Phoenix Mills (PML) is a mid-size real estate developer operating across the retail, hospitality and commercial segments. The company is developing over 435 lakh sq ft (sf) of space and follows a highly capital-intensive business model of asset ownership and lease.

It is likely to pursue this assetheavy model for the next couple of years or until its SPV projects become debt-free . Most of its projects are scheduled to become operational by FY11. The company will use the generated rentals to first pay off debt, after which earnings will flow from the SPVs to PML in the form of dividend or sale of assets at higher valuations.

Religare expects inflows of Rs 130 crore in FY10 post commencement of the third phase in October ‘09 (a 400,000 sq ft luxury mall called Palladium), which will take the operational area at High Street Phoenix (HSP) to ~1msf. With a cumulative lease area of 3.1 msf on completion of all the four phases, the company will have an FSI of more than 4x.