Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q4 FY21 Earnings Presentation
62 slides from Mindspace Business Parks Reit's earnings presentation, May 14, 2021
Slide 1: Q4 & FY21 Results Presentation
Q4 & FY21 Results Presentation mindspacereit.com 1 14th May 21
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 12 Projects Update 20 Data Center: Mumbai Region 27 Covid-19 Preparedness 30 Value Creation via ESG 33 Financial Update 38 Price Performance & Unitholding 43 Market Overview 46 Annexures 52 Note: 1. The consolidated financial results include financ
Slide 4: Key Updates
Key Updates mindspacereit.com 4
Slide 5: Mindspace REIT – Year at a Glance (FY21)
Mindspace REIT – Year at a Glance (FY21) 1 Operating Highlights 3 Other Highlights 3.5 msf 2.2 msf 1.3 msf IPO Gross Leasing(1) Re-leased(2) New area Leased Successful Listing – First Real Estate entity Subscribed 13x times to join the initiative 19.1 % INR 69 psf 8.0 % Average rent for Re-leasing S
Slide 6: Key Updates for Q4 FY21
Key Updates for Q4 FY21 Operational • Gross Leasing of 1.5 msf including leasing of 0.63 msf to Princeton Digital as data center • Committed Occupancy of 84.2%(1) • Same Store Committed Occupancy of 86.8% • Re-leasing spread of 16.1%(2) on 0.8 msf Re-leased during the quarter • Achieved an average r
Slide 7: Leasing Overview – Q4 FY21
Leasing Overview – Q4 FY21 1.54 msf leases signed across 14 tenants including 0.63 msf let to data center tenant 1.54 msf INR 73 psf/month 16.1% Q4 FY21 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread Q4 FY21 – Gross Leasing Area Re-leased / extended (1) 0.76 msf Assets Type Ten
Slide 8: Leasing Overview – FY21
Leasing Overview – FY21 3.54 msf leases signed across 44 tenants 3.54 msf INR 69 psf/month 19.1% FY21 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) FY21 - Split Basis Type of Tenants Leased to existing Area Re-leased / extended (2) 2.14 msf tenants 53.5% Gross New area leas
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Performance driven by revenue management and cost efficiencies Revenue from NOI Operations (1) Key Points (INR Mn) (INR Mn) FY21 16,293 13,741 NOI growth for FY21 over FY20: 12.1% Q4 FY21 4,265 3,579 NOI for FY21 driven by top-line expansion and cost optim
Slide 10: Mindspace REIT Declares Distribution for Q4 FY21
Mindspace REIT Declares Distribution for Q4 FY21 Q4 Distribution of INR 2,852 Mn, INR 4.81 per unit resulting in Distribution Yield(1) of 7.0% Key Dates Distribution Yield (1) 7.0% Period Jan 21 to Mar 21 Distribution Amount INR 2,852 Mn Outstanding Units 593,018,182 Declaration Date 14 May 21 Distr
Slide 11: De-risked Portfolio with 92.3% Completed Assets (by Value)
De-risked Portfolio with 92.3% Completed Assets (by Value) Statement of Net Assets at Fair Value (INR Mn) Movement of NAV (INR p.u.) Sr. No. Particulars 31 Mar 21 A Fair Value of Real Estate Assets (1) 246,167 10.3 (3.5) B Other Assets at Book Value 7,445 C Other Liabilities at Book Value 48,906 345
Slide 12: Portfolio Overview
Portfolio Overview mindspacereit.com 12
Slide 13: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 30.2 msf INR 55.9 psf Total Leasable Area(1) In-place Rent 86.8% 84.2% Same Store Committed Committed Occupancy Occupancy Pune (16.6%) Mumbai Region (42.3%) 13.8% 6.0 years Hyderabad (38.5%) Mark to Market Pot
Slide 14: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 10.6 msf Mumbai Region | 6.8 msf Completed Area: 10.0 msf; Committed Occupancy: 88.0% Completed Area: 4.7 msf; Committed Occupancy: 91.2% 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 | 0.8 msf (1) Mumbai Region | 0.7 msf Completed Area: 0.8 msf; Leased: 67 ksf Completed Area: 0.7 msf; Committed Occupancy: 94.0% The Square, BKC Mindspace Pocharam The Square, Nagar Road Mumbai Region | 0.1 ms
Slide 16: Marquee Tenant Base
Marquee Tenant Base Leading MNCs and Fortune 500 companies across sectors Technology Financial Services Diversified Technology Financial Services Diversified Accenture Wipro Barclays BNY Mellon Amazon Qualcomm Syntel IBM Verizon UBS Fiserv Allstate Citius UGH Model N Here Solutions Bank of America S
Slide 17: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 40.3% of Gross Contracted Rentals Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (40.3%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals Professional # of
Slide 18: Lease Expiry Profile
Lease Expiry Profile Active discussions on with existing and new tenants for renewal / Re-leasing Tenant uncertainty over future lease commitments Track record of achieving Re-leasing spread likely to persist for few quarters across parks Area Expiry – YoY Area Re-leased (since Apr 17) msf msf 51.1
Slide 19: Ability to Attract New Tenants along with Existing Tenant Retention
Ability to Attract New Tenants along with Existing Tenant Retention 11.1 msf leased since Apr 17, including 5.2 msf at 24.5% Re-leasing spread New Area leased Existing Area Re-leased / Vacant Area leasing % split by area (1) % split by area (1) New Tenants Existing 19.0% Tenants 5.9 msf 35.3% 5.2 ms
Slide 20: Projects Updates
Projects Updates mindspacereit.com 20
Slide 21: Development Progress
Development Progress Hyderabad Mumbai Region Pune Mindspace Madhapur (B22) Mindspace Airoli, West (B9) Commerzone Kharadi (B5) ▪ Leasable area: 0.1 msf ▪ Leasable area: 1.0 msf ▪ Leasable area: 0.7 msf ▪ Status: OC received(1) ▪ Status: Façade WIP ▪ Status: 5th Floor slab WIP ▪ Balance cost: INR 123
Slide 22: Commerzone Kharadi, Pune – Select Images
Commerzone Kharadi, Pune – Select Images Integrated “Business Ecosystem” with various on-site facilities and amenities Panoramic view of the park Spacious lobby with Amphitheather Attractive Aesthetics Biophilic Landscape mindspacereit.com 22
Slide 23: Mindspace Airoli East, Mumbai Region - Upgrade (1/2)
Mindspace Airoli East, Mumbai Region - Upgrade (1/2) Utilising Covid-19 downtime efficiently to create a “WOW” factor Outside Seating Refurbished Hardscape & Landscape Attractive Aesthetics Recreational Spaces mindspacereit.com 23
Slide 24: Mindspace Airoli East, Mumbai Region - Upgrade (2/2)
Mindspace Airoli East, Mumbai Region - Upgrade (2/2) Before Current Old Pedestrian Walkway Pedestrian Walkway Old Entrance Gate Main Entrance Gate WIP mindspacereit.com 24
Slide 25: Mindspace Madhapur, Hyderabad – Upgrade (1/2)
Mindspace Madhapur, Hyderabad – Upgrade (1/2) Before Current Old Gate Main Entrace Gate Old Building Façade Upgrade mindspacereit.com 25
Slide 26: Mindspace Madhapur, Hyderabad – Upgrade (2/2)
Mindspace Madhapur, Hyderabad – Upgrade (2/2) Current Status Final Intent Elevated boardwalks for ease of movement Perspective Well spread F&B spaces across the Park Perspective mindspacereit.com 26
Slide 27: Data Center Mumbai Region
Data Center Mumbai Region mindspacereit.com 27
Slide 28: Data Center Industry Overview
Data Center Industry Overview India: Well Poised to be the Next Data Centre Hub India’s data center capacity to grow at 2x CAGR of global capacity (1) Key Drivers(1) • Internet penetration and data Total Area (msf) Power Capacity (MW) traffic 465 • Cloud adoption 2.5 370 • Big data analytics & IoT •
Slide 29: Let 0.63 msf to Princeton Digital Group, a Leading Data Centre Operator
Let 0.63 msf to Princeton Digital Group, a leading Data Centre Operator Tenure: 40 (20+10+10) years; Lock-in: 15 years 1 Terms of Erstwhile MoU 2 Revised Terms as per Final Agreement • Option with Gigaplex to sell 16.4 acres to • Option for c.5.7 acres to continue KRCPL (1) • Remaining land to be re
Slide 30: COVID 19 Preparedness
COVID 19 Preparedness mindspacereit.com 30
Slide 31: Stringent COVID-19 Safety Protocols at our Parks
Stringent COVID-19 Safety Protocols at our Parks Strong commitment to provide a safe working environment for our tenants Help Desk Vehicle Disinfectant Frequent Sanitization Paramedic Center Thermal Screening Scanning with IR Thermometers Auto-Sanitizers Ambulance Service • UV tower for more Enhance
Slide 32: Tenant Voice for Services Offered at Our Parks
Tenant Voice for Services Offered at Our Parks Mindspace Madhapur “During this journey we would like to thank you for being with us for all the necessary support extended till date and hoping the same on coming days for ensuring safety for all of us, it took time for all of us to understand or take
Slide 33: ESG via Value Creation
ESG via Value Creation mindspacereit.com 33
Slide 34: Key Achievements and Awards
Key Achievements and Awards Awarded 36(1) Five Star rating across 4 parks Green Buildings Sword of Honour for 2 parks COVID 19 Assurance Statement for 6 parks >18.2 msf Commercial Project of the Total “Green year - By Realty Conclave Building” Gera Commerzone Kharadi Footprint Environment friendly p
Slide 35: Our Commitment to Build an ESG Centric Ecosystem
Our Commitment to Build an ESG Centric Ecosystem Renewable Energy Waste Organic through Management Farming Solar PV Panels Green Preserving Sustainable Sewage Nature Development Treatment Electrical Tenant Robust charging Engagement Corporate stations Governance Integration of sustainability into th
Slide 36: Ongoing Social Initiatives
Ongoing Social Initiatives Durgam Cheruvu Lake Makeover, Hyderabad • Continued partnership with TSIIC and GHMC (1) for Durgam Cheruvu Lake makeover • Undertook extensive cleaning of the stubborn water hyacinth transforming it into a healthy lake • Laid walking and jogging tracks, curating an open gy
Slide 37: Changing Lives via Supporting the Cause of Education
Changing Lives via Supporting the Cause of Education Room to Read “At Room to Read, we feel honoured to partner with Mindspace to bring quality educational opportunities to children in the underserved communities in India. We thank you for your continued commitment towards our mission of aiding in c
Slide 38: Financial Updates
Financial Updates mindspacereit.com 38
Slide 39: 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) NOI (INR Mn) % of NOI Assets Q3 FY21 Q4 FY21 FY21 Q3 FY21 Q4 FY21 FY21 Q4 FY21 Mindspace Airoli (E) 908 895 3,578 697 707 2,823 19.8% Mindspace Airoli (W) 506 529 2,040 423 407 1,623 11.4% Mindspace Ma
Slide 40: Stable NOI Growth
Stable NOI Growth NOI growth driven primarily by rent from new area NOI bridge for FY21 INR MM 12.1% Increase 899 238 243 104 13,741 12,257 10,000 FY20 Contractuals Rent from Mark-to- Rent from Rent from FY21 & Others (1) Market Opportunity Vacant Area (2) New Area (3) % growth 7.0% 16.4% 16.0% 60.6
Slide 41: Q4 FY21: NDCF Build-up
Q4 FY21: NDCF Build-up Particulars (INR Mn) Q4 FY21 H2 FY21 Revenue from Operations (1) 4,341 8,504 Property Taxes & Insurance (163) (297) Other Direct Operating Expenses (1) (598) (1,049) Net Operating Income (NOI) 3,579 7,157 Property Management Fees (109) (214) Net Other Expenses (163) (284) EBIT
Slide 42: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth Strategy to embed a blend of short term and long-term debt with a mix of instruments 14.0% INR 6.4 Bn CRISIL : CCR AAA/Stable(1) INR 34 Bn Net Debt to Undrawn Committed ICRA : ICRA AAA (Stable)(1) Market Value(2) Net Debt Facilities Compos
Slide 43: Price Performance & Unitholding
Price Performance & Unitholding mindspacereit.com 43
Slide 44: Stable Price Performance
Stable Price Performance Included in “MSCI India Domestic Small Cap Index“ and various other MSCI and FTSE indices (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 160 (Nifty Realty: +53.9%) 140 120 (Nifty: +24.7%) 100 (Mindspace REIT: +7.3%) 80 07-Aug-
Slide 45: Unitholding Summary
Unitholding Summary Unit-holder Pattern as on 31 Mar 21 Unitholding Summary Unitholding Summary Alternative (593 Mn units) Non Investment Mutual (Market Cap : INR 175 Bn) (1) Institutions Funds Funds 10.7% 1.3% 0.1% Sponsors & Blackstone Bodies Public (Others) Sponsor Group Group(1) Corporates (Incl
Slide 46: Market Updates
Market Updates mindspacereit.com 46
Slide 47: Resilient Technology Sector Expected to Drive the Long-term Office Demand
Resilient Technology Sector Expected to Drive the Long-term Office Demand Stem Workforce Global Capability Centres Global Capability Centres Cost advantage 2.6 Mn 1,400 45% 81% India GCCs as a % of Global Lower cost structure than US STEM Graduates annually (1) # GCCs in India GCCs Tier-II cities Te
Slide 48: Mumbai Region Key Updates
Mumbai Region Grade-A Office Stock Mar 21 Key Updates Worli-Lower Thane Parel ▪ Leasing to gain momentum in second half of 2021driven by 10.1% 10.5% BFSI, engineering and manufacturing amongst others Others ▪ Currently vacancy in Thane Belapur road is high primarily due 17.6% to new supply and subdu
Slide 49: Hyderabad Key Updates
Hyderabad Grade-A Office Stock Mar 21 Supply, net absorption and vacancy trend analysis (1) Micro-Markets : Madhapur 8.0 7.4 7.5 12.0% Madhapur Others 66.9% 7.0 2.3% 9.8% 10.0% 4.7% 6.0 4.5 8.0% Stock 3.6 5.0 3.8 4.0 Peripheral 3.7 6.6% 69.7 msf 4.0 6.0% East 3.0% 3.0 3.5% 1.9 4.0% 1.8 2.0 2.6% 0.6
Slide 50: Pune Key Updates
Pune Grade-A Office Stock Mar 21 Supply, net absorption and vacancy trend analysis Others Micro-Market: SBD East 11.3% 3.0 7.0% 2.6 PBD West 2.5 5.9% 2.4 2.1 5.1% 6.0% 22.7% 2.0 5.0% 2.0 1.5 4.3% Stock 1.5 3.5% 4.0% 1.2 1.5 55.8 msf 1.1 3.0% 2.3% (1) 1.0 SBD East 2.0% SBD West 10.7% 55.3% 0.5 0.3 1.
Slide 51: Chennai Key Updates
Chennai Grade-A Office Stock Mar 21 Supply, net absorption and vacancy trend analysis Others Micro-Market: South-West 19.9% 1.8 11.0% 12.0% 1.6 (1) 1.6 South-West 10.0%10.0% 24.1% 1.4 1.2 7.1% 4.6% 8.0% Stock 0.6 0.9 1.0 0.8 6.0% 53.8 msf 0.8 0.6 0.4 2.1% 4.0% 0.4 0.4 Peripheral 0.4 0.1 0.1 2.0% Sou
Slide 52: Annexure
Annexure mindspacereit.com 52
Slide 53: Mindspace REIT Structure
Mindspace REIT Structure 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: Sundew SPV: Gigaplex Park (Hyderabad) Properties & Tradi
Slide 54: Portfolio Summary
Portfolio Summary 23.9 msf of Completed area with Committed Occupancy of 84.2% & WALE of 6.0 years Total Leasable Completed UC/Future Committed In-place Occupancy WALE Asset Area Area Area Occupancy Rent (%) (years) (msf) (msf) (msf) (%) (INR psf) Mindspace Airoli East 6.8 4.7 2.1 91.2% 91.2% 4.5 51
Slide 55: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile FY22 FY23 FY24 Asset Area % of Gross Rent at Area % of Gross Rent at Area % of Gross Rent at Expiring Contracte Expiry Expiring Contracte Expiry Expiring Contracte Expiry (msf) d Rentals (INR psf) (msf) d Rentals (INR psf) (msf) d Rentals (INR psf) Mindspace Airoli Ea
Slide 56: Balance Sheet as on 31 Mar 21
Balance Sheet as on 31 Mar 21 Balance Sheet (INR Mn) 31 Dec 20 31 Mar 21 Notes Sources of Funds 1) SPV financials are consolidated starting 01 Total Equity(1) 1,73,930 172,134 Aug 20. Acquisition of the shares of Asset SPVs by Mindspace REIT has been Sub-Total 1,73,930 172,134 accounted as acquisiti
Slide 57: Debt Maturity Schedule as on 31 Mar 21
Debt Maturity Schedule as on 31 Mar 21 Principal Repayment Interest Wgt. Undraw Description Fixed/Fre Total Principal Rate Avg. FY27 & n (INR Mn) e Float Facility O/S (p.a.p.m. Maturity FY22 FY23 FY24 FY25 FY26 Beyon Total Facility ) (Years) d At REIT Level MLD (Tranche 1) Fixed 5,000 - 5,000 6.60%
Slide 58: Summary of Valuation as on 31 Mar 21
Summary of Valuation as on 31 Mar 21 Project wise Market Value breakup(1) Market Value (INR Mn) Market Value (%) Asset UC/Future UC/Future Completed Total Completed Total Dev. Dev. Mindspace Airoli East 40,849 1,850 42,699 16.6% 0.8% 17.3% Mindspace Airoli West 28,720 7,754 36,474 11.7% 3.1% 14.8% M
Slide 59: 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 Hyderabad | 1.8 msf 3 currently Commerzone Madhapur identified assets Status: • 13th floor completed • Expected completion: Phase 1 – Q2 FY22 Phase 2 – Q4 FY22 Perspective Current 8.6 msf C
Slide 60: Research Houses Covering Mindspace REIT
11 Research Houses Covering Mindspace REIT Research House Analyst Email Id Ambit Capital Karan Khanna karan.khanna@ambit.co Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Atul Tiwari atul.tiwari@citi.com Credit Suisse Lokesh Garg lokesh.garg@credit-suisse.com ICICI Securities Adhidev
Slide 61: 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 62: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 62
Mindspace Business Parks REIT — Q4 FY21 Earnings Presentation on 6ix