, 36 seconds So Phoenix Market City, Pune, we'll see close to 14 15% uh rental upside in FI27 and PMC Bangalore is going to be close to 20% increase in the rental income. 27:48 27 minutes, 48 seconds So there just a bit of lag from consumption to to rental over a quarter. 27:54 27 minutes, 54 seconds I think what Vun answered earlier um uh apparel and accessories which is close to 60% of our portfolio uh continues to 28:03 28 minutes, 3 seconds grow at um uh 15 16% and uh you we may see that uh continued seasonal jump in 28:11 28 minutes, 11 seconds uh jewelry and electronics. So you'll see that slight difference between the growth rate of consumption and rental but otherwise it all looks very healthy 28:19 28 minutes, 19 seconds in terms of both the consumption increase and the rental increase and both will grow at a similar pace. 28:25 28 minutes, 25 seconds Understood. That's helpful. And lastly on slightly philosophical side you have two small malls Phoenix United in Bili 28:32 28 minutes, 32 seconds Lnau and a hotel in uh in in Agra uh not meaningfully contributing. uh what is 28:41 28 minutes, 41 seconds your thought about divesting those assets or do they serve a purpose in your portfolio? 28:48 28 minutes, 48 seconds Punish we haven't uh thought about divesting those assets. It's uh we have a we have a strong team in the north 28:56 28 minutes, 56 seconds which has an oversight on these all of these assets uh and amongst the larger assets that we have in north or 29:04 29 minutes, 4 seconds upcoming. So we haven't thought about divesting these but uh uh we take your point that these are not very impactful in the overall uh financial statements. 29:16 29 minutes, 16 seconds They don't have much of an impact. Uh however there is potential in these cities as they continue to grow. So there could be a model to you know 29:24 29 minutes, 24 seconds expand on but for the moment we have we've not thought about that. 29:30 29 minutes, 30 seconds Thank you. The next question comes from the line of Brites set from Access Capital. Please go ahead. 29:38 29 minutes, 38 seconds Uh yeah, thanks for the opportunity. 29:40 29 minutes, 40 seconds Good morning team. Uh first question is on the upcoming you know expireies almost 60% of the portfolio over next uh 29:49 29 minutes, 49 seconds 3 years uh coming up for expiry uh 3 to four years. uh what kind of uh you know rental upside uh that we see based on uh 29:58 29 minutes, 58 seconds you know the existing contracted rents uh and what the actual market rents are if you can guide us on that. 30:07 30 minutes, 7 seconds Thanks British uh for the question. I think let me take a step back and talk about what we have done in FI26. 30:15 30 minutes, 15 seconds So in FI2 sets Rashmi spoke about doing about 3.2 million square ft of these across the portfolio. If I take out the 30:23 30 minutes, 23 seconds deals that we have done at our under construction assets, we are talking of about almost nearly 2 million square ft of deals that is done at the existing operational portfolio. 30:33 30 minutes, 33 seconds Within this portfolio during FI26, I think on a blended average, we have seen nearly a 20% growth in renters between 30:42 30 minutes, 42 seconds new deals and renewers combined. Now uh we have a strong leading expiry pipeline 30:48 30 minutes, 48 seconds that is there and we haven't we have identified opportunities to reposition especially in terms of the brands and 30:57 30 minutes, 57 seconds category meds as well as the experiential FNB experiences like Gourmet Village that Rashmi spoke about earlier and we will use this opportunity 31:06 31 minutes, 6 seconds to repotion the more and target strong render upside uh you know not too dissimilar from what you have seen in 31:13 31 minutes, 13 seconds FI26. as well not too different than what we have seen in F26 right that's what 31:20 31 minutes, 20 seconds that's our that is what our endeavor would be and I think you know uh market conditions staying supportive we hope to deliver on that 31:28 31 minutes, 28 seconds sure and and beyond these expireies rest of the portfolio will grow at you know your uh contractual kind of levels or or 31:37 31 minutes, 37 seconds there also there will be uh you know contractual plus uh revenue share coming into picture and hence it would more or 31:45 31 minutes, 45 seconds less be linked to the consumption growth uh as well. Hey, I didn't [laughter] 31:52 31 minutes, 52 seconds a strong strong endeavor internally to ensure that every retailer is having their best performing stores at uh our 32:00 32 minutes boss and hence our marketing efforts, our customer engagement initiatives and uh you know all the uh events that we do 32:09 32 minutes, 9 seconds is targeted to ensure that uh retailers are growing not just at 5% but at much higher growth rates year after year. 32:17 32 minutes, 17 seconds So I would say that the rest of the portfolio outside of the expireies should uh you know continue to see uh reasonable growth year on year. 32:26 32 minutes, 26 seconds Yeah. I'd also like to add one point to that that in addition to the expiries, we also continue the ongoing churn to 32:34 32 minutes, 34 seconds bring in newer brands that are um coming into the market and um as you've seen in recent times in Phoenix Market City, 32:42 32 minutes, 42 seconds Pune, uh Bangalore, we've seen over the last two years, we've seen um a 10 to 20 25% churn that we've done. So this will 32:51 32 minutes, 51 seconds also bring in the increased uh rental impact in addition to the upcoming expiries because that's an ongoing process. 32:59 32 minutes, 59 seconds Yeah, got it. Got it. That's helpful. Uh second on the uh you know pine market 33:06 33 minutes, 6 seconds city, Pune and Bangalore by when can we expect them to reach 95% kind of trading occupancy which is a general stabiliz stabilized rate that we expect? 33:18 33 minutes, 18 seconds I think uh British in our presentation we have already guided to reaching about 90% by the end of month 33:25 33 minutes, 25 seconds right and because we have uh you know certain identified stores like Unilow and other stores that are scheduled to 33:31 33 minutes, 31 seconds open and uh you know by our lease occupancies if you see at Bangro and Puna they are already Bangro is already 33:40 33 minutes, 40 seconds entirely leased and Puna is also near 100% leasing at this point in time so the trading occupancy should also move 33:47 33 minutes, 47 seconds up towards the 95 96% levels by the end of FI27. 33:55 33 minutes, 55 seconds Sure. Sure. And just one last on the office side. Uh when would we start seeing cash rental contribution? 34:05 34 minutes, 5 seconds Sorry. Can you hear me? I can hear you. Please go ahead. 34:08 34 minutes, 8 seconds Yeah. Yeah. Okay. Uh just one last on the office side. uh when can we start when should we start uh expecting 34:14 34 minutes, 14 seconds rentals from the newer office assets around from Q2 onwards uh since these assets were completed towards the end of 34:23 34 minutes, 23 seconds last year. Uh yes British I think you should expect to see revenue coming in from Q2 onwards and quarter on quarter 34:30 34 minutes, 30 seconds you should see revenue growing. uh uh I don't want to hazard a guess but I would estimate that our uh quarterly income 34:38 34 minutes, 38 seconds from office assets should double from current levels by the time next year quarter 4 comes around. 34:44 34 minutes, 44 seconds Sure. Got it. That's helpful. Thanks and all the best. Thank you. 34:50 34 minutes, 50 seconds Thank you. The next question comes from the line of Parshit Kandpal from HDFC Securities. Please go ahead. 34:58 34 minutes, 58 seconds Yeah. Hi team. Congratulations on a good quot. So my first question is on the rentals. So we have seen 21% consumption growth has translated to 10% growth in 35:07 35 minutes, 7 seconds rentals. So just wanted to understand if the mix of the tenant remains the same. 35:11 35 minutes, 11 seconds Uh so is it correct to assume that typically conversion from consumption to rental will be roughly between anywhere I mean up to half like 50%. 35:22 35 minutes, 22 seconds Uh thank you. That's a uh that's an interesting question. uh I 35:31 35 minutes, 31 seconds just you know for everyone listening in I will just maybe give a backdrop on how our lease uh structure is uh structured 35:39 35 minutes, 39 seconds and why it creates an intentional gap at times between consumption growth and render growth. Uh as you are aware our 35:47 35 minutes, 47 seconds leases are higher of fit strength or revenue share whichever is higher. Now the fit strength at the beginning of the lease creates downside protection for 35:56 35 minutes, 56 seconds us. So even when stores are ramping up their consumption and their retailer sales may not have reached the threshold 36:04 36 minutes, 4 seconds level at which they start paying revenue share to us, we still continue to benefit and uh in you know enjoy downside protection from the fixed rent 36:12 36 minutes, 12 seconds and once consumption crosses and breaches the threshold levels then our rent start moving uh alongside it. You have seen this normalization play out in 36:20 36 minutes, 20 seconds the last two years in Phoenix Mall of the Millennium and Mall of Asia where rent to consumptions have moderated to 36:27 36 minutes, 27 seconds uh you know what are portfolio average levels of about 10 11% for new malls going forward the rent should continue 36:36 36 minutes, 36 seconds to grow the growth and consumption would depend on a where the high growth but low revenue share categories like 36:44 36 minutes, 44 seconds jewelry and electronics come in and I would say that if market conditions stay the way they are, the gap between rent 36:51 36 minutes, 51 seconds and consumption should continue to naturally narrow as we go forward and the revenue share component of our rental fees continue kicking in and bridging uh the gap. 37:04 37 minutes, 4 seconds So out of the 2157 crores of rent how much was minimum guarantee and how much is revenue share? 37:11 37 minutes, 11 seconds uh we typically don't provide that break up uh but you may consider 90% of the rental income to be uh you know to be 37:20 37 minutes, 20 seconds fixed in nature and the rest is incremental revenue share over and above the fixed rate that we uh you know that 37:27 37 minutes, 27 seconds we generate from retailers and this is the last question on this 10% growth in rentals which we are 37:35 37 minutes, 35 seconds seeing if you can help us understand the breakup of so what was the impact of the ramp up in trading occupancies like today like if we had to compare so what 37:43 37 minutes, 43 seconds could have been the actual rental growth because I think newer malls have seen a sharp ramp up in building occupancies 37:50 37 minutes, 50 seconds which could have added additional delta so I just wanted to understand and also on the volume and pricing bit how much do you think that you have achieved 37:57 37 minutes, 57 seconds because I think you said some areas was under renewal and you got 20% growth there so just wanted to understand with that inflation with the pricing is 38:04 38 minutes, 4 seconds tracking inflation at least yeah I think there are many parts to unpack in that question but if I try and 38:12 38 minutes, 12 seconds take a you know short-term jab uh at that question uh I would say that first of all factory trading area at a 38:20 38 minutes, 20 seconds portfolio level hasn't increased compared to last year you have seen trading occupancy go up in Phoenix Mall 38:28 38 minutes, 28 seconds of the millennium and Phoenix Mall of Asia but at the same time we have lost some area in Phoenix paradium which is 38:36 38 minutes, 36 seconds intentionally under redevelopment at this point in And we have reportioned the Phoenix market city mosque which has which has also led to a temporary intentional drop 38:46 38 minutes, 46 seconds in trading occupancy. So when we compare at our end when we look at the data and we see trading uh areas across the 38:53 38 minutes, 53 seconds portfolio FY26 was at the same level or slightly below FI25. 39:02 39 minutes, 2 seconds Okay. 39:03 39 minutes, 3 seconds Of course in terms of uh trading densities like you alluded to Fenix Market City MOS have seen a significant 39:10 39 minutes, 10 seconds growth in uh trading densities which are in excess of 20% uh you know for the quarter and also overall for the 4 year 39:19 39 minutes, 19 seconds as well and that's a that's a outcome at times of deliberate uh you know selection of which continue to stay and 39:27 39 minutes, 27 seconds what type of events uh we do to manage the uh you know impact from lower 39:34 39 minutes, 34 seconds trading area uh in the mall on contractual rentals increase I mean is it marking inflation because now in a 39:42 39 minutes, 42 seconds we are in a sorry those were two questions please rejoin the queue our next question comes from 39:49 39 minutes, 49 seconds the line of Perves Kaji from Noama group please go ahead uh hi uh good morning thanks for taking 39:57 39 minutes, 57 seconds my question so two questions from my side first uh I mean you said that consumption growth X of electronics and 40:04 40 minutes, 4 seconds jewelry was maybe 17 18% in Qur. What would have been a similar number for FI26 as a whole? 40:15 40 minutes, 15 seconds Sorry for uh are you asking for a similar number for FI25 or 27? 40:21 40 minutes, 21 seconds FI 26. FI26 consumption growth was 21%. 40:25 40 minutes, 25 seconds But if you adjust for jewelry and electronics then what would that number have been? 40:31 40 minutes, 31 seconds Okay, that number would have been 14 to 15% for uh you know adjusted for jewelry and electronics for the four years of FY26. 40:40 40 minutes, 40 seconds For quarter 4 that number was closer to 18%. And for quarter 3 that was 16%. 40:50 40 minutes, 50 seconds Sure. Uh the second question is uh I mean obviously the current economic environment is volatile. Uh so what has 40:58 40 minutes, 58 seconds been the consumption trend in April and I mean again X of jewelry and electronics. What do you think FY27 41:08 41 minutes, 8 seconds consumption growth uh looks like? 41:17 41 minutes, 17 seconds So April is looking very good. Uh we are seeing close to a 30% growth in April. 41:22 41 minutes, 22 seconds We've also had a priti um in April. So obviously the jewelry uh continues to have that uh seasonal upside in the 41:30 41 minutes, 30 seconds month of April and um without this category the growth would uh fall somewhere between 17 18%. 41:39 41 minutes, 39 seconds Uh I'm sorry 27. 41:42 41 minutes, 42 seconds I'm sorry to interrupt Perves. Those were your two questions. Please rejoin the queue. 41:47 41 minutes, 47 seconds The next question comes from the line of Girish Chri from Aendis Park. Please go ahead. 41:52 41 minutes, 52 seconds Yeah. Hi uh good morning. Thanks for the opportunity. Some of my questions have been answered. I have uh just one uh on the uh visibility uh right uh in in in 42:02 42 minutes, 2 seconds terms of number of malls uh you have a announced pipeline which will take you to around 18 million square ft uh by 42:09 42 minutes, 9 seconds 2030 right so and then looking at uh let's say you you've been wanting to enter new cities uh beyond where you are 42:18 42 minutes, 18 seconds present like let's say Hyderabad or the Delhi NCR kind of markets or other tier one tier two markets uh and and u the 42:27 42 minutes, 27 seconds construction or development cycle takes to four five years right so just wanted to get a sense on the uh land scouting 42:33 42 minutes, 33 seconds uh um uh strategy uh right so I mean how should we look at beyond 2030 42:43 42 minutes, 43 seconds kesh we are hard at work and we are actively scouting the cities that we have also put out in our presentation 42:50 42 minutes, 50 seconds this includes Hyderabad Jaipur Navi Mumbai uh amongst others And uh fingers crossed uh you know we'll 42:59 42 minutes, 59 seconds be hopeful of announcing you know one or two transactions in uh you know during FI27 in terms of new city expansion. 43:09 43 minutes, 9 seconds That said we do have substantial opportunities within our existing portfolio. So like how we are undertaking expansion of Phoenix 43:16 43 minutes, 16 seconds paladium and Phoenix market city Bangalore and converting them into super campuses. we do have such opportunities across the rest of the portfolio as well 43:25 43 minutes, 25 seconds and we will evaluate and share the same uh you know going uh forward. 43:32 43 minutes, 32 seconds Great. Great. Thanks. Thanks. That's helpful. 43:37 43 minutes, 37 seconds Thank you ladies and gentlemen. Due to time constraints that was the last question for today. I would now like to hand the conference over to the management for the closing remarks. 43:48 43 minutes, 48 seconds Thank you everyone for joining us and should you have any follow-up questions please reach out to our uh I team led by car and makria for further follow-ups. 43:57 43 minutes, 57 seconds Thank you. 43:59 43 minutes, 59 seconds Thank you sir. Ladies and gentlemen on behalf of the Phoenix Mills Limited that concludes this conference call. Thank you for joining us and you may now disconnect your lines.