Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q1 FY24 Earnings Presentation
54 slides from Mindspace Business Parks Reit's earnings presentation, Jul 25, 2023
Slide 1: Q1 FY24 Results Presentation
Q1 FY24 Results Presentation 25th July 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 09 Projects Update 16 Acquisition Opportunity 20 Financial Update 23 Price Performance & Unitholding 28 Market Updates 31 Value Creation via ESG 36 Annexures 45 Note: 1. For ease and simplicity of representation, certain figures may have been round
Slide 4: Key Updates
01 Key Updates mindspacereit.com 4
Slide 5: Mindspace REIT – At a Glance (Q1 FY24)
Mindspace REIT – At a Glance (Q1 FY24) 1 Operating Highlights 0.4 msf 0.2 msf 10.1 % INR 68 psf/month 88.8% New/Vacant area Re-leasing Spread (1) Average Rent for Area Leased Committed Occupancy Gross Leasing leasing on 0.3 msf 2 Financial Highlights INR 2,846 Mn 6.2 % INR 4,570 Mn INR 5.0 Bn 7.7 %
Slide 6: Leasing Overview – Q1 FY24
Leasing Overview – Q1 FY24 0.4 msf leases signed across 12 tenants and achieved 10.1%(1) re-leasing spread on 0.3 msf(1) 0.38 msf INR 68 psf/month 10.1 % Q1 FY24 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q1 FY24 – Gross leasing Area Re-leased (2) 0.19 msf Leased Assets
Slide 7: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Steady Revenue and NOI Growth aided by rent commencement on leases signed Growth (in INR Mn) Q4 FY23 Q1 FY23 Q1 FY24 (y-o-y) Revenue from Operations (1) 5,360(2) 4,910 5,604(2) 14.1% NOI(1) 4,364(3) 4,014 4,570(3) 13.8% Q1 FY24 - Revenue growth of 4.6% on
Slide 8: Distribution for Q1 FY24
Distribution for Q1 FY24 c.90% distributions are in the form of tax-exempt dividends Distribution Key Dates Yield DPU 6.2% INR 4.80 p.u. Q1 FY24 (1) Q1 FY24 Period Apr 23 to Jun 23 Distribution Amount INR 2,846 Mn Outstanding Units 593,018,182 Declaration Date 25 Jul 23 Interest ₹0.46 Record Date 31
Slide 9: Portfolio Overview
02 Portfolio Overview mindspacereit.com 9
Slide 10: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 32.1 msf INR 66.2 psf Total Leasable Area (1) In-place Rent 88.8% 88.8% Same Store Committed Committed Occupancy Occupancy on 23.9 msf on 25.9 msf ` Mumbai Region Hyderabad 6.6% 6.9 years 11.7 msf (36.4 %) 14.
Slide 11: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 13.1 msf Mumbai Region | 5.6 msf Completed Area: 9.6 msf; Committed Occupancy: 95.8% Completed Area: 4.7 msf; Committed Occupancy: 86.4% 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 | 0.9 msf (1) Mumbai Region | 0.7 msf Completed Area: 0.9 msf; Committed Occupancy: 96.8% Completed Area: 0.7 msf; Committed Occupancy: 97.5% 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 L&T AMD Nvidia B.A. Continuum Axis
Slide 14: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 30.9% (Jun 23) vs. 32.2% (Mar 23) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (30.9%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks Accentu
Slide 15: Lease Expiry Profile
Lease Expiry Profile Only 4 - 7% of the portfolio is coming up for expiry each year over next 2 years Active discussions on with existing and new tenants Track record of achieving Re-leasing spread for Re-leasing / renewal across parks Area Expiry (msf) Area Re-leased (since Apr 20) msf Rent at Expi
Slide 16: Projects Updates
03 Projects Updates mindspacereit.com 16
Slide 17: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Pune Hyderabad Mumbai Region 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: 3rd Office level RCC Work in ▪
Slide 18: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Hyderabad Hyderabad Perspective : Exterior View Mindspace Madhapur Mindspace Madhapur Experience Center (7&8 Redevelopment) ▪ Leasable area: 0.13 msf ▪ Leasable area: 1.6 msf ▪ Status: Excavation completed ▪ Status: Dismantling under progress ▪ Estimated Completio
Slide 19: 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 20: Acquisition Opportunity: Commerzone Porur
03 Acquisition Opportunity : Commerzone Porur mindspacereit.com 20
Slide 21: Proposed Acquisition: Commerzone Porur
Proposed Acquisition: Commerzone Porur (Joint Development Partner Area) Opportunity to gain 100% ownership of Commerzone Porur Project details Transaction Update c. 1.1 msf c. 0.24 msf Ongoing discussions with RPIL(1) (Joint Leasable Area 1 Development partner) to acquire their Total Leasable Area o
Slide 22: Asset and Floor Images
Asset and Floor Images mindspacereit.com 22
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) 5,604 4,570 5,360 4,364 186 (2) 4,172 186 (2) 4,916 4,974 5,254 3,997 4,014 4,365 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
Slide 25: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 52,761 Mn 18.8 % INR 4,562 Mn 7.7 % 3.3 x Net Debt to Undrawn Committed Cost of Debt Net Debt (1) Net Debt to EBITDA(5) Market Value (1) Facilities (p.a.) Well staggered maturity profile with 8.5% maturity by end of FY24 Diversified de
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)(1) Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Q1 FY24 Mindspace Airoli (E)(3) 947 970 708 721 16% Mindspace Airoli (W) (3) 564 842 402 627 14% Mindspace Malad 209 233 185 207 5% The S
Slide 27: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q1 FY24 Revenue from Operations(1) 5,880 Property Taxes & Insurance (192) Other Direct Operating Expenses (1,118) Net Operating Income (NOI) 4,570 Property Management Fees (135) Net Other Expenses (92) EBITDA(1) 4,343 Cash Taxes (Net of Refunds) (326) Working Capit
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: +71.1%) (Mindspace REIT: +12.4%) (MSCI US REIT Index: +9.7%) (FTSE All Share REIT Index: -21.1%) Jun-23 Offer Price INR 275 p.u. Price on listing date INR 304
Slide 30: Unitholding Pattern as on June 2023
Unitholding Pattern as on 30 June 2023 Unitholding Summary INR 18,330 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern MF NIIs (Market Cap : INR 183 Bn) (1) AIF 0.4% 10.5% 0.5% Insurance 1.6% NPS 0.2% DIIs Sponsors & Sponsor Public 3.5% Total Group (Others) Unitholders 63.5% 36.
Slide 31: Market Updates
06 Market Updates mindspacereit.com 31
Slide 32: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock H1 CY23 Eastern ▪ Vacancy levels were down q-o-q driven by reducing vacancies in Thane Suburbs the IT corridors of Malad-Goregaon and Thane-Belapur Road. 7.1% 12.5% Thane- ▪ Thane Belapur market, is among the biggest submarkets by size in Malad- Belapur
Slide 33: Hyderabad Key Updates
Hyderabad Grade-A Office Stock H1 CY2023 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Gachibowli Supply Net Absorption Vacancy 29.2% Peripheral East 10.0 9.0 20.0% 8.8 2.6% 9.0 8.5 13.2% 18.2% 18.0% 8.0 16.0% Suburbs 6.7 Stock 7.0 14.0% Others 5.9 5.3 6.0 12.0% 1.1% 9.9%
Slide 34: Pune Key Updates
Pune Grade-A Office Stock H1 CY23 Supply, net absorption and vacancy trend analysis Micro-Market : SBD East (1) Suburbs East, 2.5% CBD, 8.8% Supply Net Absorption Vacancy SBD West, 4 3.2 7.0% 7.1% 8.0% 14.2% 6.0% 7.4% 6.2% 7.0% 3 5.7% 2.6 5.0% 5.9% 6.0% Stock 3 2.2 5.0% 1.9 2.0 1.9 76.3 msf 1.8 1.8
Slide 35: Chennai Key Updates
Chennai Grade-A Office Stock H1 CY23 Supply, net absorption and vacancy trend analysis Micro-Market : South-West(1) PBD West CBD 6.0% 10.4% Supply Net Absorption Vacancy PBD GST 17.0% 5.8% 3 18.0% 17.0% 13.3% 2.0 16.0% 2 1.8 14.0% 1.6 11.9% 8.2% PBD OMR Stock 12.0% 1.3 23.1% 2 1.1 1.2 10.0% 71.4 msf
Slide 36: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 36
Slide 37: Key Achievements and Awards
Key Achievements and Awards Awarded British Safety Council's 54 Green Buildings prestigious 9 ‘Sword of Honour’ (16 buildings recd. across 7 parks LEED Platinum O&M certification in Q1 FY24) Mindscape Madhapur B-9 Construction Week Awards 1st Indian project to have 2022 been issued carbon Real Estat
Slide 38: Published Annual ESG Report
Published Annual ESG Report Published - Second ESG Report (GRI based and Externally Assured) “At Mindspace, our vision is to be a sustainability leader in the real estate sector through an ESG- focused business strategy designed to create long-term value for stakeholders. ” - Vinod Rohira Chief Exec
Slide 39: ESG - Key Highlights
ESG - Key Highlights Scope 1+2 emission 6.12% 70,698.27 tCO2e Renewable energy mix (13.3% reduction from FY20 baseline) 8,26,895 KL 61.9% of material Water Recycled sourced using sustainable sourcing INR 5,500 Mn 3 Signed Green Leases of Green Bonds Issued (0.4 msf)(1) 32% 66.67% Women in senior Ind
Slide 40: 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 Establishing a school with a capacity Great place to work Makeover, Hyderabad of 400 s
Slide 41: Green Bond Investors Meet
Green Bond Investors Meet Mindspace REIT hosted a session on Green Financing Landscape Over 75 people including fixed-income investors, rating agencies and other stakeholders participated in the event, commemorating the maiden Green Bond Issuance by Mindspace REIT mindspacereit.com 41
Slide 42: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie • IPL Screening - Hosted live cricket • Happy Vibes Fest - Hosted a one-of- • Mindspace Delightful Days - Co- screenings of IPL playoff matches a-kind food festival to celebrate curated a stand-up comedy event different cuisines and culina
Slide 43: Snapshot of Tenant Engagement Events
Snapshot of Tenant Engagement Events IPL Screening Happy Vibes Fest Mindspace Delightful Days Mindspace Airoli East Mindspace Airoli West Mindspace Madhapur Commerzone Kharadi Commerzone Kharadi Mindspace Madhapur Over 45,000 employees across our business parks attended the events mindspacereit.com
Slide 44: 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 45: Annexure
08 Annexure mindspacereit.com 45
Slide 46: 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 47: Portfolio Summary
Portfolio Summary 25.9 msf of Completed area with Committed Occupancy of 88.8% & WALE of 6.9 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 86.4% 86.4
Slide 48: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q2-Q4 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 12.3% 53.3 0.2 5.3% 70.9 Mindspace Airoli West 0.1 1.8% 42.0 0.0 1.0%
Slide 49: Balance Sheet as on 30 Jun 23
Balance Sheet as on 30 Jun 23 Balance Sheet (INR Mn)(1) 31-Mar-23 30-Jun-23 Notes Sources of Funds 1. All numbers are prior to minority Total Equity 1,55,782 1,54,079 adjustment Sub-Total 1,55,782 1,54,079 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Liabilitie
Slide 50: Debt Maturity Schedule as on 30 Jun 23
Debt Maturity Schedule as on 30 Jun 23 Interest Wt. Avg. Principal Repayment Description Fixed/ Total Undrawn Principal Rate Maturity Q2-Q4 FY29 & (INR Mn) Floating Facility Facility O/S FY25 FY26 FY27 FY28 Total (p.a.p.m.) (Years) FY24 Beyond At REIT Level NCD (Tranche 1) Fixed 2,000 - 2,000 6.4% 0
Slide 51: 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 52: Research Houses Covering Mindspace REIT
13 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 53: 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 54: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 54
Mindspace Business Parks REIT — Q1 FY24 Earnings Presentation on 6ix