Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q1 FY23 Earnings Presentation
50 slides from Mindspace Business Parks Reit's earnings presentation, Aug 10, 2022
Slide 1: Q1 FY23 Results Presentation
Q1 FY23 Results Presentation 10th August 2022 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 09 Projects Update 16 Financial Update 21 Price Performance & Unitholding 25 Market Updates 28 Sustainable Growth 34 Annexures 40 Note: 1. All the financial numbers in the presentation have been rounded off unless otherwise stated 2. Mindspace Busi
Slide 4: Key Updates
Key Updates mindspacereit.com 4
Slide 5: Mindspace REIT – At a Glance (Q1 FY23)
Mindspace REIT – At a Glance (Q1 FY23) 1 Operating Highlights 0.9 msf 0.4 msf 0.5 msf 36.4 % INR 63 psf/month New and Vacant Area Re-leasing Spread (1) Average Rent for Area Gross Leasing Re-leased Area Leased on 0.5 msf Leased 2 Financial Highlights INR 2,811 Mn 6.9 % INR 4,014 Mn INR 9.9 Bn 6.9 %
Slide 6: Leasing Overview – Q1 FY23
Leasing Overview – Q1 FY23 0.9 msf leases signed across 18 tenants and achieved 36.4%(1) re-leasing spread on 0.5 msf(1) 0.87 msf INR 63 psf/month 36.4 % Q1 FY23 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q1 FY23 – Gross leasing Area Re-leased (2) 0.35 msf Leased Assets
Slide 7: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Performance driven by optimal revenue and cost management Growth Growth (in INR Mn) Q1 FY22 Q4 FY22 Q1 FY23 (q-o-q) (y-o-y) Revenue from Operations(1) 4,218 4,703 4,916 4.5% 16.3% NOI(1) 3,618 3,997 4,014 0.4% 10.9% Q1 FY23 - Revenue growth of 16.3% on y-o
Slide 8: Distribution for Q1 FY23
Distribution for Q1 FY23 Over 90% distributions are in the form of tax-exempt dividends Key Dates Distribution Yield (1) 6.9% Period Apr 22 to Jun 22 Distribution Amount INR 2,811 Mn Outstanding Units 593,018,182 Declaration Date 10 Aug 22 Interest ₹0.32 Record Date 16 Aug 22 6.8% Distribution per u
Slide 9: Portfolio Overview
Portfolio Overview mindspacereit.com 9
Slide 10: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 31.8 msf INR 62.4 psf Total Leasable Area (1) In-place Rent 85.4% 85.6% Same Store Committed Committed Occupancy Occupancy on 23.9 msf on 24.4 msf ` Mumbai Region Hyderabad 14.8% 6.8 years 12.9 msf (40.6 %) 12
Slide 11: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 11.7 msf Mumbai Region | 6.8 msf Completed Area: 9.9 msf; Committed Occupancy: 90.6% Completed Area: 4.7 msf; Committed Occupancy: 88.3% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Region
Slide 12: Five Quality Independent Office Assets
Five Quality Independent Office Assets Commerzone Porur Paradigm, Mindspace Malad Chennai | 0.8 msf (1) Mumbai Region | 0.7 msf Completed Area: 0.8 msf; Committed Occupancy: 36.5% Completed Area: 0.7 msf; Committed Occupancy: 93.6% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8
Slide 13: 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 Verizon L&T AMD Nvidia B.A. Contin
Slide 14: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Reduced concentration risk with top 10 tenants contributing 36.3% (Jun 22) vs. 38.6% (Jun 21) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (36.3%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contr
Slide 15: Lease Expiry Profile
Lease Expiry Profile Only 4-5% of portfolio is coming up for expiry each year over next 3 years Strong re-leasing achieved as macro environment Track record of achieving Re-leasing spread continues to improve across parks Area Expiry (msf) Area Re-leased (since Apr 19) msf Rent at Expiry (INR psf) 5
Slide 16: Projects Updates
Projects Updates mindspacereit.com 16
Slide 17: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Mumbai Region Pune Mumbai Region Mindspace Airoli West Commerzone Kharadi Mindspace Airoli West (B9) (B5) (Data Center) ▪ Leasable area: 1.1 msf ▪ Leasable area: 0.7 msf ▪ Leasable area: 0.3 msf ▪ Status: Façade, Entrance and ▪ Status: Façade, Lobby Finishes WIP ▪
Slide 18: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Pune Hyderabad Mumbai Region Perspective Perspective Perspective Commerzone Kharadi Mindspace Madhapur Mindspace Airoli East (B4) (1A-1B Re-development) (High Street Retail And F&B ) ▪ Leasable area: 1.0 msf ▪ Leasable area: 1.3 msf ▪ Leasable area: 0.05 msf ▪ Sta
Slide 19: Mindspace Madhapur, Hyderabad – Upgrade
Mindspace Madhapur, Hyderabad – Upgrade Integrated “Business Ecosystem” with various on-site facilities and amenities Elevated Boardwalks for Ease of Movement – Phase 1 – Completed Bus bay canopy placement - Completed Building Façade – Front elevation Completed Entrance Lobby Upgrade - Completed min
Slide 20: ROFO Update - Commerzone Madhapur, Hyderabad
ROFO Update - Commerzone Madhapur, Hyderabad Project Details Perspective Total land area 9.07 acres Land ownership Freehold Leasable Area 1.82 msf 1.82 msf Pre-leased (including 0.2 msf of hard option area) 2 B + 2 Stilt + 1 G + 20 office Configuration floors Occupancy certificate Perspective Comple
Slide 21: Financial Updates
Financial Updates mindspacereit.com 21
Slide 22: 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) Q1 FY22 Q1 FY23 Q1 FY22 Q1 FY23 Q1 FY23 Mindspace Airoli (E) 902 948 716 708 18% Mindspace Airoli (W) 479 565 396 402 10% Mindspace Malad 185 200 160 176 4% The Square BKC
Slide 23: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q1 FY23 Revenue from Operations(1) 4,916 Property Taxes & Insurance (153) Other Direct Operating Expenses (749) Net Operating Income (NOI) 4,014 Property Management Fees (118) Net Other Expenses (98) EBITDA(1) 3,798 Cash Taxes (Net of Refunds) (433) Working Capital
Slide 24: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth Low Net debt to market value of 16.6%(1) INR 44,446 Mn 16.6 % INR 3,805 Mn 6.9 % 5.8 years Net Debt to Undrawn Committed Cost of Debt Net Debt Market Value (1) Wt. Avg. Maturity Facilities (p.a.) Well staggered Debt expiry profile Facility
Slide 25: Price Performance & Unitholding
Price Performance & Unitholding mindspacereit.com 25
Slide 26: Price / Volume Performance & Movement
Price / Volume Performance & Movement (1) Price movement of Mindspace REIT Stock Symbol – NSE : Mindspace; BSE : 543217 110 105 100 (Mindspace REIT: +0.3%) 95 90 (Nifty : -16.9%) 85 (NIFTY Realty: -41.5%) 80 75 70 01-Apr-22 01-May-22 01-Jun-22 30-Jun- 22 Mindspace REIT Nifty 50 Nifty Realty Offer Pr
Slide 27: Unitholding Pattern as on 30 Jun 22
Unitholding Pattern as on 30 Jun 22 Unitholding Summary INR 20,799 Cr 37 % Market Cap (1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 20.8 Bn) (1) MF NIIs 9.5% NPS 0.2% Insurance 0.1% 1.1% Sponsors & Sponsor Public AIFs Group (Others) FIIs 0.6% 63% 37% 21.9% 32,727 Total Unithol
Slide 28: Market Updates
Market Updates mindspacereit.com 28
Slide 29: Key Factors Reinforcing the Long-Term Real Estate Demand
Key Factors Reinforcing the Long-Term Real Estate Demand Strengthening Economic Conditions • India is expected to be the fastest growing major economy in FY23 • Quarterly GST collections show strong growth • FDI inflow stood at USD 83.6 Bn in FY22 (higher than pre-COVID levels of USD 74.4 Bn in FY 2
Slide 30: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock H1 CY2022 Thane Worli-Lower ▪ The average annual net absorption in Mumbai was 3.4 msf 10.0% Parel between 2016 to H1 2022 12.3% ▪ With the pandemic situation under control, employees Others returning to their offices, and the subsequent rise in office 1
Slide 31: Hyderabad Key Updates
Hyderabad Grade-A Office Stock H1 CY2022 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Supply Net Absorption Vacancy Madhapur 62.7% Others 8.0 7.4 7.5 12.0% 10.0% 10.9% 2.2% 7.0 10.0% 6.0 6.6% Stock 4.5 4.7 8.0% Peripheral 5.0 82.6 msf East 4.0 3.7 3.8 4.0 3.6 6.0% 3.2 3.
Slide 32: Pune Key Updates
Pune Grade-A Office Stock H1 CY2022 Supply, net absorption and vacancy trend analysis Micro-Market(1): SBD East Others 10.7% Supply Net Absorption Vacancy PBD West 3.0 9.0% 22.7% 2.6 8.3% 8.0% 8.0% 2.5 2.4 2.1 7.0% 5.1% 5.9% 1.9 5.6% 1.8 Stock 2.0 6.0% 1.6 1.6 1.5 5.0% 62.9 msf 1.5 1.3 3.5% 1.2 1.1
Slide 33: Chennai Key Updates
Chennai Grade-A Office Stock H1 CY2022 Supply, net absorption and vacancy trend analysis Micro-Market(1): South-West Others Supply Net Absorption Vacancy 21.5% (1) 2.5 2.3 16.0% South-West 13.6% 14.0% 26.6% 2.0 11.0% 12.0% 1.6 Stock 8.6% 10.0% 1.3 1.5 58.5 msf 7.1% 8.0% 0.9 4.6% 0.8 1.0 6.0% 0.6 0.6
Slide 34: Sustainable Growth
Sustainable Growth mindspacereit.com 34
Slide 35: Key Achievements and Awards
Key Achievements and Awards Received Platinum LEED Awarded British Safety Council's O&M certification prestigious 9 ‘Sword of Honour’ across 6 Buildings across 7 parks & LEED Gold O&M across 5 Buildings in Q1 FY23 Commercial Project of the year - By Realty Conclave Gera Commerzone Kharadi >22 msf Aw
Slide 36: ESG Framework: Our Approach towards Building a Sustainable Ecosystem
ESG Framework: Our Approach towards Building a Sustainable Ecosystem Our Purpose Building a sustainable ecosystem Strategic Pillars and Key Focus Areas Resource Conservation and Employee and Community Responsible Business Conduct Efficiency Relations • Human Capital • Human Rights & Ethical • Carbon
Slide 37: Published First ESG Report
Published First ESG Report Published - First ESG Report (GRI based and Externally Assured) “The Report reflects our commitment to drive a responsible business with the highest standards of governance and transparency.” “We are committed to utilize 100% electricity from renewable sources, for all are
Slide 38: Shaping the Future Minds of our Nation
Shaping the Future Minds of our Nation Community School at Gambhiraopet, in partnership with the State government • Mindspace Business Parks REIT has contributed to the development of a new School in Gambhiraopet, a quaint village in Sircilla district of Telangana • Designed to accommodate 400 child
Slide 39: 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 Six Member Board / Independent Chairman • Two-Third independent directors on the Board Board • Comprises experts from tax, reg
Slide 40: Annexure
Annexure mindspacereit.com 40
Slide 41: 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 LLP SPV: K Raheja IT SPV: Avacado SPV: Mindspace SPV: KRC SPV: Horizonview SPV: Intime SPV: Su
Slide 42: Portfolio Summary
Portfolio Summary 24.4 msf of Completed area with Committed Occupancy of 85.6% & WALE of 6.8 years Total Committed WALE on In-place Leasable Completed UC/Future Occupancy Asset Occupancy area Rent Area Area (msf) Area (msf) (%) (%) (years) (INR psf) (msf) Mindspace Airoli East 6.8 4.7 2.1 86.3% 88.3
Slide 43: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q2-Q4 FY23 FY24 FY25 Area % of Gross Rent at % of Gross Rent at Area % of Gross Rent at Asset Area Expiring Expiring Contracted Expiry Contracted Expiry Expiring Contracted Expiry (msf) (msf) Rentals (INR psf) Rentals (INR psf) (msf) Rentals (INR psf) Mindspace Airoli
Slide 44: Balance Sheet as on 30 Jun 22
Balance Sheet as on 30 Jun 22 Balance Sheet (INR Mn) 31-Mar-22 30-Jun-22 Notes Sources of Funds 1) Debt is prior to minority interest Total Equity 164,712 163,085 adjustment Sub-Total 164,712 163,085 2) Other Liabilities primarily include Trade Liabilities Payables, Capital Creditors, Retention Mone
Slide 45: Debt Maturity Schedule as on 30 Jun 22
Debt Maturity Schedule as on 30 Jun 22 Principal Repayment Interest Wt. Avg. Description Fixed/ Total Undrawn Principal Rate Maturity Q2-Q4 FY28 & (INR Mn) Floating Facility Facility O/S FY24 FY25 FY26 FY27 Total (p.a.p.m.) (Years) FY23 Beyond At REIT Level NCD (Tranche 1) Fixed 2,000 - 2,000 6.4% 1
Slide 46: De-risked Portfolio with ~92.2% Completed Assets
De-risked Portfolio with ~92.2% Completed Assets Project wise Market Value breakup (1) Market value (INR million) Market value (%) Asset Completed Asset Under-construction/ Total Gross Under-construction/ Completed % of Total Value Value Future Development Asset Value Future development Mindspace Ai
Slide 47: 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 Perspective Current Hyderabad | 1.8 msf 3 currently Commerzone Madhapur identified assets Status: • 1.8 msf pre-leased (1) • Tenant has started fit-out work in the premises • OC received 8.
Slide 48: 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 Atul Tiwari atul.tiwari@citi.com Credit Suisse Lokesh Garg lokesh
Slide 49: 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 50: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 50
Mindspace Business Parks REIT — Q1 FY23 Earnings Presentation on 6ix