Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q2 FY22 Earnings Presentation
53 slides from Mindspace Business Parks Reit's earnings presentation, Nov 12, 2021
Slide 1: Q2 FY22 Results Presentation
Q2 FY22 Results Presentation 12 Nov 2021 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 13 Projects Update 21 Financial Update 26 Price Performance & Unitholding 30 Market Updates 33 Value Creation via ESG 38 Annexures 43 Note: 1. All the financial numbers in the presentation have been rounded off unless otherwise stated 2. Mindspace
Slide 4: Key Updates
Key Updates mindspacereit.com 4
Slide 5: Key Highlights - H1 FY22
Key Highlights - H1 FY22 1 Operating Highlights 146 ksf 2.3 msf 2.1 msf 42.1 % Successfully leased >99 % ROFO leasing update: Gross Leasing Re-leasing Spread (1) entire space at Collections of Total Pre-leased at Mindspace on 1.7 msf The Square, BKC Contracted Juinagar & Commerzone to a marquee tena
Slide 6: Key Highlights - Q2 FY22
Key Highlights - Q2 FY22 1 Operating Highlights Gross Leasing 0.9 msf Re-leased Area 0.6 msf Average Rent achieved on Gross Leasing INR 88 psf month New Area Leased 0.3 msf The Square BKC 146 ksf ROFO 0.45 msf Entire space leased to Leasing Pre-leased at a BFSI tenant Mindspace Juinagar 2 Financial
Slide 7: Leasing Overview – Q2 FY22
Leasing Overview – Q2 FY22 0.9 msf leases signed across 11 tenants and achieved 21.6%(1) Re-leasing spread on 0.6 msf(1) 0.9 msf INR 88 psf/month 21.6 % Q2 FY22 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q2 FY22 – Gross leasing Area Re-leased (2) 0.4 msf Leased Assets Lo
Slide 8: Leasing Overview – H1 FY22
Leasing Overview – H1 FY22 (1) 2.1 msf leases signed across 21 tenants and achieved 42.1%(1) Re-leasing spread on 1.7 msf 2.1 msf INR 72 psf/month 42.1% H1 FY22 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) H1 FY22 - Split Basis Type of Tenants Area Re-leased / Leased to ex
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Performance driven by efficient cost management Revenue from NOI Operations Key Points (INR Mn) (INR Mn) H1 FY22 8,431 7,188 NOI Q2 FY22 – Growth of 6.7% y-o-y, flat on sequential basis Q2 FY22 4,234 3,592 NOI H1 FY22 – Growth of 9.2% y-o-y, Q1 FY22 4,197
Slide 10: Mindspace REIT Declares Q2 FY22 Distribution
Mindspace REIT Declares Q2 FY22 Distribution Over 90% distributions are in the form of tax-exempt dividends Key Dates Distribution Payout 6.7% c.100% Yield (1) Ratio(2) Period July 21 to Sep 21 Distribution Amount INR 2,728 Mn Outstanding Units 593,018,182 Declaration Date 12 Nov 21 Interest ₹0.32 7
Slide 11: De-risked Portfolio with 91.0% Completed Assets (by Value)
De-risked Portfolio with 91.0% Completed Assets (by Value) Statement of Net Assets at Fair Value (INR Mn) Movement of NAV (INR p.u.) Sr. No. Particulars 30 Sep 21 (5.6) A Fair Value of Real Estate Assets (1) 256,952 18.2 B Other Assets at Book Value 9,255 C Other Liabilities at Book Value 54,050 357
Slide 12: ‘Back to Office’ Gaining Momentum Globally
‘Back to Office’ Gaining Momentum Globally As cases drop and vaccinations rise, organizations are starting to call employees back to office 1 % of Employees in Office as of Sep 2021 - Global 3 Factors driving return to office Increased pace of Vaccination and falling COVID count 96% 40% 34% 32% 27%
Slide 13: Portfolio Overview
Portfolio Overview mindspacereit.com 13
Slide 14: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 31.3 msf INR 58.0 psf Total Leasable Area (1) In-place Rent 85.0% 84.9% Same Store Committed Committed Occupancy Occupancy on 23.6 msf(2) on 23.9 msf (2) ` Mumbai Region Hyderabad 9.5% 6.7 years 12.8 msf (41.0
Slide 15: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 11.6 msf(1) Mumbai Region | 6.8 msf Completed Area: 9.8 msf; Committed Occupancy: 91.2% Completed Area: 4.7 msf; Committed Occupancy: 88.1% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Regi
Slide 16: 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, Committed Occupancy: 16.8% Completed Area: 0.7 msf; Committed Occupancy: 93.6% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8
Slide 17: 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 Cognizant CSC UBS Fiserv Allstate Worley Parsons UHG L&T AMD Nvidia B.A. Continuum Axis Sc
Slide 18: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Reduced concentration risk with top 10 tenants contributing 37.2% (Sep 21) vs. 38.6% (Jun 21) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (37.2%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contr
Slide 19: Lease Expiry Profile
Lease Expiry Profile Active discussions on with existing and new tenants for renewal / Re-leasing Strong re-leasing achieved as macro environment Track record of achieving Re-leasing spread continues to improve across parks Area Expiry (msf) Area Re-leased (since Apr 18) msf Rent at Expiry (INR psf)
Slide 20: Ability to Attract New Tenants along with Existing Tenant Retention
Ability to Attract New Tenants along with Existing Tenant Retention 10.9 msf leased since Apr 18, including 6.2 msf at 27.2% Re-leasing spread New Area leased Existing Area Re-leased % split by area (1) % split by area (1) New Tenants 21.6% Existing Tenants 4.7 msf 38.6% 6.2 msf Leased to 27.2% Re-l
Slide 21: Projects Updates
Projects Updates mindspacereit.com 21
Slide 22: Development Progress & Other Updates
Development Progress & Other Updates Mumbai Region Pune Mindspace Airoli, West (B9) Commerzone Kharadi (B5) • Leasable area: 1.0 msf • Leasable area: 0.7 msf • Status: Façade WIP • Status: Level 11 RCC WIP • Received OC for 3 office floors • Estimated completion : Q1 FY23 • Estimated completion: Pha
Slide 23: Mindspace Airoli (West) – Building 9 Interior Shots
Mindspace Airoli (West) – Building 9 Interior Shots Attractive Lobby Workspace Reception Area Workspace mindspacereit.com 23
Slide 24: Commerzone Kharadi, Pune – B6 - Food Court Snapshot
Commerzone Kharadi, Pune – B6 - Food Court Snapshot mindspacereit.com 24
Slide 25: Mindspace Madhapur, Hyderabad – Upgrade
Mindspace Madhapur, Hyderabad – Upgrade Boardwalk AB Junction (Completed) Board walk Extension to C Junction MLCP Food Court – Excavation WIP Food Court Perspective mindspacereit.com 25
Slide 26: Financial Updates
Financial Updates mindspacereit.com 26
Slide 27: 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 Q1 FY22 Q2 FY22 H1 FY22 Q1 FY22 Q2 FY22 H1 FY22 Q2 FY22 Mindspace Airoli (E) 884 849 1,733 697 701 1,399 20% Mindspace Airoli (W) 475 503 978 392 352 744 10% Mindspace Mala
Slide 28: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q2 FY22 Revenue from Operations 4,234 Property Taxes & Insurance (206) Other Direct Operating Expenses (433) Net Operating Income (NOI) 3,592 Property Management Fees (108) Net Other Expenses (139) EBITDA 3,344 Cash Taxes (Net of Refunds) (467) Working Capital chan
Slide 29: 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 CRISIL : CCR AAA/Stable(1) 14.9 % INR 4.6 Bn INR 38.5 Bn ICRA : ICRA AAA (Stable)(1) Low Net Debt to Market Value (2)(3) Undrawn Committed Facilities Net
Slide 30: Price Performance & Unitholding
Price Performance & Unitholding mindspacereit.com 30
Slide 31: Price / Volume Performance & Movement
Price / Volume Performance & Movement (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 300 250 (Nifty Realty: + 152%) 200 (Nifty : + 57%) 150 100 (Mindspace REIT: + 12%) 50 07-Aug-20 07-Nov-20 07-Feb-21 07-May-21 07-Aug-21 30-Sep-21 Mindspace REIT Nifty
Slide 32: Unitholding Summary
Unitholding Summary Unitholding Pattern as on 30 Sep 21 Unitholding Summary AIF NII DII 593 Mn units 0.9% 8.8% 3.2% (Market Cap : INR 182 Bn) (1) FII 13.2% Insurance 1.1% Sponsors & Sponsor Public Group (Others) 593 Mn Outstanding 63% 37% Mutual Funds Units 0.3% Blackstone 9.2% Marquee Investors Spo
Slide 33: Market Updates
Market Updates mindspacereit.com 33
Slide 34: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock 9M CY2021 Thane Worli-Lower ▪ Recovery in leasing activity expected during early 2022 driven 10.3% Parel by “Return to Office” strategies in a phased manner 10.6% ▪ Upcoming speculative developments expected to witness Others slippages in completion due
Slide 35: Hyderabad Key Updates
Hyderabad Grade-A Office Stock 9M CY2021 Supply, net absorption and vacancy trend analysis (1) Micro-Markets : Madhapur 8.00 7.4 7.5 10.00% Madhapur 9.2% 9.00% 4.7% 7.00 65.3% Others 8.00% 2.4% 6.00 7.00% 5.00 4.5 6.6% 3.8 4.0 6.00% Stock Peripheral 4.00 3.7 3.6 3.3 5.00% 73.5 msf East 4.00% 2.2 3.0
Slide 36: Pune Key Updates
Pune Grade-A Office Stock 9M CY2021 Supply, net absorption and vacancy trend analysis Micro-Market: SBD East Others 11.2% 3.0 7.0% PBD West 2.6 22.9% 2.5 5.9% 2.4 2.1 5.1% 6.0% 2.0 5.0% 2.0 1.5 1.5 4.1% 4.0% Stock 1.5 1.2 1.1 55.9 msf 3.0% 2.3% 3.5% 1.0 2.0% (1) SBD West SBD East 0.5 0.3 1.0% 10.6%
Slide 37: Chennai Key Updates
Chennai Grade-A Office Stock 9M CY2021 Supply, net absorption and vacancy trend analysis Micro-Market: South-West Others 11.0% 1.80 12.0% 20.6% 1.60 1.6 (1) 9.7% 10.0% South-West 1.40 24.2% 1.20 7.1% 4.6% 8.0% 0.6 0.9 1.00 0.8 6.0% Stock 0.80 2.1% 54.6 msf 0.60 0.4 0.4 0.4 4.0% 0.4 0.2 0.40 2.0% Per
Slide 38: ESG via Value Creation
ESG via Value Creation mindspacereit.com 38
Slide 39: Key Achievements and Awards
Key Achievements and Awards Awarded 36 Five Star rating across 4 parks Green Buildings Sword of Honour for 2 parks COVID 19 Assurance Statement for 6 parks >18.7 msf Commercial Project of the Total “Green year - By Realty Conclave Building” Gera Commerzone Kharadi Footprint Annual Exports Awards - M
Slide 40: 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 41: 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 42: Facilitated Vaccination of c.94k People
Embarking on a Journey to Safety, Facilitated Vaccination of c.94k People Vaccination Drive 7 150 No. of Parks Staff & families 93.8k 1,200 Tenant workforce Construction workers c.95k Total No. of Vaccines Facilitated Partnered Hospitals S.L. Raheja Aditya Birla Fortis Apollo Columbia Asia Cloud 9 m
Slide 43: Annexure
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 LLP SPV: K Raheja IT SPV: Avacado SPV: Mindspace SPV: KRC SPV: Horizonview SPV: Intime SPV: Su
Slide 45: Portfolio Summary
Portfolio Summary 23.9 msf of Completed area with Committed Occupancy of 84.9% & WALE of 6.7 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 88.1% 88.1% 5.2 53
Slide 46: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile H2 FY22 FY23 FY24 Area % of Gross Rent at % of Gross Rent at Area % of Gross Rent at Asset Area Expiring Expiring Contracted Expiry Contracted Expiry Expiring Contracted Expiry (msf) (msf) Rentals (INR psf) Rentals (INR psf) (msf) Rentals (INR psf) Mindspace Airoli Ea
Slide 47: Balance Sheet
Balance Sheet Balance Sheet (INR Mn) 30 Jun 21 30 Sep 21 Notes Sources of Funds 1) Debt is prior to minority interest Total Equity 169,430 167,792 adjustment Sub-Total 169,430 167,792 2) Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Liabilities Money, Advances from
Slide 48: Debt Maturity Schedule as on 30 Sep 21
Debt Maturity Schedule as on 30 Sep 21 Principal Repayment Interest Wt. Avg. Description Fixed/ Total Undrawn Principal Rate Maturity H2 FY28 & (INR Mn) Floating Facility Facility O/S FY23 FY24 FY25 FY26 FY27 Total (p.a.p.m.) (Years) FY22 Beyond At REIT Level MLD (Series 1) Fixed 5,000 - 5,000 6.6%
Slide 49: Summary of Valuation as on 30 Sep 21
Summary of Valuation as on 30 Sep 21 Project wise Market Value breakup Market Value (INR Mn) Market Value (%) Asset UC/Future UC/Future Completed Total Completed Total Dev. Dev. Mindspace Airoli East 41,823 1,919 43,742 16.3% 0.7% 17.0% Mindspace Airoli West 31,692 7,413 39,105 12.3% 2.9% 15.2% Mind
Slide 50: 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 Hyderabad | 1.8 msf 3 currently Commerzone Madhapur identified assets Status: • 1.8 msf pre-leased • 20th floor WIP • Expected completion: Phase 1 – OC received Phase 2
Slide 51: Research Houses Covering Mindspace REIT
12 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 52: 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 53: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 53
Mindspace Business Parks REIT — Q2 FY22 Earnings Presentation on 6ix