Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Merger or Acquisition (May 2023)
47 slides from Brookfield India Real Estate Trust's merger presentation, May 18, 2023
Slide 1: Downtown Powai and Candor Techspace G1 Acquisition Presentation
Brookfield India Real Estate Trust D O W N T O W N P O WAI AN D C AN D O R T E C H S PAC E G 1 AC Q U I S I T I O N P R E S E N TAT I O N M AY 1 8 , 2 0 2 3 DOWNTOWN POWAI, MUMBAI CANDOR TECHSPACE G1, GURUGRAM
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION DOES NOT CONSTITUTE A PROSPECTUS, PLACEMENT DOCUMENT, OFFERING CIRCULAR OR OFFERING MEMORANDUM UNDER THE REIT REGULATIONS OR ANY OTHER APPLICABLE LAW IN INDIA OR IN ANY OTHER JURISDICTION. NO OFFER OR INVITATION OR RECOMMENDATION OR SOLICITATION OR INDUCEMENT IS BEING MA
Slide 3: Transaction Summary
Transaction Summary Brookfield India REIT (“BIRET”) and GIC(1) have signed binding agreements to acquire, in a 50-50 partnership, a 6.5 MSF operating portfolio for a total consideration of Rs 112,250 Million • Transaction #1: Acquisition of 50% interest in Downtown Powai, Mumbai (“Downtown Powai”) P
Slide 4: Strategic Partnership with GIC
Strategic Partnership with GIC First Indian REIT to set up a long term partnership with the global institutional investor, securing c.Rs 33 Billion (c.US$ 400 Million) commitment towards the transactions Institutional Owner and Long Term Investor Operator One of the largest owners of One of the larg
Slide 5: Transaction #1: Downtown Powai
Transaction #1: Downtown Powai Prime office and high-street retail portfolio in Mumbai, located near BIRET-owned Kensington Nine Grade A properties in one of Mumbai’s most prime locations 2.7 MSF 89% Rs 65.0 B 5.8% LEASABLE AREA(1) COMMITTED OCCUPANCY ACQUISITION PRICE DISCOUNT TO GAV AT ACQUISITION
Slide 6: Transaction #2: G1
Transaction #2: G1 One of the largest high-quality integrated office campuses in Gurugram (Delhi NCR) Leading Grade A SEZ campus spread over a 25 acre footprint 3.8 MSF 100% Rs 47.25 B 5.8% LEASABLE AREA(1) EFFECTIVE ECONOMIC ACQUISITION PRICE DISCOUNT TO GAV AT OCCUPANCY(2) ACQUISITION PRICE(3) (1)
Slide 7: Addition of Fully Built Properties
Addition of Fully Built Properties We are adding two highly complementary, fully built properties to our portfolio Area (in MSF) Leased Area Metrics Valuation Metrics In-place Area Committed / WALE GAV Operating Asset Operating Total Rent in MSF Econ. Occ. %(2) (Yrs.) (Rs Billion) GAV % (Rs PSF) Ken
Slide 8: Large Scale Acquisitions
Large Scale Acquisitions We continue to execute on inorganic growth with our pro-forma portfolio slated to grow by 2.0x in area and 2.6x in income since IPO AT IPO PRO-FORMA PORTFOLIO (March 2021) (March 2023) Rs 16,478 M Rs 6,347 M 20.6 MSF Scale(1) 10.3 MSF Operating Area Consol. Adj. NOI Operatin
Slide 9: Large Scale Acquisitions (Cont'd.)
Large Scale Acquisitions (Cont’d.) Pro-forma for these transactions, our portfolio will grow to over 25 MSF, with our Sponsor Group continuing to own another 25 MSF across India Area (in MSF) G2 Delhi N1, N2 Future (Gurugram) NCR (Noida) Total Operating Dev. G1 Current Portfolio 18.7 14.3 4.4 (Gurug
Slide 10: Funding of the Acquisitions – Sources and Uses
Funding of the Acquisitions – Sources and Uses Funding through a combination of Institutional Placement(1) by BIRET, investment by GIC and refinancing of debt (33.6%(2) pro-forma LTV post acquisitions) SOURCES OF FUNDS(3,4) Rs Million USES OF FUNDS(3,4) Rs Million BIRET Equity Issuance Rs 34,000 Con
Slide 11: Investment Highlights
Investment Highlights • High-quality assets, consolidating our presence in Mumbai and Delhi NCR as a top office landlord • Increase in Operating Area by 44% to 20.6 MSF and Consolidated GAV by 73% to Rs 283 Billion Increased 1 Scale • Target Assets have an Effective Economic Occupancy of 96% and wil
Slide 12: Increased Scale
1 Increased Scale The acquisitions will increase our Operating Area by 44% and Consolidated GAV by 73% OPERATING AREA CONSOLIDATED GAV FY23 CONSOLIDATED MSF Rs Billion ADJUSTED NOI Rs Million 283 16,478 20.6 96% 14.3 164 9,608 94% Current Portfolio Pro-forma Portfolio Current Portfolio Pro-forma Por
Slide 13: Increased Scale (Cont'd.)
1 Increased Scale (Cont’d.) The acquisitions will increase our Effective Economic Occupancy(1) by c.200bps, while adding a higher rent portfolio which will improve the in-place PSF rent by 23% to Rs 80 PSF CURRENT PRO-FORMA PORTFOLIO PORTFOLIO TOTAL LEASABLE AREA 18.7 MSF 25.2 MSF +35% OPERATING ARE
Slide 14: Improved Diversification | Geography
2 Improved Diversification | Geography Increase in Consolidated GAV share of Mumbai to 33% and Gurugram to 34% CONSOLIDATED GAV BY GEOGRAPHY CURRENT PORTFOLIO PRO-FORMA PORTFOLIO Mumbai Mumbai 15% 33% Gurugram 34% Gurugram 28% Kolkata 16% Rs 164 B Rs 283 B Noida Kolkata 41% 10% Noida 24% 14
Slide 15: Improved Diversification | Tenancy
2 Improved Diversification | Tenancy The Target Assets will bolster our tenant roster by adding large MNCs with sizeable footprints PRO-FORMA PORTFOLIO - TOP 10 TENANTS(1) % Gross Tenant Sector Contracted % Leased Area 61 Rentals #OFFICE TENANTS Accenture Consulting 10% 10% Technology 8% 10% Cogniza
Slide 16: Improved Diversification | Tenancy
2 Improved Diversification | Tenancy Significant reduction in our top five tenant concentration from 52% to 32%, and diversification of sector exposure through a higher share of BFSI from 12% to 22% CURRENT PORTFOLIO PRO-FORMA PORTFOLIO CONCENTRATION OF TOP FIVE TENANTS(1) Top 5 Others 32% 37% Top 5
Slide 17: Accretive Acquisitions
3 Accretive Acquisitions Acquisitions are at a 5.8% average discount to Consolidated GAV(1) and are expected to result in a 4.5% NDCF accretion DISCOUNT TO CONSOLIDATED GAV(1) ACCRETIVE TO NDCF (FY23)(2) Rs Billion Rs per Unit Rs 21.15 Rs 119 B Rs 112.25 B Rs 20.25 Consolidated GAV Acquisition Price
Slide 18: Accretive Acquisitions | Incremental NDCF
3 Accretive Acquisitions | Incremental NDCF Rs Million, except per unit data FY23 REMARKS Reported Net Operating Income (NOI) Rs 6,870 Income Support 1,136 • As per the G1 Income Support Agreement • Working capital, G&A expenses, adjusted for one time items; Net debt drawdown to account for capital
Slide 19: Post Acquisition Capital Structure
Post Acquisition Capital Structure Acquisition is proposed to be financed by Rs 34 Billion equity fund raise which will increase the market cap by 37%. Approved sanctions in-place to refinance the existing debt in the Target SPVs MARKET CAPITALIZATION OF BIRET(1,2) INDICATIVE DEBT SUMMARY(2) AMOUNT
Slide 20: Fund-raising Scenarios
Fund-raising Scenarios Sensitivity analysis of BIRET’s NDCF accretion in various scenarios % NDCF ACCRETION ISSUE PRICE PER UNIT Institutional Placement(1) Pro-forma (Rs Million) LTV (%)(2) Rs 275 Rs 280 Rs 285 Rs 290 Rs 295 Rs 34,000 33.6% 4.5% 5.0% 5.5% 5.9% 6.4% 32,250 34.9% 4.3% 4.8% 5.3% 5.7% 6
Slide 21: Corporate Governance Framework
Corporate Governance Framework The acquisitions and associated fund raising will be completed in accordance with highest levels of corporate governance • Acquisition Price of the Target Assets is at Rs 112,250 Million, at 5.8% discount to the average of Pricing & Market valuations received from the
Slide 22: Income Support for G1
Income Support for G1 Income Support by Brookfield Group provides high cash flow visibility at 100% Effective Economic Occupancy ELIGIBLE AREA UNDER INCOME SUPPORT(1) 2 0.9 3.7 Area in MSF 2.8 1 0.3 G1 Leased Area G1 Vacant Area Operating Area 1 Operating Area which is currently leased but expected
Slide 23: Target SPVs Holding Structure
Target SPVs Holding Structure TRUSTEE MANAGER Axis Trustee Services Brookprop Management Limited Services Private Limited 100% 100% 100% 100% 100% 50% 50% 50% 50% OPERATIONAL ASSET SPV SERVICE ASSET SPV ASSET SPV ASSET SPV ASSET SPV ASSET SPV PROVIDER Candor Kolkata Shantiniketan Seaview Kairos Prop
Slide 24: Transaction #1 - Downtown Powai
Transaction #1 - Downtown Powai DOWNTOWN POWAI
Slide 25: Acquisition of Downtown Powai
Acquisition of Downtown Powai Prime office and high-street retail portfolio in Mumbai with 89% occupancy across 9 buildings over 2.7 MSF, located near BIRET-owned Kensington Delphi Spectra Fairmont Winchester 25 Source: Company Data
Slide 26: Downtown Powai Layout
Downtown Powai Layout Properties are spread around three commercial clusters – South Avenue, Central Avenue, and Orchard Avenue, which are the three key arterial roads in the integrated township Kensington (part of Current Portfolio) Downtown Powai (Target Asset) ROFO Assets 26
Slide 27: Proven Track Record
Proven Track Record Under Brookfield Group’s ownership and management, the Downtown Powai portfolio has maintained high occupancy levels while achieving a strong rental CAGR(1) Committed Occupancy In-place Rent (Rs PSF PM) 1.2 MSF New leasing 200% 170 since April 1, 2017 180% Rs 163 150 Rs 158 160%
Slide 28: Strategically Located
Strategically Located DTP is well connected to the major catchments of the city through convenient public transportation infrastructure Powai and BKC – the only 2 major office hubs with East-West metro lines Intersection with metro lines connects Powai seamlessly to all parts of Mumbai All major art
Slide 29: Tenant Roster
Tenant Roster Marquee tenancy comprising major global BFSI clients TOP 10 TENANTS LEASE ROLLOVER PROFILE % Gross % Leased • Standard lease term for new leases is 5 years, resulting in a lower WALE Tenant Sector Contracted Area • Portfolio has a strong track record of renewal success (66%), with over
Slide 30: Leasing Success
Leasing Success Demonstrated track record of expansion and re-leasing at significant mark-to-market EXPANSION TRACK RECORD Area in SF Global Consulting Company Global BFSI Company 350,000 350,000 300,000 289,000 300,000 250,000 228,000 250,000 216,000 200,000 200,000 150,000 150,000 122,000 100,000
Slide 31: Strategic Capital Investments
Strategic Capital Investments Continually upgraded our assets and amenities to create value and improve tenant experience DELPHI B WINCHESTER FAIRMONT BEFORE AFTER 31
Slide 32: Active Placemaking
Active Placemaking Strategic capital investments have enhanced asset and income profile GLA REPURPOSING : DELPHI GLA EXPANSION : VENTURA A • Achieved 88% rental re-rating by repurposing office areas to prime • Budgeted capital expenditure of c. Rs 440 M high street retail areas • c. 80,000 SF of new
Slide 33: Commitment to ESG
Commitment to ESG ESG program at Downtown Powai has undergone a significant transformation under Brookfield ownership and management KEY INITIATIVES AWARDS & RECOGNITION • Transitioned to 100% renewable power for all common areas • 100% transition to LED Lighting for common areas • EV Charging stati
Slide 34: Funding of the Acquisition – Sources and Uses
Funding of the Acquisition – Sources and Uses Funding through a combination of Institutional Placement(1) by BIRET, investment by GIC and refinancing of debt (33.4%(2) pro-forma LTV post acquisition) SOURCES OF FUNDS(3,4) Rs Million USES OF FUNDS(3,4) Rs Million BIRET Equity Issuance Rs 19,396 Consi
Slide 35: Accretive Deal Metrics | Incremental NDCF
Accretive Deal Metrics | Incremental NDCF Rs Million, except per unit data FY23 REMARKS Reported Net Operating Income (NOI) Rs 4,121 • Working capital, G&A expenses, adjusted for one time items; Net debt drawdown to account for capital Debt Financing, Working Capital, and Others 1,920 expenditure an
Slide 36: Acquisition Price
Acquisition Price Acquisition Price is at a 5.8% discount to the average of two independent valuations Rs MILLION INDEPENDENT VALUATION ASSET MSF VALUER 1(1) VALUER 2(2) AVERAGE % TOTAL PSF Operating Area 2.7 Rs 67,308 Rs 67,704 Rs 67,506 98% Rs 25,428 Under Construction 0.1 1,707 1,280 1,494 2% 20,
Slide 37: Transaction #2 – Candor Techspace G1
Transaction #2 – Candor Techspace G1 CANDOR TECHSPACE G1
Slide 38: Acquisition of G1
Acquisition of G1 Platinum certified 3.8(1) MSF integrated office campus in Gurugram (Delhi NCR) with proximity to social and residential infrastructure and Delhi – Mumbai expressway 38 (1) Includes c.104,000 SF of future development potential.
Slide 39: Proven Track Record
Proven Track Record Consistently maintained high committed occupancy while adding 2.7 MSF of new area Operating Area (MSF) Committed Occupancy Same Store Occupancy (1) 2.7 MSF Area delivered 100% 100% 97% since April 1, 2015 6.0 93% 94% 93% 100% 90% 89% 86% 90% 77% 5.0 73% 75% 80% 70% 2.1 MSF 4.0 3.
Slide 40: Strategic Location
Strategic Location Candor TechSpace, Sector 48, Gurugram is located in a vibrant community with a mix of residential and commercial hubs Well-connected to the NCR region through roadways and metro Close proximity to Indira Gandhi International Airport All major arterial roads Rapid Metro within 10km
Slide 41: Tenant Roster
Tenant Roster Diversified mix of Technology and GCC clients with limited expiry till FY28E TOP 10 TENANTS LIMITED LEASE ROLLOVER % Gross % Leased Area Expiring (SF) Tenant Sector Contracted Area Rentals Cumulative Expiry (% of Area) Capgemini Technology 19% 20% 392,000 307,000 SF is expected to expi
Slide 42: Leasing Success
Leasing Success High-quality office park with an established track record of expansion by global tenants EXPANSION TRACK RECORD Area in SF Global Technology Company Global Telecom Company Global Analytics Company 600,000 561,000 350,000 350,000 300,000 300,000 224,000 500,000 250,000 250,000 400,000
Slide 43: Commitment to ESG
Commitment to ESG ESG program at Candor G1 has undergone a significant transformation under Brookfield ownership and management KEY INITIATIVES AWARDS & RECOGNITION • Minimizing diesel usage to <1% of total power consumption through investments in 66 kV power substation • 468 kWp solar rooftop power
Slide 44: Funding of the Acquisition – Sources and Uses
Funding of the Acquisition – Sources and Uses Funding through a combination of Institutional Placement(1) by BIRET, investment by GIC and refinancing of debt (32.8%(2) pro-forma LTV post acquisition) SOURCES OF FUNDS(3,4) Rs Million USES OF FUNDS(3,4) Rs Million BIRET Equity Issuance Rs 14,604 Consi
Slide 45: Accretive Deal Metrics | Incremental NDCF
Accretive Deal Metrics | Incremental NDCF Rs Million, except per unit data FY23 REMARKS Reported Net Operating Income (NOI) Rs 2,750 Income Support 1,136 • As per the G1 Income Support Agreement • Working capital, G&A expenses, adjusted for one time items; Net debt drawdown to account for capital De
Slide 46: Acquisition Price
Acquisition Price Acquisition Price is at a 5.8% discount to the average of two independent valuations Rs MILLION INDEPENDENT VALUATION ASSET MSF VALUER 1(1) VALUER 2(2) AVERAGE % TOTAL PSF Operating Area 3.7 Rs 49,401 Rs 49,707 Rs 49,554 99% Rs 13,413 Future Development 0.1 548 671 610 1% 5,867 Pot
Slide 47: Basis of Presentation of Pro-forma and Certain Other Information
Basis of Presentation of Pro-forma and Certain Other Information Pro-forma Metrics In this Presentation, BIRET presents certain unaudited, pro-forma operational and financial metrics (the “Pro-forma Metrics”) as of and for the 12 months ended March 31, 2023, as adjusted to give effect to all of the
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