Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q2 FY24 Earnings Presentation
53 slides from Mindspace Business Parks Reit's earnings presentation, Oct 30, 2023
Slide 1: Q2 FY24 Results Presentation
Q2 FY24 Results Presentation 30th Oct 2023 mindspacereit.com 1
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation (“Presentation”) is made, or by reading the Presentation materials, you agree to be bound by the following limitations: This Presentation (a) is for information purposes only without regards to specific objectives, financial situations or n
Slide 3: Table of Contents
Table of Contents Key Updates 04 Portfolio Overview 12 Projects Update 19 Financial Update 24 Price Performance & Unitholding 29 Market Updates 32 Value Creation via ESG 37 Annexures 44 Note: 1. For ease and simplicity of representation, certain figures may have been rounded 2. Mindspace Business Pa
Slide 4: Key Updates
01 Key Updates mindspacereit.com 4
Slide 5: Mindspace REIT – At a Glance (H1 FY24)
Mindspace REIT – At a Glance (H1 FY24) 1 Operating Highlights 0.3 msf 9.8 % 86.5 % 73 1.1 msf 0.8 msf INR psf/month Committed Average Rent for Area New and Vacant Area Re-leasing Spread (1) Gross Leasing Re-leased Area Occupancy Leased Leased on 1.0 msf 2 Financial Highlights INR 5,687 Mn 6.1 % INR
Slide 6: Key Highlights - Q2 FY24
Key Highlights - Q2 FY24 1 Operating Highlights New & Vacant Gross Leasing 0.8 msf (1) Area Leased 0.2 msf (1) Average Rent achieved on Gross Leasing INR 75 psf month Re-leased 0.6 msf 2 Financial Highlights Weighted NOI(2) INR 4,912 Mn (5) Average Cost of debt as of 7.8 % p.a. (17.7% growth y-o-y)
Slide 7: Leasing Overview – H1 FY24
Leasing Overview – H1 FY24 1.1 msf leases signed across 40 Deals and achieved 9.8%(1) Re-leasing spread on 1.0 msf 1.1 msf INR 73 psf/month 9.8% H1 FY24 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) H1 FY24 - Split Basis Type of Tenants Area Re-leased (2) 0.86 msf Leased to
Slide 8: Leasing Overview – Q2 FY24
Leasing Overview – Q2 FY24 0.8 msf leases signed across 24 tenants and achieved 9.7%(1) re-leasing spread on 0.7 msf 0.77 msf INR 75 psf/month 9.7% Q2 FY24 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q2 FY24 – Gross leasing Area Re-leased (2) 0.54 msf Leased Assets Locati
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Steady Revenue and NOI Growth aided by rent commencement on leases signed Growth Growth (in INR Mn) Q2 FY24 Q1 FY24 Q2 FY23 H1 FY24 H1 FY23 (y-o-y) (y-o-y) Revenue from 20.6% 17.4% 5,997(4) 5,604 4,974 (18.2% excluding 11,601(4) 9,884 (16.2% excluding Oper
Slide 10: De-risked Portfolio with 92.1% Completed Assets (by Value)
De-risked Portfolio with 92.1% Completed Assets (by Value) Statement of Net Assets at Fair Value Movement of NAV (INR p.u.) (INR Mn) Sr. No. Particulars 30 Sep 23 10.9 (1) A Fair Value of Real Estate Assets 286,707 (13.2) B Other Assets at Book Value 10,691 C Other Liabilities at Book Value (78,196)
Slide 11: Distribution for Q2 FY24
Distribution for Q2 FY24 c. 90% distributions are in the form of tax-exempt dividends Distribution Key Dates Yield DPU 6.1% INR 4.79 p.u. Q2 FY24 (1) Q2 FY24 Period Jun 23 to Sep 23 Distribution Amount INR 2,841 Mn Outstanding Units 593,018,182 Declaration Date 30 Oct 23 Interest ₹0.49 Record Date 0
Slide 12: Portfolio Overview
02 Portfolio Overview mindspacereit.com 12
Slide 13: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 32.3 msf INR 67.0 psf Total Leasable Area (1) In-place Rent 87.3% 86.5% Same Store Committed Committed Occupancy Occupancy on 24.7 msf on 26.1 msf ` Mumbai Region Hyderabad 3.7% 6.9 years 11.7 msf (36.2%) 14.1
Slide 14: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 13.1 msf (1) Mumbai Region | 5.6 msf Completed Area: 9.6 msf; Committed Occupancy: 91.9% Completed Area: 4.7 msf; Committed Occupancy: 82.7% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Reg
Slide 15: Five Quality Independent Office Assets
Five Quality Independent Office Assets Commerzone Porur Paradigm, Mindspace Malad Chennai | 1.1 msf Mumbai Region | 0.8 msf Completed Area: 1.1 msf; Committed Occupancy: 80.1% Completed Area: 0.8 msf; Committed Occupancy: 98.0% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8 msf
Slide 16: Marquee Tenant Base
Marquee Tenant Base Leading MNCs and Fortune 500 companies across sectors Technology Technology Financial Services Financial Services Diversified Diversified Accenture Wipro Barclays BNY Mellon Amazon Qualcomm Cognizant IBM Thryve UBS Fiserv Allstate Worley Parsons CSC L&T AMD Nvidia B.A. Continuum
Slide 17: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 29.7% (Sept 23) vs. 30.9% (Jun 23) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (29.7%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks L&T 4.
Slide 18: Lease Expiry Profile
Lease Expiry Profile 1.0 msf coming up for expiry in H2 FY24 Active discussions on with existing and new tenants Track record of achieving Re-leasing spread for renewal /re-leasing across parks Area Expiry (msf) Area Re-leased (since Apr 20) msf Rent at Expiry Average 23.3% 55.8 66.6 (INR psf) Re-le
Slide 19: Projects Updates
03 Projects Updates mindspacereit.com 19
Slide 20: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Pune Mumbai Region Mumbai Region Commerzone Kharadi Mindspace Airoli East Mindspace Airoli West Building 4 Highstreet Building 8- Data center ▪ Leasable area: ~1.0 msf ▪ Leasable area: ~0.05 msf ▪ Leasable area: ~0.3 msf ▪ Status: 7th Office level RCC Work in ▪ St
Slide 21: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Hyderabad Hyderabad Hyderabad Mindspace Madhapur Mindspace Madhapur Mindspace Madhapur (1A-1B Re-development) (Experience Center) (7/8 Re-development) ▪ Leasable area: 1.3 msf ▪ Leasable area: 0.13 msf ▪ Leasable area: 1.6 msf ▪ Status: Excavation under Progress ▪
Slide 22: Hotel at Mindspace Airoli East
Hotel at Mindspace Airoli East Hotel to enhance the offerings for tenants at the Park; Help create an integrated ecosystem Mixed use development Mindspace Airoli East 0.8 msf composite structure Proposed office and hotel block Perspective : External View (4) Received approval from the Board to 0.5 m
Slide 23: ROFO Assets to Add Further Scale And Growth
ROFO Assets to Add Further Scale And Growth Strong pipeline spread across Mumbai Region, Chennai and Hyderabad Current Current Hyderabad | 1.8 msf 3 currently Commerzone Raidurg identified assets Status: • Completed • 1.8 msf leased • Rent Commenced for Phase I and II 8.6 msf Perspective Current Che
Slide 24: Financial Updates
03 Financial Updates mindspacereit.com 24
Slide 25: Key Financial Metrics
Key Financial Metrics Delivered consistent growth on key financial metrics Revenue (INR mn) (1)(4) NOI (INR mn) (1)(3)(4) 5,997 4,912 5,604 4,545 5,360 186 (2) 4,364 186 (2) 4,974 4,172 4,916 3,997 4,014 4,365 4,703 5,254 3,737 4,419 3,595 4,237 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY2
Slide 26: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 6,040 Mn 7.8 % INR 56,697 Mn 19.8 % LTV(1) Cost of Debt 3.4 x (Jun 23 – 18.8%) Undrawn Committed (p.a.) Net Debt (1) Net Debt to EBITDA(4) Facilities (Jun 23 – 7.7%) Well staggered maturity profile Diversified debt Book with a mix of 7
Slide 27: Stable NOI Growth Driven by Effective Cost and Revenue Management
Stable NOI Growth Driven by Effective Cost and Revenue Management Revenue from Operations NOI (INR Mn) % of NOI Assets (INR Mn) Q2 FY24 Q2 FY23 H1 FY24 Q2 FY24 Q2 FY23 H1 FY24 Q2 FY24 Mindspace Airoli (E) 947 918 1,917 716 693 1,437 15% Mindspace Airoli (W) 867 625 1,709 636 434 1,263 13% Mindspace
Slide 28: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q2 FY24 (1) Revenue from Operations 6,213 Property Taxes & Insurance (184) Other Direct Operating Expenses (1,119) Net Operating Income (NOI) 4,912 Property Management Fees (139) Net Other Expenses (192) EBITDA(1) 4,579 Cash Taxes (Net of Refunds) (502) Working Cap
Slide 29: Price Performance & Unitholding
05 Price Performance & Unitholding mindspacereit.com 29
Slide 30: Price / Volume Performance & Movement
Price / Volume Performance & Movement (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 (NIFTY: +75.1%) (Mindspace REIT: +13.7%) (MSCI US REIT Index: +0.9%) (FTSE All Share REIT Index: -21.0%) Sep-23 Offer Price INR 275 p.u. Price on listing date INR 304
Slide 31: Unitholding Pattern as on 30 September 2023
Unitholding Pattern as on 30 September 2023 Unitholding Summary INR 18,608 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 186 Bn) (1) MF NIIs AIF 0.6% 10.6% 0.5% Insurance 1.5% NPS Sponsors & Sponsor Public 0.2% Group (Others) DIIs 3.4% Total 63.5% 36.5% Unit
Slide 32: Market Updates
06 Market Updates mindspacereit.com 32
Slide 33: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock 9M CY23* Eastern ▪ Thane-Belapur Road, BKC & Annex, SBD Central and Western Thane Suburbs Suburbs submarkets were the most active with respect to leasing 7.3% 12.4% Thane- activity in Q3 2023 Malad- Belapur Goregaon ▪ The leasing activity was dominated
Slide 34: Hyderabad Key Updates
Hyderabad Grade-A Office Stock 9M CY23 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Gachibowli 29.2% Peripheral East 10.0 18.0% 8.8 9.0 13.2% 16.6% 2.6% 8.5 9.0 16.0% 8.0 7.7 14.0% 6.7 Suburbs 7.0 Stock 5.9 12.0% Others 6.0 9.9% 4.8 2.9% 8.4% 116.3 msf 1.1% 10.0% 5.0 4.5
Slide 35: Pune Key Updates
Pune Grade-A Office Stock 9M CY23 Supply, net absorption and vacancy trend analysis Micro-Market : SBD East (1) Suburbs East, 2.4% CBD, 8.7% SBD West, 4 3.2 7.0% 8.0% 7.1% 13.9% 6.0% 7.0% 6.2% 7.0% 3 5.7% 2.6 5.0% 2.6 2.4 6.0% 5.8% Stock 3 2.2 5.0% 1.9 2.0 76.9 msf 1.8 1.8 2 1.7 1.6 1.6 1.5 1.5 4.0%
Slide 36: Chennai Key Updates
Chennai Grade-A Office Stock 9M CY23 Supply, net absorption and vacancy trend analysis Micro-Market : South-West(1) PBD West CBD 5.9% 10.2% Supply Net Absorption Vacancy PBD GST 17.0% 5.7% 3 18.0% 13.3% 2.0 16.3% 16.0% 2 1.8 14.0% 1.6 11.9% 8.2% 1.5 PBD OMR Stock 12.0% 2 1.4 24.4% 1.1 1.2 10.0% 72.8
Slide 37: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 37
Slide 38: Key Achievements and Awards
Key Achievements and Awards Mindspace REIT: Real Estate Excellence • 1st in India to score 100/100 as ‘Global Listed Sector Leader’ in Office Development Benchmark • Ranked 1st in Asia in ‘Listed Companies’ category for commercial development • Received 5 star rating for 2nd consecutive year, in GRE
Slide 39: ESG - Key Highlights
ESG - Key Highlights Scope 1+2 emission 15.5% 70,698.27 Renewable energy mix tCO2e for H1FY24 (13.3% reduction from FY20 baseline) 8,26,895 KL 61.9% of material Water Recycled sourced using sustainable sourcing INR 12Bn 3 of Cumulative Green Signed Green Leases Financing availed (0.4 msf) 32% 57.1%
Slide 40: Our Commitment to Build an ESG Centric Ecosystem
Our Commitment to Build an ESG Centric Ecosystem India’s first real estate entity to Signatory of EV100 Initiative Beach cleaning activity at Bandra’s join RE100 initiative beach – 140kg waste collected Durgam Cheruvu Lake Establishing a school with a capacity Great place to work Makeover, Hyderabad
Slide 41: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie CLAY SCULPTING ASTRO SESSION CANVAS PAINTING WORKSHOP WORKSHOP Conducted engaging activities with occupiers to energize the park mindspacereit.com 41
Slide 42: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie MOVIE SCREENING HEALTH TALKS HEALTH TALKS Over 5,000 employees across our business parks attended the events mindspacereit.com 42
Slide 43: Focus On High Corporate Governance Standards
Focus On High Corporate Governance Standards Strong governance framework complemented by partnership with leading institutional investors Mindspace REIT: Top-Notch Standards Seven Member Board / Independent • 57% independent directors on the Board Chairman • Manager can be removed with 60% approval
Slide 44: Annexure
08 Annexure mindspacereit.com 44
Slide 45: Mindspace REIT Structure
Mindspace REIT Structure Unitholders Investment in Distribution Mindspace REIT Investment Manager Trust Trustee K Raheja Corp Mindspace Business Axis Trustee Services Investment Managers Parks REIT Limited Private Limited(3) SPV: K Raheja IT SPV: Avacado SPV: Mindspace SPV: KRC SPV: Horizonview SPV:
Slide 46: Portfolio Summary
Portfolio Summary 26.1 msf of Completed area with Committed Occupancy of 86.5% & WALE of 6.9 years Total Committed WALE on Leasable Completed UC/Future Occupancy In-place Rent Asset Occupancy area Area Area (msf) Area (msf) (%) (INR psf) (%) (years) (msf) Mindspace Airoli East 5.6 4.7 0.8 82.7% 82.7
Slide 47: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q3-Q4 FY24 FY25 Asset % of Gross Rent at % of Gross Rent at Area Expiring Area Expiring Contracted Expiry Contracted Expiry (msf) (msf) Rentals (INR psf) Rentals (INR psf) Mindspace Airoli East 0.4 11.2% 60.6 0.2 5.7% 70.9 Mindspace Airoli West 0.1 1.7% 40.9 0.0 1.1%
Slide 48: Balance Sheet as on 30 Sep 23
Balance Sheet as on 30 Sep 23 Balance Sheet (INR Mn)(1) 30-Sep-23 30-Jun-23 Notes 1. All numbers are prior to minority Sources of Funds adjustment Total Equity 1,52,562 1,54,079 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Sub-Total 1,52,554 1,54,079 Money, Adv
Slide 49: Debt Maturity Schedule as on 30 Sep 23
Debt Maturity Schedule as on 30 Sep 23 Wt. Principal Repayment Interest Description Fixed/ Total Undrawn Principal Avg. Rate FY30 & (INR Mn) Floating Facility Facility O/S Maturity FY24 FY25 FY26 FY27 FY28 FY29 Total (p.a.p.m.) Beyond (Years) At REIT Level NCD (Tranche 1) Fixed 2,000 - 2,000 6.4% 0.
Slide 50: De-risked Portfolio with ~92.1% Completed Assets
De-risked Portfolio with ~92.1% Completed Assets Project wise Market Value breakup (1) Completed Assets form 92.1% of the Market Value(1) U/C & Total % of Complet Future Asset Value Total ed Dev. (INR Mn) (%) (INR Mn) (INR Mn) Under Mindspace Airoli East 42,968 1,437 44,404 15.5% Construction 5.0% M
Slide 51: Research Houses Covering Mindspace REIT
14 Research Houses Covering Mindspace REIT Research House Analyst Email Id Ambit Capital Karan Khanna karan.khanna@ambit.co Axis Capital Samar Sarda samar.sarda@axiscap.in Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Rajiv Berlia rajiv.berlia@citi.com Credit Suisse Lokesh Garg loke
Slide 52: Key Definitions
Key Definitions Asset SPVs Collectively, Avacado, Gigaplex, Horizonview, Intime, KRIT, KRC Infra, MBPPL and Sundew Occupied Area + Committed Area Committed Occupancy (%) Completed Area Committed Area Completed Area which is unoccupied but for which letter of intent/ agreement to lease have been sign
Slide 53: Thank You
Thank You Investor Relations Enquiries: Nitin Garewal (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 53
Mindspace Business Parks REIT — Q2 FY24 Earnings Presentation on 6ix