Nexus Select Trust

Basis of our Recommendation

Nexus Select Trust (NXST) is strategically positioning itself for growth through an aggressive geographic expansion into high-potential markets in East and Northeast India, where demand for grade A retail space is on the rise. Management's commitment to scaling the portfolio to 18–20 million square feet by FY30, alongside a targeted incremental net operating income (NOI) growth of Rs10 billion, underscores a robust long-term growth strategy. This aligns with Vista's forecast of improving margins and stable revenue growth, supported by the REIT sector's overall positive trajectory and improving pricing power. However, execution risks related to under-construction projects and potential unit dilution from future capital raises warrant close monitoring. The current macroeconomic environment, while generally supportive, presents challenges such as inflationary pressures and currency fluctuations that could impact financing costs. Over the next 12-24 months, key opportunities include capturing market share in emerging urban centers and leveraging strong demand for real assets, while headwinds may arise from regulatory changes and market saturation in certain segments