Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q2 FY2023 Earnings Presentation
42 slides from Brookfield India Real Estate Trust's earnings presentation, Nov 7, 2022
Slide 1: Q2 FY2023 Investor Update
Brookfield India Real Estate Trust Q 2 F Y 2 0 2 3 – I N V E S T O R U P D AT E NOVEMBER 7, 2022 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: India's first and only 100% institutionally managed REIT
Brookfield India Real Estate Trust India’s first and only 100% institutionally managed REIT, owning 18.7 MSF of class A office properties Delhi NCR (11.4 MSF) 18.7 MSF 14.3 MSF Gurugram 3.9 0.1 TOTAL AREA OPERATING AREA Noida 5.7 1.6 Total 9.6 1.7 89% Rs 64 PSF 67% EFFECTIVE ECONOMIC IN-PLACE RENT O
Slide 4: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities 28% 25% Largest Office SEZ in CBD Gurugram Largest Office SEZ in Noida CANDOR TECHSPACE, SECTOR 21, GURUGRAM (G2) CANDOR TECHSPACE, SECTOR 135, NOIDA (N2) 4.0 MSF | 29 ACRES 4.5 MSF | 30 ACRES 17% 16% 14% Mumbai’s only Private SEZ located in Powai Largest Of
Slide 5: H1 FY2023 – Half Year Scorecard
H1 FY2023 – Half Year Scorecard We have executed on our stated strategy and have a robust outlook on our business Metric Performance 1 Stable Distribution Rs 10.20 DPU 2 Strong Returns 21% Total Return(1) Further 12% headroom to NAV 3 Leasing Success 0.6 MSF + 0.1 MSF of Expansion Options 0.4 MSF of
Slide 6: Leader in Asia for Sustainable Office Development
Leader in Asia for Sustainable Office Development Outperformed GRESB global averages across all criteria, scoring 100% in Social and Governance categories(1), reinforcing our ESG credentials 90% 96% Standing Investments Score Development Score(2) 𝟓𝟑ൗ Environment 𝟒𝟗ൗ Environment 𝟔𝟐 Global…
Slide 7: Consistent Leasing Recovery
Consistent Leasing Recovery “Return to office” programs continue to drive renewals and expansion demand H1 FY2023 LEASING & RENEWALS Mindtree Rs 80 PSF AVERAGE RENT ON NEW LEASING(1)(2) 17% GE Oil & Gas 39% 11.0 Yrs. AVERAGE TERM ON NEW LEASING(1) Accenture 617,000 SF BT E-Serv Bluechip 1.0 MSF Hosp
Slide 8: Significant Organic Growth Potential
Significant Organic Growth Potential We achieved a 9% growth in the NOI run rate from Q4 FY2022 and have an embedded growth headroom of 18% NOI GROWTH POTENTIAL (MILLIONS) +18% Rs 993 Rs 207 Rs 11,350 +9% Rs 375 Rs 810 Rs 9,652 Rs 123 Rs 8,842 Q4 FY2022 Growth vs Q4 Current NOI H1 FY2023 MTM on Vaca
Slide 9: Attractive Inorganic Growth Prospects
Attractive Inorganic Growth Prospects Acquisition pipeline of 6.4 MSF of operating class-A properties, which will further increase scale and operating income One of the largest high quality office campuses in Gurugram Prime office portfolio in a 250-acre integrated township (near Kensington) CANDOR
Slide 10: Strong Capital Structure
Strong Capital Structure Backed by high quality assets and robust cash flows, our long-duration borrowings maintain a AAA credit rating, attract competitive costs and carry a low refinancing risk 7.45% AAA Stable 31% Rs 2.1B AVERAGE INTEREST RATE(1) CREDIT RATING (CRISIL) NET DEBT TO UNDRAWN COMMITT
Slide 11: Q2 FY2023 | Business Highlights
Q2 FY2023 | Business Highlights We witnessed continued leasing demand with 306,000 SF of gross leasing this quarter • Achieved 127,000 SF of new leasing and 179,000 SF of renewals during 306,000 SF 89% the quarter, and signed expansion options of 16,000 SF in N1 Leasing Gross Effective Economic Leas
Slide 12: Q2 FY2023 | Financial Highlights
Q2 FY2023 | Financial Highlights 48% increase in operating income versus Q2 FY2022, led by the N2 acquisition Growth vs Q2 FY2023 Q2 FY2022 Operating Lease • Rs 496 million (31.7%) YoY increase o Rs 469 million (30.1%) increase due to addition of N2 to Rentals (OLR) Rs 2,056 32% the REIT and Rs 26 m
Slide 13: Q2 FY2023 | Distributions
Q2 FY2023 | Distributions Our distributions are in line with our guidance at Rs 5.10 per unit, of which 52% is non- taxable(1) DISTRIBUTION PER UNIT COMPONENTS Rs 1,709 million DISTRIBUTION (Q2 FY2023) Rs 0.02 , 0% Rs 2.57 , 50% Rs 5.10 DISTRIBUTION PER UNIT (DPU) NOV 16, 2022 RECORD DATE Rs 2.42 ,
Slide 14: Business & Financial Updates
Business & Financial Updates CANDOR TECHSPACE N1, NOIDA
Slide 15: Significantly Complete and Stable Portfolio
Significantly Complete and Stable Portfolio 94% of gross asset value is in operating properties, with an Effective Economic Occupancy of 89% and a long-dated WALE of 6.9 years Area (in MSF) Leased Area Metrics In-place Asset Dev. Area # Office Committed / WALE Asset Operating Total Rent Value(2) Pot
Slide 16: 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 Tenant # Parks Area Mar 15(1) since Others, 10% Technology, 49% Accent
Slide 17: “Business-critical” Campuses
“Business-critical” Campuses Our tenants perform specialised and high value-add services from our office parks Technology Consulting BFSI Indian IT behemoth (Kensington) Fortune 500 consulting company (G2) Fortune 500 British bank (N1) One of the largest offshore delivery centers Largest delivery ce
Slide 18: New Leasing and Renewals
New Leasing and Renewals Achieved gross leasing of 306,000 SF during the quarter while progressing on a 2.0 MSF leasing pipeline SELECT NEW LEASES / RENEWALS(1) Tenant / Industry Assets Area (SF) Industry Innovaccer Healthcare N1 36,000 Mindtree Technology N1 14,000 Rs 61 PSF AVERAGE RENT ON NEW LEA
Slide 19: 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 in the near term KEY HIGHLIGHTS (H1 FY2023) LEASE EXPIRY SCHEDULE Area Expiring (MSF) Achieved/Expected Renewals Cumulative Expiry (% of R
Slide 20: Property Income | Walkdown
Property Income | Walkdown MILLIONS Q2 FY2023 Q2 FY2022 KEY DRIVERS • Rs 496 million (31.7%) YoY increase Income from Operating Lease o Rs 469 million (30.1%) increase due to addition of N2 to Rs 2,056 Rs 1,561 Rentals (OLR) the REIT and Rs 26 million (1.7%) primarily due to recent new leasing • Rs
Slide 21: NDCF | Walkdown
NDCF | Walkdown Millions Q1 FY2023 Q2 FY2023 H1 FY2023 Income from Operating Lease Rentals Rs 2,034 Rs 2,056 Rs 4,091 CAM / Other Revenue 876 980 1,856 Revenue from Operations Rs 2,910 Rs 3,036 Rs 5,946 CAM / Other Direct Expenses (742) (802) (1,545) Income Support 178 179 357 Adjusted NOI Rs 2,346
Slide 22: NDCF | Walkdown
NDCF | Walkdown Millions Q1 FY2023 Q2 FY2023 H1 FY2023 NDCF (SPV Level)(1) Rs 2,161 Rs 1,666 Rs 3,827 Interest on Shareholder Debt 860 825 1,686 Dividends 22 30 52 Repayment of Shareholder Debt 1,196 886 2,082 Investment of Shareholder Debt in N2 (335) - (335) REIT Expenses(2) (24) (25) (49) NDCF (R
Slide 23: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet MILLIONS SEPTEMBER 30, 2022 Liabilities and Equity Total Equity Rs 86,144 Borrowings(1) 53,182 Security Deposits 5,049 Other Liabilities 3,800 Total Rs 148,175 Assets Investment Property Rs 134,708 Investment Pr
Slide 24: Environmental Social Governance Program Updates
Environmental Social Governance Program Updates CANDOR TECHSPACE N2, NOIDA
Slide 25: Our Commitment
Our Commitment Committed to industry-leading sustainable development to deliver long-term value to our business, partners and communities 2023 2030 Net Zero plans Accelerate for all buildings decarbonization across assets 2040 NET ZERO 2020 2025 Establish baselines 50% of portfolio on Across the dec
Slide 26: 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 2040 or sooner GREENHOUSE GAS EMISSIONS (‘000 Mt CO2e)(1) ENERGY CONSUMPTION (MILLION UNITS)(1) Scope 2 Scope 1 17 2 1 1 127 123 99 85 2 76 76 70 62 61
Slide 27: Key ESG Initiatives
Key ESG Initiatives Through continuous improvements, we ensure efficient, resilient, future-fit assets that support the needs of our tenants and communities ECOLOGICAL RESILIENCE 3,000 Forest of Hope - Plantation drives conducted with occupants and employees as part of the culmination of the TREES P
Slide 28: Information Supplement
Information Supplement KENSINGTON, POWAI, MUMBAI
Slide 29: Sponsor Group’s Real Estate Footprint in India
Sponsor Group’s Real Estate Footprint in India Brookfield Group is one of the largest real estate investors in India with a high-quality office portfolio spanning 50 MSF (including Brookfield India REIT) BROOKFIELD INDIA REAL ESTATE – KEY FACTS OTHER INDIA OFFICE PORTFOLIO (OUTSIDE REIT) $8B 50 MSF
Slide 30: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule % of Gross Rentals In-place rent at Expiry (Rs Year / Asset Area Expiring (‘000 SF) (Asset / Portfolio) PSF)(1) H2 FY2023E Kensington 389 28% Rs 106 G2 240 7% 82 N1 38 1% 65 N2 191 7% 54 K1 114 3% 54 Total – REIT 972 10% Rs 84 FY2024E Kensington 707 40% Rs 87 G2 133 4%
Slide 31: Q2 FY2023: Occupancy Bridge
Q2 FY2023: Occupancy Bridge ASSET JUNE 30, 2022 SEPTEMBER 30, 2022 OPERATING LEASED COMMITTED NEW GROSS OPERATING LEASED COMMITTED AREAS IN ‘000 SF RENEWALS AREA AREA OCCUPANCY LEASING EXPIRIES AREA AREA OCCUPANCY Kensington 1,560 1,483 95% - (58) 60 1,563 1,485 95% G2(1) 3,881 3,312 85% 0 (125) 117
Slide 32: H1 FY2023: Occupancy Bridge
H1 FY2023: Occupancy Bridge ASSET MARCH 31, 2022 SEPTEMBER 30, 2022 OPERATING LEASED COMMITTED NEW GROSS OPERATING LEASED COMMITTED AREAS IN ‘000 SF RENEWALS AREA AREA OCCUPANCY LEASING EXPIRIES AREA AREA OCCUPANCY Kensington 1,558 1,409 90% 74 (58) 60 1,563 1,485 95% G2(1) 3,877 3,232 83% 80 (125)
Slide 33: Q2 FY2023: New leasing & Renewals
Q2 FY2023: New leasing & Renewals ASSET NEW LEASING RENEWALS GROSS LEASING AREAS IN ‘000 SF AREA RENT PSF PM(1) AREA RENT PSF PM(1) AREA RENT PSF PM(1) Kensington - - 60 120 60 120 G2 - - 117 90 117 90 N1 104 55 2 - 106 55 N2 23 60 - - 23 60 K1 - - - - - - REIT 127 56 179 100 306 83 33 (1) Rents are
Slide 34: H1 FY2023: New leasing & Renewals
H1 FY2023: New leasing & Renewals ASSET NEW LEASING RENEWALS GROSS LEASING AREAS IN ‘000 SF AREA RENT PSF PM(1) AREA RENT PSF PM(1) AREA RENT PSF PM(1) Kensington 74 120 60 120 135 120 G2 80 80 117 90 197 86 N1 200 56 27 - 227 56 N2 23 60 - - 23 60 K1 - - 36 48 36 48 REIT 378 75 239 91 617 81 34 (1)
Slide 35: Property Income | Consolidation Details (Q2 FY2023)
Property Income | Consolidation Details (Q2 FY2023) INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) Q2 FY2023 Q2 FY2022 Q2 FY2023 Q2 FY2022 Q2 FY2023 % OLR Q2 FY2022 % OLR Kensington Rs 447 Rs 415 Rs 482 Rs 441 Rs 420 94% Rs 379 91% G2 585 605
Slide 36: Property Income | Consolidation Details (H1 FY2023)
Property Income | Consolidation Details (H1 FY2023) INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) H1 FY2023 H1 FY2022 H1 FY2023 H1 FY2022 H1 FY2023 % OLR H1 FY2022 % OLR Kensington Rs 885 Rs 851 Rs 959 Rs 904 Rs 833 94% Rs 781 92% G2 1,161 1
Slide 37: Capital Structure and Liquidity
Capital Structure and Liquidity Simple capital structure, low-cost asset level debt and significant debt headroom will continue to be our strengths HEADROOM IN LTV(2) 49% Rs 51.2B Rs 2.1B NET DEBT(1) UNDRAWN COMMITTED FACILITY 31% 7.45% AAA Stable AVERAGE INTEREST RATE(2) CREDIT RATING (CRISIL) Broo
Slide 38: Ongoing Capex and Upgrades
Ongoing Capex and Upgrades Rs 3 billion 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(1) COMPLETION DATE (MILLIONS) Asset Upgrades/Tenant Impr
Slide 39: Ongoing Capex and Upgrades (Cont’d.)
Ongoing Capex and Upgrades (Cont’d.) Recently completed the upgrade of the lobby at Kensington, with the freshly unveiled double- height entrance lobby enhancing the look and feel of the asset 39
Slide 40: Research Coverage
Research Coverage RESEARCH HOUSE ANALYST EMAIL ID Ambit Karan Khanna Karan.Khanna@ambit.co Axis Capital Samar Sarda Samar.Sarda@axiscap.in BofA Securities Kunal Tayal Kunal.Tayal@bofa.com Citi Atul Tiwari Atul.Tiwari@citi.com HSBC Bank Puneet Gulati PuneetGulati@hsbc.co.in ICICI Securities Adhidev C
Slide 41: Glossary (1/2)
Glossary (1/2) Gross Asset Value / Asset Value The market value as determined by the Valuer as of March 31, 2022 (Occupied Area + Completed Area under Letters of Intent) Committed Occupancy In % Completed Area Represents Committed Occupancy for areas where the occupancy certificate was received on S
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 Includes the NOI for the Initi
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