Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q3 FY2024 Earnings Presentation
52 slides from Mindspace Business Parks Reit's earnings presentation, Jan 29, 2024
Slide 1: Q3 FY24 Results Presentation
Q3 FY24 Results Presentation 29th January 2024 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 23 Price Performance & Unitholding 28 Market Updates 31 Value Creation via ESG 36 Annexures 43 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 (9M FY24)
Mindspace REIT – At a Glance (9M FY24) 1 Operating Performance 1.6 msf 1.3 msf 0.3 msf 12.0 % INR 75 psf/Month New and Vacant Re-leasing Spread Average Rent for Area Gross Leasing Re-leased Area Area Leased on 1.5 msf (1) Leased 2 Financial Performance INR 8,533 Mn INR 14,188 Mn INR 11.5 Bn 7.8 % 21
Slide 6: Q3 FY24 Performance
Q3 FY24 Performance 1 Operating Performance Gross Leasing 0.4 msf In-place rent INR 68 psf month Average Rent achieved on Gross Leasing INR 78 psf month Re-leased 0.4 msf Releasing Spread(1) 17.1% on 0.4 msf Committed Occupancy 86.1 % 2 Financial Performance Weighted INR 4,731 Mn Average 7.8 % p.a.
Slide 7: Leasing Overview – 9M FY24
Leasing Overview – 9M FY24 1.6 msf leases signed across 52 tenants and achieved 12.0%(1) Re-leasing spread on 1.5 msf(1) 1.6 msf (2) INR 75 psf/month 12.0% 9M FY24 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) 9MFY24 - Split Basis Type of Tenants Area Re-leased (2) 1.27 msf
Slide 8: Leasing Overview – Q3 FY24
Leasing Overview – Q3 FY24 0.45 msf leases signed across 12 tenants and achieved 17.1%(1) re-leasing spread on 0.4 msf(1) 0.45 msf INR 78 psf/month 17.1 % Q3 FY24 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q3 FY24 – Gross leasing Area Re-leased (2) 0.41 msf Leased Assets
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Steady y-o-y Revenue and NOI Growth aided by new leasing and escalations Growth Growth (in INR Mn) Q3 FY24 Q2 FY24 Q3 FY23 9M FY24 9M FY23 (y-o-y) (y-o-y) Revenue from 13.5% 17.0% 5,963 5,999 5,440 (9.6% incl. 17,564 15,325 (14.6% incl. Operations (1)(2)(4
Slide 10: Distribution for Q3 FY24
Distribution for Q3 FY24 c. 90% distributions are in the form of tax-exempt dividends Distribution Key Dates Yield DPU 5.9% INR 4.80 p.u. Q3 FY24 (1) Q3 FY24 Period Oct 23 to Dec 23 Distribution Amount INR 2,846 Mn Outstanding Units 593,018,182 Declaration Date 29 Jan 24 Interest ₹0.50 Record Date 0
Slide 11: Portfolio Overview
02 Portfolio Overview mindspacereit.com 11
Slide 12: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 33.1 msf INR 68.0 psf Total Leasable Area In-place Rent 86.5% 86.1% Same Store Committed Committed Occupancy Occupancy on 25.4 msf on 26.2 msf ` 4.0% 6.8 years Mark to Market Potential (1) WALE Mumbai Region H
Slide 13: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 13.1 msf (1) Mumbai Region | 6.4 msf Completed Area: 9.6 msf; Committed Occupancy: 94.8% Completed Area: 4.7 msf; Committed Occupancy: 80.4% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Reg
Slide 14: Five Quality Independent Office Assets
Five Quality Independent Office Assets Commerzone Porur Paradigm, Mindspace Malad Chennai | 1.1 msf Mumbai Region | 0.8 msf Completed Area: 1.1 msf; Committed Occupancy: 80.1% Completed Area: 0.8 msf; Committed Occupancy: 98.0% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8 msf
Slide 15: 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 Smartworks Verizon Cognizant Atos India UBS Fiserv Allstate Hitachi energy Qualcomm Highradius NCR Princet
Slide 16: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 29.7% (Dec 23) vs. 29.7% (Sep 23) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (29.7%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks Accentu
Slide 17: Lease Expiry Profile
Lease Expiry Profile ~1.0 msf coming up for expiry in Q4 FY24 Active discussions on with existing and new tenants Track record of achieving Re-leasing spread for renewal /re-leasing across parks Area Expiry (msf) Area Re-leased (since Apr 20) msf Rent at Expiry Average 22.9% 53.3 62.2 (INR psf) Re-l
Slide 18: Projects Updates
03 Projects Updates mindspacereit.com 18
Slide 19: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Pune Mumbai Region Mumbai Region Commerzone Kharadi Mindspace Airoli East Mindspace Airoli West Building 4 Highstreet Building 8- Data center ▪ Leasable area: ~1.0 msf ▪ Leasable area: ~0.05 msf ▪ Leasable area: ~0.3 msf ▪ Status: 11th Office level RCC Work in ▪ S
Slide 20: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Hyderabad Hyderabad Hyderabad Mindspace Madhapur Mindspace Madhapur Mindspace Madhapur (1A-1B Re-development) (Experience Center) (7/8 Re-development) ▪ Leasable area: 1.3 msf ▪ Leasable area: 0.13 msf ▪ Leasable area: 1.6 msf ▪ Status: Foundation works under ▪ St
Slide 21: Proposed Acquisition: Commerzone Yerwada
Proposed Acquisition: Commerzone Yerwada Strategic Acquisition for Mindspace REIT(1) to consolidate holding at Commerzone Yerwada Property details Building 3 – Commerzone Yerwada c. 42 ksf INR 470 Mn Total Leasable Area of units Fair Value(2) (INR 11,188 psf) proposed to be acquired Of the units to
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 Current Current Hyderabad | 1.8 msf 3 currently Commerzone Raidurg identified assets Status: • Completed • 1.8 msf leased • Rent Commenced for Phase I and II 8.6 msf Perspective Current Che
Slide 23: Financial Updates
03 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) (1,3) 4,818 5,963 120 (2) 120 (2) (87)(2) 5,604 4,545 5,879 4,792 4,731 5,360 186 (2) 4,364 4,974 186 (2) 4,172 4,916 3,997 4,014 4,703 5,254 3,737 4,365 4,419 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23
Slide 25: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 60,084 Mn 21.0 % INR 8,069 Mn 7.8% 3.4 x Net Debt to Undrawn Committed Cost of Debt Net Debt (1) Net Debt to EBITDA(5) Market Value (1) Facilities (p.a.) Diversified debt Book with a mix of debentures Well staggered maturity profile an
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 NOI (INR Mn) % of NOI Assets (INR Mn) (3) Q3 FY24 Q3 FY23 9M FY24 Q3 FY24 Q3 FY23 9M FY24 Q3 FY24 Mindspace Airoli (E) 982 945 2,898 745 717 2,183 16% Mindspace Airoli (W) 869 681 2,577 640 497 1,903 11% Mindsp
Slide 27: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q3 FY24 Revenue from Operations(1) 5,963 Property Taxes & Insurance (207) Other Direct Operating Expenses (1,025) Net Operating Income (NOI) 4,731 Property Management Fees (116) Net Other Expenses (140) EBITDA(1) 4,475 Cash Taxes (Net of Refunds) (663) Working Capi
Slide 28: Price Performance & Unitholding
05 Price Performance & Unitholding mindspacereit.com 28
Slide 29: Price / Volume Performance & Movement
Price / Volume Performance & Movement (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 (NIFTY: +93.8%) (Mindspace REIT: +17.6%) (MSCI US REIT Index: +15.7%) (FTSE All Share REIT Index: -6.9%) Dec-23 Offer Price INR 275 p.u. Price on listing date INR 304
Slide 30: Unitholding Pattern as on 31 December 2023
Unitholding Pattern as on 31 December 2023 Unitholding Summary INR 19,172 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 192 Bn) (1) MF NIIs AIF 0.6% 10.9% 0.5% Insurance 1.5% NPS Sponsors & Sponsor Public 0.2% Group (Others) DIIs 3.3% Total 63.5% 36.5% Unith
Slide 31: Market Updates
06 Market Updates mindspacereit.com 31
Slide 32: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock CY23* Eastern Suburbs Thane 12.1% 7.2% ▪ The leasing activity was dominated by domestic firms Thane-Belapur Road ▪ For the full year, net absorption rose to its highest since 2016, with 15.7% Malad-Goregaon accounting for the highest share with 26%. Mal
Slide 33: Hyderabad Key Updates
Hyderabad Grade-A Office Stock CY23 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Gachibowli 32.7% 10.0 18.0% 8.8 9.0 13.2% 9.0 8.5 16.0% 15.5% Peripheral East 8.0 7.4 2.4% 14.0% 7.0 6.7 Stock 5.9 12.0% Suburbs Others 6.0 9.9% 4.8 2.9% 8.4% 4.9 122.2 msf 1.1% 10.0% 5.0 4.
Slide 34: Pune Key Updates
Pune Grade-A Office Stock CY23 Supply, net absorption and vacancy trend analysis Micro-Market : SBD East (1) Suburbs East, 2.4% CBD, 8.3% 7.0% 4 8.0% 7.1% 3.6 3.6 6.0% SBD West, 4 3.2 6.2% 7.0% 14.6% 3 5.0% 5.7% 5.8% 6.3% 6.0% 2.6 2.2 3 5.0% Stock 2 1.9 2.0 1.8 1.8 4.0% 1.7 78.3 msf 1.6 1.5 1.5 1.6
Slide 35: Chennai Key Updates
Chennai Grade-A Office Stock CY23 Supply, net absorption and vacancy trend analysis Micro-Market : South-West(1) PBD West CBD 5.7% 9.9% Supply Net Absorption Vacancy PBD GST 17.0% 5.5% 3 18.0% 13.3% 2.4 16.0% 3 2.0 14.0% 11.9% PBD OMR 1.8 8.2% 12.0% Stock 2 12.0% 1.6 1.6 23.2% 10.0% 75 msf 2 1.1 1.2
Slide 36: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 36
Slide 37: Key Achievements and Awards
Key Achievements and Awards Mindspace REIT: Real Estate Excellence • 1st in India to score 100/100 as ‘Global Listed Sector Leader’ in Office Development Benchmark • Ranked 1st in Asia in ‘Listed Companies’ category for commercial development • Received 5 star rating for 2nd consecutive year, in GRE
Slide 38: ESG - Key Highlights
ESG - Key Highlights Scope 1+2 emission 19.3% 70,698.27 Renewable energy mix tCO2e for 9MFY24 (13.3% reduction from FY20 baseline) 8,26,895 KL 61.9% of material Water Recycled sourced using sustainable sourcing INR 12 Bn 3 of Cumulative Green Signed Green Leases Financing availed (0.4 msf) 32% 57.1%
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 Visit to Vipla Foundation sponsoring join RE100 initiative meals through the year Durgam Cheruvu Lake Establishing a school with a capacity Great place to work Makeover, Hyderabad of 40
Slide 40: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie NAVRATRI FIESTA ATUL KHATRI LIVE GAURAV KAPOOR LIVE CHRISTMAS CARNIVAL Event attendance – 40,000+ Event attendance - 1,100 Event attendance - 1,700 Event attendance - 20,000+ mindspacereit.com 40
Slide 41: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie NAVRATRI FIESTA NAVRATRI FIESTA ATUL KHATRI LIVE ATUL KHATRI LIVE GAURAV KAPOOR LIVE GAURAV KAPOOR LIVE CHRISTMAS CARNIVAL CHRISTMAS CARNIVAL CHRISTMAS CARNIVAL Over 60,000 employees across 5 of our business parks attended the events minds
Slide 42: 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 Seven Member Board / Independent • 57% independent directors on the Board Chairman • Manager can be removed with 60% approval
Slide 43: Annexure
08 Annexure mindspacereit.com 43
Slide 44: 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 Private Limited(3) SPV: K Raheja IT SPV: Avacado SPV: Mindspace SPV: KRC SPV: Horizonview SPV:
Slide 45: Portfolio Summary
Portfolio Summary 26.2 msf of Completed area with Committed Occupancy of 86.1% & WALE of 6.8 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 6.4 4.7 1.6 79.9% 80.4
Slide 46: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q4 FY24 FY25 Asset % of Gross Rent at % of Gross Rent at Area Expiring Area Expiring Contracted Expiry Contracted Expiry (msf) (msf) Rentals (INR psf) Rentals (INR psf) Mindspace Airoli East 0.6 13.3% 50.1 0.4 10.7% 59.2 Mindspace Airoli West 0.2 5.1% 51.9 0.0 0.1% 12
Slide 47: Balance Sheet as on 31 Dec 23
Balance Sheet as on 31 Dec 23 Balance Sheet (INR Mn)(1) Dec-23 Sep-23 Notes 1. All numbers are prior to minority Sources of Funds adjustment Total Equity 1,51,017 1,52,554 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Sub-Total 1,51,017 1,52,554 Money, Advances
Slide 48: Debt Maturity Schedule as on 31 Dec 23
Debt Maturity Schedule as on 31 Dec 23 Principal Repayment Wt. Interest Description Fixed/ Total Undrawn Principal Avg. Rate FY30 & (INR Mn) Floating Facility Facility O/S Maturity FY24 FY25 FY26 FY27 FY28 FY29 Total (p.a.p.m.) Beyond (Years) At REIT Level MLD Fixed 3,750 - 3,750 6.5% 0.4 - 3,750 -
Slide 49: De-risked Portfolio with ~92.2% Completed Assets
De-risked Portfolio with ~92.2% Completed Assets Project wise Market Value breakup (1) Completed Assets form 92.2% of the Market Value(1) U/C & Total % of Complet Future Asset Value Total ed Dev. (INR Mn) (%) (INR Mn) (INR Mn) Under Mindspace Airoli East 42,968 1,437 44,404 15.5% Construction 4.9% M
Slide 50: 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 Rajiv Berlia rajiv.berlia@citi.com CLSA Kunal Lakhan kunal.lakhan
Slide 51: 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 52: Thank You
Thank You Investor Relations Enquiries: Nitin Garewal (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 52
Mindspace Business Parks REIT — Q3 FY2024 Earnings Presentation on 6ix