Phoenix Mills keeps 14%-15% retail rental outlook through FY28

Phoenix Mills expects 14%-15% retail rental growth in both FY27 and FY28, supported by 50% of its portfolio coming up for lease expiry over the next two years plus and typical repricing increases of about 20% in minimum-guarantee rentals. Phoenix Mills reported 16% rental growth in the first half of FY27.

What is Phoenix Mills guiding for retail rental growth through FY28?

Phoenix Mills is retaining its 14%-15% retail rental-growth guidance for FY27 and FY28. Management said it had provided the two-year outlook in the fourth quarter and did not believe the framework changed after the first half of FY27, when rental growth reached 16%.

Management said the first-half FY27 result was stronger than its expectations and should flow through to the full-year outcome. In its October 2026 commentary, management said it was optimistic that Phoenix Mills could exceed the 15% FY27 level, although it did not formally revise the stated guidance before the October-to-December festive period.

Phoenix Mills said FY28 growth is expected to be supported first by initiatives at operating centres, including trading-occupancy ramp-up, tenant optimisation and lease renewals. Management added that new assets coming on stream after these operating actions should further support the growth profile.

How will lease renewals lift Phoenix Mills' rental income?

Phoenix Mills expects lease expiries covering 50% of its portfolio over the next two years plus to support rental growth through repricing. Rashmi Sen said minimum-guarantee rentals have typically risen about 20% over the previous level when Phoenix Mills repriced expiring leases, and management expects that pattern to continue.

Management said expiries enable Phoenix Mills to reset rents for the next five years at established centres. This creates a contractual mechanism for rental growth that is separate from quarterly changes in customer consumption, while allowing the company to reconsider tenant mix as leases mature.

Phoenix Mills also said rent and consumption do not follow a fixed quarter-by-quarter relationship. Management said rent growth had been 15 percentage points ahead of consumption three years earlier, when new malls had opened, before consumption later moved ahead of rent; in the latest quarter, the rent-to-consumption ratio improved to 13% from 12% in the fourth quarter.

Management described its longer-term rent-to-consumption range as 13.5%-14%. It expects new lease expiries and additional operational areas to narrow the gap between the two measures over time, but said they should not be expected to reach the same growth rate in any particular quarter.

Which operating actions are expected to support Phoenix Mills in FY28?

Phoenix Mills expects occupancy ramp-up, retailer churn and asset upgrades to contribute to FY28 rental growth. Management said about 5% of portfolio area was under fit-out during the quarter, which had a 2-3 percentage-point effect on reported consumption growth.

The company cited Bengaluru and Pune as examples of its refurbishment approach. Phoenix Mills had revamped the malls in those cities at one time, which resulted in flat growth in the previous year, but management said the centres were delivering 15%-20% growth in FY27 and should continue that trajectory in FY28.

Phoenix Mills is using a more gradual strategy in Chennai, Phoenix MarketCity Mumbai and Phoenix Palassio, Lucknow. At Phoenix MarketCity Mumbai, management said a facade and landscaping upgrade, alongside retailer churn and optimisation, is intended to introduce new brands and categories.

Indore is another centre where tenant changes are tied to expiries. Management said a large chunk of Indore leases will expire within the next nine months, allowing Phoenix Mills to pursue newer brands that were not present in the state when the centre was leased about five years earlier.

Which Phoenix Mills projects could add growth after FY28?

Phoenix Mills expects its development pipeline to add to growth after the operating-portfolio initiatives, with several projects scheduled for calendar years 2027 and 2028. Management said the Rise mall is due to open in calendar year 2027, while Surat is expected to complete in 2027 and open in 2028.

Kolkata was expected to begin fit-outs around the second quarter, with a launch planned about six months later. Phoenix Mills also expects the Bengaluru retail expansion to complete in 2027, while management said the timing of individual openings depends on execution and fit-out activity.

Management said it has a long pipeline of brands interested in the new centres, but is making leasing decisions selectively based on tenant mix. For later projects, Phoenix Mills is targeting calendar year 2030 operations for Thane, Chandigarh and Coimbatore, subject to regulatory approvals and the time retailers require for fit-outs.

Why will consumption and rental growth differ by quarter?

Phoenix Mills does not expect consumption growth and rental growth to move in lockstep each quarter. Management said 25% consumption growth in the quarter included no more than 3 percentage points from higher trading area because trading occupancy increased by only 3 percentage points year on year.

The remaining consumption growth came from what management called natural growth, although the 5% of area under fit-out also affected the result. Phoenix Mills said lease renewals, repricing and the activation of additional space influence rent over longer periods rather than producing an immediate matching increase in every quarter.

Phoenix Mall of Asia is one centre management expects to contribute to growth beyond the portfolio-wide outlook. Phoenix Mills said it had become one of the largest malls in its portfolio by consumption and expects healthy double-digit consumption growth there in FY28, when some earlier leases will also come up for renewal.

Management also said it expects 20%-25% normalized consumption growth for October 2026, though it cautioned that October comparisons were affected by Diwali falling in October in the previous year. It said audited retailer reports and the completion of the festive period would give a clearer view of October and November consumption by the end of November.

Conclusion

Phoenix Mills' 14%-15% rental-growth outlook for FY27 and FY28 rests on identifiable operating levers: renewal repricing across 50% of the portfolio, occupancy ramp-up, tenant replacement and upgrades at established malls. The 16% first-half FY27 result exceeded the guided range, while the typical 20% increase in minimum guarantees at repricing explains management's focus on lease expiries.

The next disclosed milestones are the FY27 outcome after the October-to-December festive period, lease expiries at Indore over the next nine months, and planned openings from calendar year 2027. Phoenix Mills expects Rise and the Bengaluru retail expansion in 2027, Surat in 2028, and targets calendar year 2030 for Thane, Chandigarh and Coimbatore, subject to approvals and retailer fit-outs.