Phoenix Mills announced acquisition of under-construction mall (Shan-E-Awadh Mall) in Lucknow from Lucknow Development Authority (LDA). The total acquisition cost is Rs 453 crore and will require additional Rs 300 crore for completion. The acquisition will be outside the Island Star Mall platform (with CPPIB) as the platform has deployed most of its capital with the recent acquisitions (Pune, Bangalore and Indore). Management expects the mall to be operational in 2 years with a starting rental of Rs 110\/sf\/month- 30% premium to Phoenix United mall in Lucknow. We see limited increase in debt on back of acquisition as free cash flow from High Street Phoenix (c. Rs 300 crore annual EBITDA) will take care of the equity contribution in the project. Based on our assumption, the asset adds Rs 13\/share to PHNX NAV. Mall consumption growth will be key monitorable for sustainability of high rental premium expected in the acquired mall. The mall has a development of 1.4msf with construction commencing in 2016 undertaken by LDA. NCC has been appointed as contractor of the mall and 40% of physical work has been completed (100% basement, first and second floor structure- exhibit 1). However, as per media reports, LDA put the mall on auction siting paucity of funds. Two companies participated in the bids with Phoenix Mills (through its 100% owned subsidiary- Destiny Hospitality Services) highest bidder at Rs 428 crore (L2 lower by R.2 crore). In addition, company has to pay c. Rs 25 crore to convert the land into freehold implying a total acquisition value of Rs 453 crore. In addition to the acquisition cost of Rs 453 crore, company expects to incur Rs 300 crore to complete the project over next 2 years. Management has indicated some changes in layout of mall to ensure better consumption growth.