Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q4 FY23 Earnings Presentation
50 slides from Mindspace Business Parks Reit's earnings presentation, May 4, 2023
Slide 1: Q4 FY23 Results Presentation
Q4 FY23 Results Presentation 4th May 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 11 Projects Update 18 Financial Update 24 Price Performance & Unitholding 29 Market Updates 32 Value Creation via ESG 37 Annexures 41 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 (FY23)
Mindspace REIT – At a Glance (FY23) 1 Operating Highlights 4.1 msf 2.5 msf 1.6 msf 26.3 % INR 66 psf/month 1.9 msf Average Gross Leasing (1) New and Vacant Re-Leased Area (1) Re-leasing Spread (2) New Area Rent achieved Area Leased on 2.5 msf Completed (3) on Gross Leasing 2 Financial Highlights INR
Slide 6: Key Highlights - Q4 FY23
Key Highlights - Q4 FY23 1 Operating Highlights New & Vacant Gross Leasing 0.6 msf (1) Area Leased 0.5 msf Average Rent achieved on Gross Leasing INR 74 psf month Re-leased 0.1 msf (1) Releasing Spread(2) 23.8% on 0.2 msf New Area Completed 0.6 msf (3) 2 Financial Highlights Weighted NOI(3)(4) INR 4
Slide 7: Leasing Overview – FY23
Leasing Overview –FY23 4.1 msf leased across 83 tenants and achieved 26.3%(3) Re-leasing spread on 2.5 msf 4.10 msf (1)(2) INR 66 psf/month 26.3% FY23 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(3) FY23 - Split Basis Type of Tenants Leased to Area Re-leased(2) 1.61 msf exist
Slide 8: Leasing Overview – Q4 FY23
Leasing Overview – Q4 FY23 0.6 msf leases signed across 25 tenants and achieved 23.8%(1) re-leasing spread on 0.2 msf(1) 0.63 msf INR 74 psf/month 23.8 % Q4 FY23 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q4 FY23 – Gross leasing Area Re-leased (2) 0.12 msf Leased Assets
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance NOI Growth aided by Sustained Strong Leasing Growth Growth (in INR Mn) Q4 FY22 Q3 FY23 Q4 FY23 FY22 FY23 (y-o-y)(5) (y-o-y)(5) Revenue from 4,704 5,440(2)(4) 5,360(2) 13.9% 17,577 20,685(2) 16.6% Operations (1) NOI(1) 3,998 4,551(3)(4) 4,364(3) 9.2% 14,940
Slide 10: De-risked Portfolio with 92.7% Completed Assets (by Value)
De-risked Portfolio with 92.7% Completed Assets (by Value) Statement of Net Assets at Fair Value Movement of NAV (INR p.u.) (INR Mn) Sr. No. Particulars 31 Mar 23 12.5 (10.9) A Fair Value of Real Estate Assets (1) 280,265 B Other Assets at Book Value 7,900 C Other Liabilities at Book Value 67,602 37
Slide 11: Distribution for Q4 FY23
Distribution for Q4 FY23 Over 90% distributions are in the form of tax-exempt dividends Key Dates Distribution 6.9% DPU FY23 INR 19.1 p.u. Yield FY23 (1) Period Jan 23 to Mar 23 Distribution Amount INR 2,852 Mn Outstanding Units 593,018,182 Declaration Date 4 May 23 Interest ₹0.43 Record Date 10 May
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 32.0 msf INR 65.2 psf Total Leasable Area (1) In-place Rent 89.1% 89.0% Same Store Committed Committed Occupancy Occupancy on 23.9 msf on 25.8 msf ` Mumbai Region Hyderabad 8.3% 7.0 years 11.7 msf (36.4 %) 14.
Slide 14: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 13.1 msf Mumbai Region | 5.6 msf Completed Area: 9.5 msf; Committed Occupancy: 95.4% Completed Area: 4.7 msf; Committed Occupancy: 88.3% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Region
Slide 15: Five Quality Independent Office Assets
Five Quality Independent Office Assets Commerzone Porur Paradigm, Mindspace Malad Chennai | 0.9 msf (1) Mumbai Region | 0.7 msf Completed Area: 0.9 msf; Committed Occupancy: 93.5% Completed Area: 0.7 msf; Committed Occupancy: 97.9% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8
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 L&T AMD Nvidia B.A. Continuum Axis
Slide 17: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 32.2% (Mar 23) vs. 34.9% (Dec 22) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (32.2%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks Accentu
Slide 18: Lease Expiry Profile
Lease Expiry Profile Only 4 - 7% of the portfolio is coming up for expiry each year over next 2 years Successfully re-leased 78% of FY23 expiries driven Track record of achieving Re-leasing spread by strong tenant retention across parks Area Expiry (msf) Area Re-leased (since Apr 19) msf Rent at Exp
Slide 19: Projects Updates
03 Projects Updates mindspacereit.com 19
Slide 20: Projects placed into service during the year
Projects placed into service during the year 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: Food Court Operations ▪ Status: Snagging Work in P
Slide 21: Gearing for Demand Resurgence
Gearing for Demand Resurgence Pune Hyderabad Mumbai Region Perspective Commerzone Kharadi Mindspace Madhapur Mindspace Airoli East (B4) (1A-1B Redevelopment) (High Street Retail and F&B ) ▪ Leasable area: ~1.0 msf ▪ Leasable area: 1.3 msf ▪ Leasable area: ~0.05 msf ▪ Status: Podium Slab completed, 1
Slide 22: 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 8.6 msf Hyderabad | 1.8 msf Commerzone Raidurg total potential Status: 3.5 msf • Completed • 1.8 msf leased Completion by FY24 • Rent Commenced for Phase I and II 10 Che
Slide 23: Financial Updates
04 Financial Updates mindspacereit.com 23
Slide 24: Key Financial Metrics
Key Financial Metrics Delivered consistent growth on key financial metrics Revenue (INR mn) (1) NOI (INR mn) (1) (2) 186 4,364 (2) 5,360 186 4,172 4,974 3,997 4,014 4,365 4,916 5,254 4,703 3,737 4,419 3,618 3,595 4,218 4,237 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q4 FY23 Q1 FY22 Q2
Slide 25: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 50,175 Mn 17.9 % INR 13,704 Mn 7.6 % 3.2 x Net Debt to Undrawn Committed Cost of Debt Net Debt (1) Market Value (1) Net Debt to EBITDA(4) Facilities (p.a.) Well staggered maturity profile with 10.4% maturity by FY24 Diversified debt Bo
Slide 26: Stable NOI Growth Driven by Effective Cost and Revenue Management
Stable NOI Growth Driven by Effective Cost and Revenue Management Revenue from Operations (INR Mn)(1) NOI (INR Mn) % of NOI Assets Q4 FY22 Q4 FY23 FY23 Q4 FY22 Q4 FY23 FY23 Q4 FY23 Mindspace Airoli (E) 943 974 3,779 758 723 2,841 17% Mindspace Airoli (W) 549 681 2,552 425 472 1,805 11% Mindspace Mal
Slide 27: Stable NOI Growth
Stable NOI Growth NOI growth driven primarily by rent commencement from new area NOI bridge for FY23 INR Mn 13.2% Increase (excl One Time Compensation of 186 Mn in FY23) 18000 1,173 17000 414 16000 271 302 15000 17,101 14000 14,940(4) 13000 12000 FY22 Contractuals Rent from Mark-to- Rent from (2) Re
Slide 28: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q4 FY23 (1) Revenue from Operations 5,639 Property Taxes & Insurance (168) Other Direct Operating Expenses (1,108) Net Operating Income (NOI) 4,364 Property Management Fees (128) Net Other Expenses (143) EBITDA(1) 4,092 Cash Taxes (Net of Refunds) (402) 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: +54.8%) (Mindspace REIT: +18.9%) (MSCI US REIT Index: +8.0%) (FTSE All Share REIT Index: -14.4%) 31-Mar 23 Offer Price INR 275 p.u. Price on listing date INR
Slide 31: Unitholding Pattern as on 31 Mar 2023
Unitholding Pattern as on 31 Mar 2023 Unitholding Summary INR 19,398 Cr 37 % Market Cap (1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 194 Bn) (1) MF NIIs 9.8% NPS Insurance 0.1% 0.2% 1.2% Sponsors & Sponsor Public AIFs Group (Others) 0.7% 63% 37% FIIs Total 21.4% Unitholders 5
Slide 32: Market Updates
06 Market Updates mindspacereit.com 32
Slide 33: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock Q1 CY23 Eastern ▪ In the Thane Belapur market, quality institutional assets have Thane Suburbs enjoyed strong occupancy levels and strata-titled projects are 7.1% 12.5% Thane- major contributors to headline vacancy Malad- Belapur Goregaon ▪ IT/ITeS tena
Slide 34: Hyderabad Key Updates
Hyderabad Grade-A Office Stock Q1 CY23 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Gachibowli Supply Net Absorption Vacancy 30.6% 10.0 16.0% 8.8 9.0 9.0 8.5 13.2% Suburbs 13.6% 14.0% 8.0 Others 6.7 12.0% 9.9% Stock 7.0 3.9% 6.0 8.4% 5.9 10.0% 108.9 msf CBD 5.0 4.5 4.8 8
Slide 35: Pune Key Updates
Pune Grade-A Office Stock Q1 CY23 Supply, net absorption and vacancy trend analysis Micro-Market : SBD East (1) Suburbs East, 2.5% CBD, 9.0% Supply Net Absorption Vacancy SBD West, 4 3.2 9.0% 13.9% 7.0% 7.1% 8.0% 3 6.0% 7.7% 2.6 6.2% 7.0% 5.7% 2.2 5.0% Stock 3 5.9% 6.0% 1.9 2.0 75.9 msf 1.8 1.8 1.8
Slide 36: Chennai Key Updates
Chennai Grade-A Office Stock Q1 CY23 Supply, net absorption and vacancy trend analysis Micro-Market : South-West(1) PBD West CBD 6.1% 10.6% Supply Net Absorption Vacancy PBD GST 5.9% 3 16.0% 18.0% 13.0% 2.0 16.0% 2 14.8% 1.8 14.0% 1.6 11.6% 8.2% PBD OMR Stock 12.0% 2 1.4 23.6% 1.2 10.0% 70.1 msf Sou
Slide 37: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 37
Slide 38: Key Achievements and Awards
Key Achievements and Awards Awarded British Safety Council's 54 Green Buildings prestigious 9 ‘Sword of Honour’ (15 new buildings across 7 parks recd. LEED Platinum/Gold certification in FY23) Mindscape Madhapur B-9 Construction Week Awards 1st Indian project to have 2022 been issued carbon Real Est
Slide 39: 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 Value creation for tenants join RE100 initiative through engagement activities Durgam Cheruvu Lake Added additional floor in Great place to work Makeover, Hyderabad Govt Hospital for CO
Slide 40: 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 • Two-Third independent directors on the Board Chairman • Manager can be removed with 60% appro
Slide 41: Annexure
08 Annexure mindspacereit.com 41
Slide 42: 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 43: Portfolio Summary
Portfolio Summary 25.8 msf of Completed area with Committed Occupancy of 89.0% & WALE of 7.0 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 88.3% 88.3
Slide 44: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile FY24 FY25 % of Gross % of Gross Asset Area Expiring Rent at Expiry Area Expiring Rent at Expiry Contracted Contracted (msf) (INR psf) (msf) (INR psf) Rentals Rentals Mindspace Airoli East 0.5 10.6% 51.8 0.3 7.4% 67.5 Mindspace Airoli West 0.1 1.8% 42.0 0.0 1.0% 66.0 M
Slide 45: Balance Sheet as on 31 Mar 23
Balance Sheet as on 31 Mar 23 Balance Sheet (INR Mn)(1) 31-Dec-22 31-Mar-23 Notes Sources of Funds 1. All numbers are prior to minority adjustment Total Equity 159,218 155,779 2. Other Liabilities primarily include Trade Sub-Total 159,218 155,779 Payables, Capital Creditors, Retention Money, Advance
Slide 46: Debt Maturity Schedule as on 31 Mar 23
Debt Maturity Schedule as on 31 Mar 23 Interest Wt. Avg. Principal Repayment Description Fixed/ Total Undrawn Principal Rate Maturity FY29 & (INR Mn) Floating Facility Facility O/S FY24 FY25 FY26 FY27 FY28 Total (p.a.p.m.) (Years) Beyond At REIT Level NCD (Tranche 1) Fixed 2,000 - 2,000 6.4% 0.7 2,0
Slide 47: De-risked Portfolio with ~93% Completed Assets
De-risked Portfolio with ~93% Completed Assets Project wise Market Value breakup (1) Completed Assets form ~93% of the Market Value (1) U/C & Total % of Complet Future Asset Value Total ed Dev. (INR Mn) (%) Under (INR Mn) (INR Mn) Construction 3.6% Mindspace Airoli East 43,446 1,767 45,213 16.1% Min
Slide 48: Research Houses Covering Mindspace REIT
12 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 — Q4 FY23 Earnings Presentation on 6ix