Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q3 FY2022 Earnings Presentation
42 slides from Brookfield India Real Estate Trust's earnings presentation, Feb 11, 2022
Slide 1: Q3 FY2022 Investor Update
Brookfield India Real Estate Trust Q 3 F Y 2 0 2 2 – I N V E S T O R U P D AT E F E B R U A R Y 11 , 2 0 2 2 CANDOR TECHSPACE G2, GURUGRAM
Slide 2: Disclaimer
Disclaimer By reading this presentation (the “Presentation”), you agree to be bound by the following limitations: This Presentation is for information purposes only without regard to specific objectives, financial situations or needs of any particular person, and should not be disclosed, reproduced,
Slide 3: Brookfield India Real Estate Trust
Brookfield India Real Estate Trust India’s first and only 100% institutionally managed REIT, achieving strong growth in the first year with a 32% increase in footprint 18.6 MSF 13.9 MSF Gurugram (4.0 MSF) Post N2 acquisition Noida (7.3 MSF) TOTAL AREA OPERATING AREA 3.9 0.1 5.5 1.9 39% 83% 87% 28% C
Slide 4: Brookfield India Real Estate Trust (Cont'd.)
Brookfield India Real Estate Trust (Cont’d.) Strong inorganic growth pipeline totalling 10.5 MSF in Gurugram and Mumbai CANDOR ROFO(1) PROPERTIES TECHSPACE G1 Gurugram (3.7 MSF) 3.7 MSF 6.7 MSF 3.7 0.1 LEASABLE AREA LEASABLE AREA 30% Rs 48B Rs 113B GROSS ASSET VALUE(2) GROSS ASSET VALUE(3) 70% Mumba
Slide 5: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities Acquired on January 24, 2022 Largest IT Park in a key technology hub of Noida Largest Office SEZ in Noida Mumbai’s only Private SEZ located in Powai CANDOR TECHSPACE, SECTOR 62, NOIDA (N1) CANDOR TECHSPACE, SECTOR 135, NOIDA (N2) KENSINGTON, POWAI, MUMBAI 2.
Slide 6: Candor Techspace N2 Acquisition
Candor Techspace N2 Acquisition On January 24, 2022, the REIT successfully completed the acquisition of Candor Techspace N2 for Rs 40 Billion 4.5 MSF 3.6 MSF TOTAL AREA OPERATING AREA 83% 100% COMMITTED EFFECTIVE ECONOMIC OCCUPANCY OCCUPANCY(1) Rs 40B 90% GROSS ASSET VALUE(2) OPERATING GAV(2) 8.2 Yr
Slide 7: Candor Techspace N2 Acquisition (Cont'd.)
Candor Techspace N2 Acquisition (Cont’d.) The acquisition has highly improved our operating metrics as showcased by a 35% increase in our Operating Area and c.400 bps increase in Effective Economic Occupancy(1) PRE-ACQUISITION POST-ACQUISITION PORTFOLIO PORTFOLIO TOTAL LEASABLE AREA 14.1 MSF 18.6 MS
Slide 8: Successful Preferential Issue
Successful Preferential Issue First preferential issue to institutional investors by an Indian REIT, with strong participation from the sponsor reiterating Brookfield Group’s commitment to our REIT PREFERENTIAL ISSUANCE ISSUE SIZE Rs 9.5 Billion SBI 10% Brookfield ISSUE PRICE Rs 294.25 / unit Group
Slide 9: Continued Leasing Traction Across Assets
Continued Leasing Traction Across Assets Assets managed by the Brookfield Group have seen strong leasing with marquee tenants, demonstrating the demand for high-quality, Grade-A institutional assets Q1 FY22 Q3 FY22 Q3 FY22 CANDOR TECHSPACE N2 CANDOR TECHSPACE G2 CANDOR TECHSPACE G1 (Identified Asset
Slide 10: ESG Accolades
ESG Accolades We continue to receive recognition for our ESG efforts across our properties 1ST PLACE STATE ENERGY CONSERVATION AWARD 2020 RATED ISO 9001, ISO PLATINUM RATINGS BY 14001 AND ISO 45001 BY IGBC(2) TUV SUD(1) Candor Techspace G2, Gurugram Awarded on January 11, 2022 Recognition received o
Slide 11: Market Updates
Market Updates CANDOR TECHSPACE N1, NOIDA
Slide 12: Technology Hiring Remains Strong for Top Multinationals
Technology Hiring Remains Strong for Top Multinationals Driven by strong order books, technology hiring is expected to continue in the foreseeable future. We envisage strong leasing recovery amidst back-to-office plans to seat this enhanced workforce EMPLOYEE HEADCOUNT (IN THOUSANDS) 24% 13% 21% 41%
Slide 13: Favorable Demand-Supply Dynamics
Favorable Demand-Supply Dynamics With absorption expected to outpace supply in the REIT micro-markets over the next three years, our assets are poised to realize occupancy gains STRONG DEMAND OUTLOOK LIMITED FUTURE SUPPLY AVERAGE NET ABOSROPTION IN REIT INDIA OFFICE – NEXT 3 YEAR SUPPLY MICRO-MARKET
Slide 14: Institutional Dominance
Institutional Dominance Our assets have accounted for more than half of the net absorption in their micro-markets in the last 5 years and are well-positioned to benefit from uptick in demand for office space REIT VERSUS MICRO-MARKET ABSORPTION(1) (MSF) (CY17 – CY21) 50%+ Share in 7.9 Absorption 4.6
Slide 15: Business Updates
Business Updates KENSINGTON, POWAI, MUMBAI
Slide 16: Q3 FY22 | Business Highlights
Q3 FY22 | Business Highlights We have witnessed strong leasing demand across our assets this quarter with 0.5 MSF of gross leasing and an additional 0.3 MSF of expansion options ~99% ~7% • Collections of operating lease rentals remained robust at ~99% Collections Operating Lease Avg. Escalation on 0
Slide 17: Q3 FY22 | Financial Highlights
Q3 FY22 | Financial Highlights We expect to see an uptick in NOI and NDCF in subsequent quarters on account of the recent leasing success, N2 acquisition and borrowing cost reduction OPERATING LEASE RENTALS NDCF BORROWING COST Rs 1,447 Million Rs 4.74 per unit c.40 bps 4.3% YOY decrease Rs 17.59 per
Slide 18: Q3 FY22 | Distributions
Q3 FY22 | Distributions We are distributing Rs 5.00 per unit for Q3 FY22, of which 34% will be tax-free Millions Q3 FY22 Income from Operating Lease Rentals Rs 1,447 CAM / Other Revenue 504 Rs 1,514 Million Rs 5.00 DISTRIBUTION DISTRIBUTION PER UNIT CAM / Other Direct Expenses (449) NOI Rs 1,502 Oth
Slide 19: Significantly Complete and Stable Portfolio
Significantly Complete and Stable Portfolio 92% of gross asset value is in operating properties, which are 83% occupied with a long- dated WALE of 7.3 years Area ( in MSF) Leased Area Metrics In-place Asset Dev. Area # Office Committed/ WALE Asset Operating Total Rent Value(3) Potential in MSF Tenan
Slide 20: Deep Rooted Tenant Relationships
Deep Rooted Tenant Relationships Technology-led, high credit quality tenant roster, with an established track record of tenant expansion SECTOR DIVERSIFICATION OF TENANTS TOP 10 TENANTS BY LEASED AREA % Leased Growth since Tenant # Parks Area Mar 15(1) Others, 8% Healthcare, TCS 3 14% - Technology,
Slide 21: New Leasing and Renewals
New Leasing and Renewals Gross leasing of 536,000 SF during the quarter with a robust near-term pipeline SIGNED LEASES / RENEWALS(1) Tenant / Industry Industry Assets XPO India Business Services Kensington L&T Hydrocarbon Oil & Gas Kensington Rs 82.4 PSF Legato Healthcare G2 AVERAGE RENT ON NEW LEAS
Slide 22: New Leasing and Renewals (Cont'd.)
New Leasing and Renewals (Cont’d.) Portfolio has a well staggered lease expiry profile and provides an opportunity to capture an attractive mark-to-market spread KEY HIGHLIGHTS LEASE EXPIRY SCHEDULE Area Expiring (MSF) Renewed Cumulative Expiry (% of Rentals) • Expiries: 237,000 SF area vacated duri
Slide 23: Financial Updates
Financial Updates CANDOR TECHSPACE N1, NOIDA
Slide 24: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet MILLIONS DECEMBER 31, 2021 Liabilities and Equity Total Equity Rs 80,418 Borrowings(1) 22,327 Security Deposits 3,642 Other Liabilities 1,966 Total Rs 108,354 Assets Investment Property Rs 98,910 Investment Prop
Slide 25: Post Acquisition Capital Structure
Post Acquisition Capital Structure Simple capital structure, low-cost asset level debt and significant debt headroom will continue to be our strengths post acquisition DEBT SUMMARY KEY DEBT FEATURES AMOUNT INTEREST (BILLION) COST P. A.(4) Asset-level No zero-coupon Debt features Pre-acquisition Port
Slide 26: NDCF | Walkdown
NDCF | Walkdown Millions Stub FY21 + Q1 FY22 Q2 FY22 Q3 FY22 Stub FY21 + 9M FY22 Income from Operating Lease Rentals Rs 2,559 Rs 1,561 Rs 1,447 Rs 5,568 CAM / Other Revenue 941 556 504 2,000 Revenue from Operations Rs 3,500 Rs 2,117 Rs 1,951 Rs 7,568 CAM / Other Direct Expenses (787) (489) (449) (1,
Slide 27: Inorganic Growth Pipeline
Inorganic Growth Pipeline CANDOR TECHSPACE G1, GURUGRAM
Slide 28: Brookfield Group's Footprint in India
Brookfield Group’s Footprint in India Brookfield Group owns a 100% interest in a high quality pan-India office portfolio spanning 28 MSF in total area and 20 MSF of operating area POWAI DISTRICT, MUMBAI ECOWORLD, BANGALORE CANDOR G1, GURUGRAM EQUINOX, MUMBAI ECOSPACE, BANGALORE CATEGORY CANDOR TECHS
Slide 29: Candor Techspace G1
Candor Techspace G1 Candor Techspace G1 achieved 100% completion during the year and is currently under lease up 3.7 MSF 100% TOTAL AREA COMPLETED 76% 90% COMMITTED SAME-STORE OCCUPANCY OCCUPANCY(1) Rs 48B Rs 71 PSF GROSS ASSET VALUE(2) IN-PLACE RENT 90% 99%+ MNC Tenants Collections for Q3 FY22 7.9
Slide 30: Environment, Social & Governance Updates
Environment , Social & Governance Updates CANDOR TECHSPACE N2, NOIDA
Slide 31: Our ESG Strategy
Our ESG Strategy Committed to industry-leading sustainable development to deliver long-term value to our business, partners and communities OUR GUIDING PRINCIPLES OUR DECARBONIZATION COMMITMENT Mitigate the impact of our operations on the environment Committed to NET ZERO Be good stewards in the com
Slide 32: Key Ongoing ESG Initiatives
Key Ongoing ESG Initiatives Through continuous improvements we ensure efficient, resilient, future-fit assets that support the needs of our tenants, communities and the planet Integrating automation and smart building management EFFICIENCY systems led to increased operational efficiency ENERGY 6% Up
Slide 33: Progress on Net Zero
Progress on Net Zero We are actively tracking our emissions and are closely working with all our stakeholders to achieve a Net Zero carbon future by 2050 or sooner GREENHOUSE GAS EMISSIONS (‘000 Mt CO2e) ENERGY CONSUMPTION (MILLION UNITS) 17 2 1 99 0 127 123 85 62 76 69 45 FY19 FY20 FY21 YTD FY22 FY
Slide 34: Appendix
Appendix CANDOR TECHSPACE N2, NOIDA
Slide 35: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule In-place rent at Expiry (Rs Year / Asset Area Expiring (‘000 SF) % of Gross Rentals(1) PSF)(1) Q4 FY22E Kensington - - - G2 49 2% 90 N1 24 2% 41 N2 127 4% 51 K1 92 4% 48 Total – REIT 291 2% Rs 53 FY23E Kensington 373 28% Rs 104 G2 90 3% 90 N1 15 2% - N2 59 2% 55 K1 76
Slide 36: Ongoing Capex and Upgrades
Ongoing Capex and Upgrades Rs 2,778 Million of capex projects underway across new tower developments and upgrades to existing towers. Capex including interest during construction to be financed through debt ESTIMATED PENDING COSTS ONGOING PROJECTS COMPLETION DATE (MILLIONS) Asset Upgrades/Tenant Imp
Slide 37: Property Income | Walkdown
Property Income | Walkdown MILLIONS Q3 FY22 Q3 FY21 KEY DRIVERS Income from Operating Lease • Rs 65 million / 4.3% YOY decrease due to new vacancies Rs 1,447 Rs 1,512 offset by contractual escalations Rentals (OLR) • Rs 117 million / 18.8% YOY decrease primarily due to new (+) CAM / Other Revenue 50
Slide 38: Property Income | Consolidation Details
Property Income | Consolidation Details INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) Q3 FY22 Q3 FY21 Q3 FY22 Q3 FY21 Q3 FY22 % OLR Q3 FY21 % OLR Kensington Rs 399 Rs 373 Rs 430 Rs 419 Rs 364 91% Rs 363 97% G2 523 616 721 916 533 102% 665 10
Slide 39: Structure and Indebtedness
Structure and Indebtedness Manager (BMSPL) 100% 100% 100% 100% SPV DEBT SUMMARY (MILLIONS)(1) FPPL CKOHSPL SPPL CIOP ASSETS KENSINGTON G2 + K1 N1 CIOP TOTAL Shareholder Debt by REIT (12.5% p.a.p.q.) Rs 7,775 Rs 23,234 Rs 3,893 - Rs 34,902 External Debt (7.15% p.a.p.q.) 6,800 13,150 2,550 - 22,500 To
Slide 40: Research Coverage
Research Coverage RESEARCH HOUSE ANALYST EMAIL ID Ambit Karan Khanna Karan.Khanna@ambit.co Bank of America Kunal Tayal Kunal.Tayal@bofa.com HSBC Bank Puneet Gulati PuneetGulati@hsbc.co.in ICICI Securities Adhidev Chattopadhyay Adhidev.Chattopadhyay@icicisecurities.com IIFL Mohit Agarwal Mohit.Agrawa
Slide 41: Glossary (1/2)
Glossary (1/2) Gross Asset Value / Asset Value The market value as determined by the Valuer as of September 30, 2021 (Occupied Area + Completed Area under Letters of Intent) Committed Occupancy In % Completed Area Represents Committed Occupancy for areas where the occupancy certificate was received
Slide 42: Glossary (2/2)
Glossary (2/2) Revenue from leasing of premises including Warm Shell rent, fit-out rent and car parking Operating Lease Rentals (OLR) Income Net Operating Income calculated by subtracting Direct Operating Expenses from Revenue Net Operating Income (NOI) from Operations Net distributable cash flows (
Brookfield India Real Estate Trust — Q3 FY2022 Earnings Presentation on 6ix