From being India’s largest inbound tour operator to running a most successful retail mall, Arjun Sharma has come a long way in his enterprising journey. Recently, Arjun has relaunched his hotel inManesar as a modern heritage resort, replete with all modern amenities. Here he recounts his journey’s highlights.
A spate of advertisements in the newspapers announcing the re-launch of a refurbished Manesar Village Resort and Spa caught the eye. And a spate of memories dating back to an era when most of the deluxe hotels in Gurugram had not taken shape. And this is when a leading inbound tour operator conceived an idea of bringing the havelis of Rajasthan closer to the national capital. Instead of the more renowned Golden Triangle, he thought of creating a square, with a night halt or two, close to the city.
The late Inder Sharma was a towering figure in India’s tourism industry, carrying clout within the corridors of power and also within the larger national tourism scene. He was one of the two private sector members of the now famously known Mohammed Yunus Committee, that was entrusted with the task of recommending an action plan for Indian tourism. It had recommended many a task, unfortunately most of the suggestions were never taken up. Sharma was often the president of the Travel Agents Association of India, won many a national award for earning the highest foreign exchange year on year, as an inbound tour operator.
He chose to become a hotelier as well, supported by the ever-keen and astute business acumen of his son Arjun. Then was born the first of their two hotels, first in Manesar and soon the second being in Goa. Thereafter, were the lull days for hotels, not yielding the kind of ROI that private businesses would have looked at. Now, the business environment has changed dramatically for hospitality business in the country. Both existing hotels have since been extensively refurbished/expanded and are run by Arjun and his team, with Arjun now playing the role of Chief Vision Officer.
Down Memory Lane
Going back in time, starting as a travel agency, acquired from an American lady, the vision of the late Inder Sharma, grew with experience and over the years. Came one day when he decided to re-engineer his business, exit the travel agency and inbound tourism businesses. What next? A new name, a new identity, and a new line of business. That was the beginning of ‘Select’, as a hotel group, as a shopping mall and going beyond.
SITA World Travel, India’s most iconic Travel & Tourism business for over four decades, as a business was successfully sold and merged with Kuoni Travel India Pvt Ltd in March 2000. What followed was two years of working for both Arjun and sister Neeraj in Kuoni Travels, respectively heading the Incoming and Ticketing divisions of Kuoni India. In February 2002, the family formally separated from Kuoni India and Inder Sharma conceived the creation of a new family identity, as Select Group, for which he envisaged a vision of growth and leadership.
Then, approximately a decade earlier, Arjun had gone to his father Inder Sharma with the thought of opening a resort around Delhi. As SITA had a lot of tourists traveling on the Golden triangle, Arjun had envisaged that the Golden Triangle would soon become a square. Land was identified with the help of Brijesh Saxena and Inder Sharma, who whole heartedly supported the project once convinced. He had a certain vision, deriving the inspiration from the havelis of Rajasthan and the homes of Haryana and Punjab. He was actively involved in all aspects of the building of the hotel. The hotel has been subsequently expanded from 82 keys by adding 63 new rooms; the resort is now a 150-key resort. It is one of its kind, sheltered amidst the growing metropolis of Manesar, literally an oasis in a growing industrial and residential township. Manesar is just an hour away from Gurugram on the Delhi-Jaipur highway.
Soon after the Manesar hotel was completed, Arjun looked to expanding the hotel business to Goa and the credit once again would go to Inder Sharma; he only came for the foundation stone laying ceremony and then subsequently its opening. For Arjun, this was baptism by fire and a great learning experience.
The Birth of a Shopping Mall
Circa September of 2003, Yog Raj Arora, a CA working with the family, came with a proposal to Arjun to bid for an auction of a prime piece of land in Saket, South Delhi. He envisaged the creation of a shopping centre which seemed a rather exciting and a different opportunity away from the resorts and hotels, that the family was used to. However, the initial plans and numbers were driven around a build and strata sale model which was the norm for all shopping centres in those days.
Initially, Inder Sharma was very apprehensive about a high-risk project where a great part of his wealth would be at stake in a new business, but as Arjun was very passionate about it, he went along with the consensus of examining the project in far more detail.
To mitigate the risk, it was considered to bring in ICICI Ventures as a strategic partner, holding 30% of the equity, and who would also help us raise the large debt required for the project.
On November 2003, Select Group along with the Aarone Group successfully bid at the auction. Out beating large Real Estate giants like DLF and MGF etc. Incidentally in 2003, the auction price of this land was the highest price ever paid for a commercial plot in India.
ICICI Ventures was envisaged to come in over the next 6 months, as a part of their commitment. It is part of history that ICICI Venture backed out of their commitment at the last minute and it is only with their Guruji’s intervention, says Arjun, and divine blessings and support of State Bank of India and HDFC Bank, they successfully completed the financial closure of the project by the 6th June 2004 without an external equity partner.
“We put together an amazing team of professionals and along with the entrepreneurship spirit of Yogi and Neeraj, we approached the project completely fresh and new. We were all open to learn, to benchmark best global practices and use the finest global architects and consultants to put together a new business model of a shopping centre where no part of the retail area would be sold and that we would create one of India’s first fully leased shopping centre in the country. Our Board members, friends and family were once again apprehensive of the change of the business model but it was with the blessings and vision of Inder Sharma that we embarked upon the high risk of an unchartered path of a fully leased shopping mall,” Arjun fondly recalls.
The team made many changes to the original DDA plan which somehow originally resembled South Extension and Khan Market combined markets, with surface parking and open courtyard; much work had to be done afresh which Neeraj successfully championed. Meanwhile, Arjun focused on leasing with global and Indian brands and Yogi looked after the construction.
A New Landmark Set to Global Standards
The foundation stone was laid on 22nd February 2005 and within a period of 30 months, they had opened Select Citywalk on 12th October, 2008 with an occupancy of 60%. This kind of fast construction and an opening of 60% occupancy continues to remain a benchmark even today.
There were many firsts at Select Citywalk, notably 3 levels of extensive & huge underground parking, no value departmental store, stunning brand mix with the best of International and high street brands, a huge open plaza for events and activation with no surface parking. In a very short period of time, Select CItywalk became India’s No 1 Shopping Centre with the highest sales per square foot in the country, a position it still holds after 16 years of operations, along with many global brands who wanted to enter India through Select CItywalk. For many of these global brands such as Zara, H&M, Burger King, Tim Horton, Massima Dutti, Sephora, Bobbi Brown etc. etc., we were the launch pad in India. We also incubated many startups and went onto raise and grow their businesses such as Heads up for Tails, Chumbak, Wow Momos and others. In April 2023, we were one of the first two shopping centers in the country to have an Apple Store, including a visit by Tim Cook, the CEO of Apple. With the blessings of Guruji and our steadfast decision of putting the customer in the center of everything we made Select Citywalk grow in leaps and bound.
Select Citywalk is the first shopping centre to offer free home delivery service. Its state-of-the-art facilities, quality services, and commitment to customer satisfaction have won hearts of thousands of visitors from around the world. Over the years, the centre has added many feathers to its cap including being awarded the Retail Mall of the Decade by CNBC Awaaz Real Estate Awards in 2016. Not only is Select Citywalk one of the most disabled-friendly malls in the country but is also the first to be ISO and OHSAS certified and has won over 125 National Awards in the last 16 years for many aspects of the business.
Covid was a strange and a difficult time for the world and ironically just prior to Covid they had received a sanction to increase the mall size by 80,000 sq. ft. which they successfully did in trying times. They used the opportunity to fix the sails when the external storms were unprecedented as a business; while they gave waiver of rents to tenants, all colleagues and employees continued to receive their salaries without any layoffs.
Going Beyond, Examining the Way Forward
During this period, the promoter group started receiving overtures from Global Funds for a potential collaboration, With the help of EY and its leadership, led by Rajiv Memani and Randhir Kochhar, they started examining the opportunities of the way forward. The promoters were keen not to ever sell the shopping centre, but sought a transaction where 1+1 is not only 2 but in the due course of time, will be 11.
How did they go about it?
“Cutting a long story short, we had an amazing meeting of minds with the Blackstone Real Estate team led by Tuhin Parikh and Ashish Mohta. The envisioned plan was not a sale but a merger between the Blackstone promoted Nexus Mall and Select Citywalk and to jointly list it on the National Stock Exchange as a REIT [Real Estate Investment Trust]. In approximately two years of hard work, and thousands of hours of legal work, we together listed the business on 18th May, 2023 in a historic listing of India’s first Shopping Centre REIT and only the 4th REIT in India. In Blackstone we have found an amazing long-term partner /sponsor of the REIT, who along with its professional management, is desirous of growing the portfolio from the current 17 malls to a much higher number in the years to come. Our joint company which manages all the Malls is called Nexus Select Mall Management and the REIT which is a Trust is called Nexus Select Trust and goes by the acronym NXST on the NSE Ticker”, says Arjun.
As a Board Member and Vice Chairman of Nexus Select Mall Management Company, Arjun works as a Director of the Mall Management company providing strategic direction and inputs for the growth, governance and well-being for all stake holders.
All Doors Opened: A Legacy Left Behind by Inder Sharma
The story and success of Select Citywalk goes back to the faith of late Father Inder Sharma, who trusted the passion of his children and encouraged them with his life moto of “All Doors Opened” and hundreds of colleagues who have worked tirelessly to build the business and to the current partnership of Blackstone and their professional management that continues to run the business with huge passion, perseverance and commitment.
To complete the story of Select Group, it will be important to highlight that in 2005, Arjun simultaneously invested in a travel company called Le Passage to India (LPTI) and brought in TUI, the world’s largest travel company as 50% Joint Venture Partner. By 2007/2008, LPTI became India’s No. 1 Tourism company with over 500 travel professionals and at its peak approximately 50% higher than its closest competitor, in terms of sales and volumes. LPTI won several National Awards and it was in 2013 that the pressure of being actively involved in the shopping centre, hotel division as well as travel, Arjun took a decision to divest to TUI the 100% share of LPTI. Since 2013, he has not been involved in any executive functioning of LPTI leaving it to professional management to run the business.
Jai Guruji, is what Arjun fondly says, preferring to give all the credit to “whom we trust will continue to bless the Select Group, the business and the people associated with it”.
Looking back at 18th May 2023, when Nexus Select Trust listed on NSE at Rs. 100 per unit to 30th August 2024, when the price of Nexus Select Trust closed at Rs. 138.27 per unit, every Unit holder had received a distribution of Rs. 9.21 per unit, from the date of listing. This translates to an ROI as on 30th August is 36.41%. An impressive track record. The narrative had come a long way since its early beginnings.