Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q1 FY25 Earnings Presentation
67 slides from Mindspace Business Parks Reit's earnings presentation, Jul 30, 2024
Slide 1: Q1 FY25 Investor Presentation
Q1 FY25 Investor Presentation 30th July 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 Highlights : Q1FY25 04 Project Updates 10 Financial Updates 13 Our Markets 18 Our Growth Drivers 26 Our Franchise & Portfolio 29 Re-energizing Parks 40 Value Creation via ESG 49 Shareholding Pattern 53 Annexures 55 Note: 1. For ease and simplicity of representation, certain fig
Slide 4: Key Highlights
01 Key Highlights mindspacereit.com 4
Slide 5: Q1 FY25: Strong Operational Performance driving Financial Growth
Q1 FY25: Strong Operational Performance driving Financial Growth 91.1% Rising Committed Occupancy excl. Pocharam (1) 1.1 msf Robust Gross Leasing 9.2 % Y-o-Y NOI growth Y-o-Y INR c. 3.0 Y-o- Bn Distribution up 5% YoY 1.5 msf New Development planned in Airoli East 0.5 msf Received approval for NPA co
Slide 6: Strong Leasing momentum results in Committed Occupancy surpassing 91%
Strong Leasing momentum results in Committed Occupancy surpassing 91%(1) Key Operating Indicators Q1 FY25 Gross Leasing 1.1 msf Re-leased Area 0.6 msf New and Vacant Area Leased 0.5 msf Re-leasing Spread(2) 23.9 % on 1.0 msf Average Rent for Area Leased INR c. 72 psf/Month Portfolio In-Place rent IN
Slide 7: Modern and Sustainable workplaces attracting occupiers
Modern and Sustainable workplaces attracting occupiers Rising occupancies across parks; 6 out of 9 parks(1) achieving >96% committed occupancy levels 100% 100% 100% 99.6% 97.4% 96.4% Gera The Square The Square Mindspace Mindspace Commerzone Commerzone Nagar Road BKC Malad Madhapur Yerwada Kharadi Pu
Slide 8: Lease Expiry Profile
Lease Expiry Profile Released 68% out of 0.9msf expiries in Q1 FY25; No material increase in expiries for Q2-Q4 FY25 ~63% releasing visibility (inc. area re-let in Q1) for 2.1 Track record of achieving Re-leasing spread msf expiries in FY25 across parks Area Expiry (msf) Area Re-leased (since Apr 20
Slide 9: Key Strategic initiatives
Key Strategic initiatives Perspective c .1.5 msf 1 • Configuration: G + 5P+ 14 office floors(1) Planned strategic development in Airoli • Estimated commencement: End Q3 FY25(2) East to meet anticipated demand in 3 – 4 • Estimated Completion Date: Q4FY28 years mindspacereit.com 9 1. Design under fina
Slide 10: Project Updates
02 Project Updates mindspacereit.com 10
Slide 11: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) 4.4 msf of Ongoing developments Pune Mumbai Region Mumbai Region Commerzone Kharadi Mindspace Airoli East Mindspace Airoli West Building 4 Highstreet Building 8- Data center ▪ Leasable area: ~0.3 msf ▪ Leasable area: ~1.0 msf ▪ Leasable area: ~0.05 msf ▪ 100% Pre-
Slide 12: 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: B1 & GF slab casting work ▪
Slide 13: Financial Updates
03 Financial Updates mindspacereit.com 13
Slide 14: Key Financial Indicators Q1 FY25
Financial Performance Supported by Strong Operational Performance Key Financial Indicators Q1 FY25 Figures in INR Mn 10.6% Revenue from Operations(1) 6,198 Y-o-Y 9.2% Net Operating Income(1) 4,964 Y-o-Y Distribution 5.0% 2,989 Y-o-Y DPU 5.0% 5.04 p.u Y-o-Y (low debt levels to Loan to Value 21.9% sup
Slide 15: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q1 FY25 Revenue from Operations(1) 6,198 Property Taxes & Insurance (191) Other Direct Operating Expenses (1,043) Net Operating Income (NOI) 4,964 Property Management Fees (141) Net Other Expenses (139) EBITDA(1) 4,684 Cash Taxes (Net of Refunds) (395) Working Capi
Slide 16: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 65,504 Mn 21.9 % INR 7,771 Mn 7.9% 3.6 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 17: Sustainability initiatives and Recognitions
Sustainability initiatives and Recognitions First Indian REIT to raise Sustainability Linked Bond Awards & Recognitions INR 6.5 Bn subscribed by IFC • Opportunity to optimize cost through a step down mechanism Business World - Finance innovation • Reduction in coupon linked to sustainability targets
Slide 18: Our Markets
04 Our Markets mindspacereit.com 18
Slide 19: Indian Office Sector: Riding the Winds of Favorable Trends
Indian Office Sector: Riding the Winds of Favorable Trends Emerging trends Rising GCC Return to in India’s Office Domestic landscape Office Market Occupiers c. 19 msf c. 33% 43% c. 70% Net absorption in %Contribution to % share in overall Physical Occupancy H1CY2024(1) occupied office gross leasing
Slide 20: GCCs: India a preferred destination
GCCs: India a preferred destination c. 50% 72 msf 1.7 Mn c. 85% % share of India in Total demand of GCC employees in Lower average global GCC Grade A office India(1) salary of engineers market(1) space from GCCs viz-a-viz developed since 2020(2) countries(3) GCC Growth forecast(2)(3) 2400 270 291 23
Slide 21: Hyderabad – Second largest Tech hub of India
Hyderabad – Second largest Tech hub of India Progressive government policies and Infrastructure growth are key market drivers Hyderabad’s GCC Landscape 9.1 Lakh 60% 180+ 31% Tech workforce in Telangana Share of GCCs in overall GCCs in Hyderabad(6) % share of Pan India GCC driven by Hyderabad(1) leas
Slide 22: Madhapur as the preferred office market drives highest absorption in Hyderabad
Madhapur as the preferred office market drives highest absorption in Hyderabad 70-80 2nd 73 msf 66% Rs psf (in Size) 57% share of City’s Share of net absorption since Highest rentals amongst all Largest micro market across office stock(1) CY 2019(1) micro markets India (1) (1)i n m Source: d s p aJL
Slide 23: Mumbai Region - Infrastructure projects upgrades driving office demand uptick
Mumbai Region - Infrastructure projects upgrades driving office demand uptick Navi Mumbai – A Preferred Location with Accessible Talent 132 msf top 3 3.0 msf Ranked amongst in terms of overall quality of living in India 3 Ranked rd , 2nd time in a row, in cleanliness index(2) in India Completed Stoc
Slide 24: Pune - Thriving Office Market with Excellent Social Infrastructure
Pune - Thriving Office Market with Excellent Social Infrastructure SBD East Micro Market(2) 79 msf ~3.5 msf 44 msf 56% Completed Stock as on Avg. annual net absorption Q2 CY2024( (1) since CY 2019 (1) 56% share of City’s Share of net absorption office stock(1) since CY 2019(1) 85-90 Pune Airport cap
Slide 25: Chennai - One of the key growth markets
Chennai - One of the key growth markets South-West Micro Market(2) 76 msf ~3.4 21 msf 31% msf Completed Stock as on Average annual net 28% share of City’s Share of net absorption Q2 CY2024(1) absorption since 2019(1) office stock(1) since 2019 (1) Highest ever net leasing in Chennai in CY2023 6.6 Ch
Slide 26: Our Growth Drivers
05 Our Growth Drivers mindspacereit.com 26
Slide 27: Embedded opportunities within Portfolio to drive NOI and Occupancy growth
Embedded opportunities within Portfolio to drive NOI and Occupancy growth Focused execution and leveraging growth levers to drive NOI growth • Lease up of vacant Area : 2.3 msf (ex. Pocharam) • C.80% Of Vacancy is in SEZ area • Strong leasing evidenced for converted spaces ~9.5 Organic NOI Growth ms
Slide 28: Near term Portfolio Growth Potential
Near term Portfolio Growth Potential Commerzone Raidurg The Square BKC 98 Hyderabad Mumbai Continuous sponsor pipeline (~15 msf potential) Two assets already offered(1) 1.8 msf 0.15 msf Leased to US tech giant Leased to BFSI tenant In addition to sponsor assets, third party inorganic opportunities b
Slide 29: Our Franchise & Portfolio
06 Our Franchise & Portfolio mindspacereit.com 29
Slide 30: Sponsored by One Of India's Leading Real Estate Group
Sponsored by One Of India’s Leading Real Estate Group Over 6 decades of experience across Residential, Office, Malls & Hotels Office Hospitality Malls Residential Retail Leasable Area >50 msf (1) 3,300+ (2) operational 4 operational malls Developed residential Operates 230+ retail hotel keys project
Slide 31: Presence in Key Office Markets
Presence in 4 Key Office Markets Located strategically in established office micro-markets Mumbai Hyderabad Region 13.3 msf 13.7 msf 33.6 msf Total Leasable Area Presence in Presence in Malad-Goregaon Madhapur and micro-market Navi Mumbai IT Corridor markets Mumbai ` Pune Hyderabad Chennai Presence
Slide 32: Delivered Robust Performance
Delivered Robust Performance Cumulative distribution of INR 71.3 p.u. since listing 21.1% c. 16.1 msf (1) Releasing Spread on Gross Leasing 11.6 msf INR 42.3 Bn 11.4 % Total distribution(3) Annualized returns(7) 2.3 msf 7.9 % p.a.p.m. Delivered New Cost of Debt as on 30 Developments Jun 24(5) 7.0% C
Slide 33: High Quality Office portfolio in Prime Locations (1/5)
High Quality Office portfolio in Prime Locations (1/5) Mindspace Madhapur: Largest Business Park in Hyderabad 13.1 msf 9.6 msf 97.4 % Leasable Area Completed Area Committed Occupancy Data m i n das s pofa 30 c ethrJune 2024 eit.c om 33
Slide 34: High Quality Office portfolio in Prime Locations (2/5)
High Quality Office portfolio in Prime Locations (2/5) Commerzone Kharadi, Pune 2.9 msf Leasable Area 1.9 msf Completed Area 100% Committed Occupancy Commerzone Yerwada, Pune 1.7 msf Leasable Area 1.7 msf Completed Area 96.4% Committed Occupancy Data m i n das s pofa 30 c ethrJune 2024 eit.c om 34
Slide 35: High Quality Office portfolio in Prime Locations (3/5)
High Quality Office portfolio in Prime Locations (3/5) The Square Nagar Road, Pune 0.8 msf Leasable Area 0.8 msf Completed Area 100% Committed Occupancy Commerzone Porur, Chennai 1.1 msf Leasable Area 1.1 msf Completed Area 90.0% Committed Occupancy Data m i n das s pofa 30 c ethrJune 2024 eit.c om
Slide 36: High Quality Office portfolio in Prime Locations (4/5)
High Quality Office portfolio in Prime Locations (4/5) Mindspace Airoli East, Navi Mumbai 7.1 msf Leasable Area 4.8 msf Completed Area 78.4% Committed Occupancy Mindspace Airoli West, Navi Mumbai 5.3 msf Leasable Area 5.0 msf Completed Area 83.2% Committed Occupancy Data m i n das s pofa 30 c ethrJu
Slide 37: High Quality Office portfolio in Prime Locations (5/5)
High Quality Office portfolio in Prime Locations (5/5) Mindspace Malad, Mumbai 0.8 msf Leasable Area 0.8 msf Completed Area 99.6% Committed Occupancy The Square BKC, Mumbai 0.1 msf Leasable Area 0.1 msf Completed Area 100.0% Committed Occupancy Data m i n das s pofa 30 c ethrJune 2024 eit.c om 37
Slide 38: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 27.5% (Jun 24) vs. 28.1% (Mar 24) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (27.5%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks L&T 4.3
Slide 39: 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 40: Re-energizing Parks
07 Re-energizing Parks mindspacereit.com 40
Slide 41: Dynamic Environment, Vibrant Workspaces
Dynamic Environment, Vibrant Workspaces mindspacereit.com 41
Slide 42: Energized Landscape for Business Excellence
Energized Landscape for Business Excellence mindspacereit.com 42
Slide 43: Infusing modern design elements to elevate experience
Infusing modern design elements to elevate experience Tailoring common areas to meet the evolving preferences of tenants mindspacereit.com 43
Slide 44: Experience Center: An Inclusive Ecosystem for all Lifestyle & Business Needs
Experience Center: An Inclusive Ecosystem for all Lifestyle & Business Needs Enhancing the Mindspace offering with a modern club facility with top notch amenities c. 130 ksf Exclusive and premium space Perspective Offers enriching entertainment, sports, lifestyle, recreation and dining experiences m
Slide 45: Curated mix of amenities enhancing work place experience
Curated mix of amenities enhancing work place experience Badminton | Squash | Indoor-Outdoor Cafes Bar and Lounge Tennis Yoga | Meditation | Aerobic State of the art gym facility Half Olympic Size Lap Pool Rooms mindspacereit.com 45
Slide 46: SOCIALising at Vantage Café in the Park
SOCIALising at Vantage Café in the Park Launched the first-ever One of the largest SOCIAL SOCIAL in Hyderabad OUTLETS in the country mindspacereit.com 46
Slide 47: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie IPL SCREENING IPL SCREENING HAPPY VIBES FEST – Mango Wonderland HAPPY VIBES FEST – Mango Wonderland HAPPY VIBES FEST – Around the World HAPPY VIBES FEST – Around the World PHOTOGRAPHY EXHIBITION PHOTOGRAPHY EXHIBITION PHOTOGRAPHY EXHIBITIO
Slide 48: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie PHOTOGRAPHY 1 RAVI GUPTA LIVE 2 HAPPY VIBES FEST 3 EXHIBITION SUCCESS METRIC Total digital impressions- Avg. feedback Over 35,000 employees across 6 of our business No of Parks-6 14.3 lakhs parks attended the events rating of 4.58/5 mindsp
Slide 49: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 49
Slide 50: ESG - Key Highlights
ESG - Key Highlights Scope 1+2 emission 28.9% 56,645 Renewable energy mix tCO2e for FY24(1) (30.4% reduction from FY20 baseline) 12,58,068 KL 61.4% of material Water Recycled sourced using sustainable sourcing INR 12 Bn(3) INR 6.5 Bn(2) of Cumulative Green Sustainability linked Bond Financing availe
Slide 51: 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 52: 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 53: Shareholding Pattern
08 Shareholding Pattern mindspacereit.com 53
Slide 54: Unitholding Pattern as on 30 June 2024
Unitholding Pattern as on 30 June 2024 Unitholding Summary INR 19,753 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 197 Bn) (1) MF AIF 1.3% 0.4% Insurance 1.8% NIIs 10.9% Sponsors & Sponsor Public DIIs Group (Others) 3.5% Total 63.5% 36.5% Unitholders 63,788
Slide 55: Annexure
09 Annexure mindspacereit.com 55
Slide 56: 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)(1) NOI (INR Mn)(1) % of NOI Assets Q1 FY25 Q1 FY24(2) Q1 FY25 Q1 FY24(2) Q1 FY25 Mindspace Airoli (E) 1,026 970 785 721 16% Mindspace Airoli (W) 928 842 683 627 14% Mindspace Malad 259 233 232 207 5% T
Slide 57: 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 58: Portfolio Summary
Portfolio Summary 26.3 msf of Completed area with WALE of 6.9 years and MTM potential of 7.5%(1) 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 7.1 4.8 2.3 69.4% 78.4%
Slide 59: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q2-Q4 FY25 FY26 FY27 Asset Area % of Gross Rent at Area % of Gross Rent at Area % of Gross Rent at Expiring Contracted Expiry Expiring Contracte Expiry Expiring Contracted Expiry (msf) Rentals (INR psf) (msf) d Rentals (INR psf) (msf) Rentals (INR psf) Mindspace Airol
Slide 60: Key Financial Metrics
Key Financial Metrics Delivered consistent growth on key financial metrics Revenue (INR mn) NOI (INR mn) (1,3) 4,912 4,964 5,999 120 (2) 4,818 6,198 4,768 (87) (2) 5,999 5,948 4,551 4,545 4,792 120 (2) 5,440 186 (2) 4,364 4,731 5,360 5,604 4,172 186 (2) 5,879 4,014 4,974 4,365 4,916 5,254 Q1 FY23 Q2
Slide 61: Balance Sheet as on 30 Jun 24
Balance Sheet as on 30 Jun 24 Balance Sheet (INR Mn)(1) Jun-24 Mar-24 Notes 1. All numbers are prior to minority Sources of Funds adjustment Total Equity 147,836 149,285 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Sub-Total 147,836 149,285 Money, Advances from
Slide 62: Debt Maturity Schedule as on 30 Jun 24
Debt Maturity Schedule as on 30 Jun 24 Interest Wt. Avg. Principal Repayment Description Fixed/ Total Undrawn Principal Rate Maturity Q2-Q4 FY30 & (INR Mn) Floating Facility Facility O/S FY26 FY27 FY28 FY29 Total (p.a.p.m.) (Years) FY25 Beyond At REIT Level NCD (Tranche 3) Fixed 5,000 - 5,000 6.3% 0
Slide 63: De-risked Portfolio with ~91.0% Completed Assets
De-risked Portfolio with ~91.0% Completed Assets Project wise Market Value breakup (1) Completed Assets form 91.0% of the Market Value(3) U/C & Total % of Completed Asset Future Dev. Value Total (INR Mn) (INR Mn) (INR Mn) (%) Under Construction Mindspace Airoli East(4) 45,424 2,100 47,524 15.9% 8.0%
Slide 64: Stable Distribution with Potential Organic Growth
Stable Distribution with Potential Organic Growth Distribution Overview Q1 FY25 Q1 FY25 Other Income, ₹0.01, 0% Interest, ₹0.34, Repayment of Distribution SPV debt, 7% ₹1.66, 33% INR 2,989 Mn DPU INR 5.04 p.u. Yield Dividend, ₹3.03, 60% 6.1% Declaration Date Record Date Payment Date Key Dates On or
Slide 65: Research Houses Covering Mindspace REIT
14 Research Houses Covering Mindspace REIT Research House Analyst Email Id Ambit Capital Karan Khanna karan.khanna@ambit.co Avendus Spark Girish Choudhary girish.c@avendusspark.com Axis Capital Samar Sarda samar.sarda@axiscap.in Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Rajiv Be
Slide 66: 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 67: Thank You
Thank You Investor Relations Enquiries: Nitin Garewal (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 67
Mindspace Business Parks REIT — Q1 FY25 Earnings Presentation on 6ix