Phoenix Mills (PML) has acquired an under-construction retail asset with 0.9 msf developable area in Gomti Nagar extension, Lucknow, for Rs 453 crore. The asset will require additional Rs 300 crore to complete and expected to get operational within next 24 months (FY21). In our view, Gomti Nagar is an established micro-market and offers strong residential and commercial catchment to the mall; hence, healthy vacancy levels and rentals (expectation of `100 psf pm). While the acquisition is valuation neutral, it can reach steady state earnings FY22 onwards as it in advanced stage of construction. This is PML\u2019s 3rd large acquisition in past one year and is in line with the strategy to double its retail portfolio to 12 msf over next 4-5 years. Further, its existing portfolio will continue to see 10%+ growth in rentals driven by steady consumption growth. Maintain BUY. The asset is spread over 13.5 acres and is located in Sector 7 (Gomti Nagar), adjacent to Ekana International Stadium and is part of a proposed 34 acre mixed use development project. The property was acquired from the Lucknow Development Authority (LDA) via e-auction, with PML emerging as the highest bidder. Lucknow is 6th fastest growing city in terms of job creation, with IT\/ITeS presence in the city growing (TCS and HCL have large campuses within15 minutes of the asset). PML is already witnessing strong rental growth (17% YoY in FY18) at Phoenix United \u2013 19 km away from this mall. Additionally, the state government plans to develop a 100 acre IT-SEZ, which would further fuel consumption. Gomti Nagar is developing as the commercial and IT hub of mainland Lucknow. Till now, Central Lucknow consisting of Hazratganj, Vidhan Sabha Marg and Ashok Marg was the main commercial area of Lucknow. With population of over 500,000, it is a planned and organised settlement developed by LDA.