Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q3 FY2024 Earnings Presentation
43 slides from Brookfield India Real Estate Trust's earnings presentation, Feb 12, 2024
Slide 1: Q3 FY2024 Investor Update
Brookfield India Real Estate Trust Q 3 F Y 2 0 2 4 – I N V E S T O R U P D AT E F E B R U ARY 1 2 , 2 0 2 4 DOWNTOWN POWAI, MUMBAI
Slide 2: Disclaimer
Disclaimer By reading this presentation (the “Presentation”), you agree to be bound by the following limitations: This Presentation is for information purposes only without regard to specific objectives, financial situations or needs of any particular person, and should not be disclosed, reproduced,
Slide 3: Brookfield India Real Estate Trust
Brookfield India Real Estate Trust India’s only 100% institutionally managed office REIT, owning 25.4 MSF of class A office properties Gurugram Noida (7.4 MSF) 25.4 MSF 20.7 MSF (7.9 MSF) 7.6 0.2(3) 5.8 1.6 TOTAL AREA OPERATING AREA 34% 24% 80% 88% 9% Kolkata (5.8 MSF) COMMITTED EFFECT
Slide 4: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities 34% 18% 16% DOWNTOWN POWAI, MUMBAI(1) CANDOR TECHSPACE G1 CANDOR TECHSPACE G2 4.3 MSF | 29 ACRES 3.8 MSF | 25 ACRES 4.1 MSF | 29 ACRES 15% 9% 9% CANDOR TECHSPACE N2 CANDOR TECHSPACE N1 CANDOR TECHSPACE K1 4.6 MSF | 30 ACRES 2.8 MSF | 19
Slide 5: Leasing Success | Strong Quarter
Leasing Success | Strong Quarter Achieved gross leasing of 1.0 MSF during the quarter; we expect 2.0 MSF+ new leasing in the next 4 - 5 quarters GROSS LEASING - Q3 FY2024 Rs 133 PSF Accenture AVERAGE RENT(1) Deloitte 8.5 Yrs. AVERAGE TERM(1) 49% 1.0 MSF 51% CRISIL 12% Pine Labs AVERAGE RE-LEAS
Slide 6: Leasing Success | Strong Quarter (Cont’d.)
Leasing Success | Strong Quarter (Cont’d.) SELECT NEW LEASES / RENEWALS(1) Tenant Assets Area (SF) Newgen N2 89,000 Rs 94 PSF AVERAGE RENT ON NEW LEASING(2) L&T Hydrocarbon Downtown Powai (SEZ) 55,000 Accenture G2 52,000 Capgemini K1 48,000 Amdocs G2 37,000 Absolute Foods G1 36,000 12 Yrs. AVERA
Slide 7: Significant Growth Potential
Significant Growth Potential We have a significant embedded growth headroom of ~Rs 2,650 million (~Rs 6 per unit/yr) through lease up of vacant areas which will flow through to the NDCF NOI GROWTH POTENTIAL (RS MILLIONS) ~Rs 6 per unit / yr Expiring income support in N2 will be offset by the Rs 450
Slide 8: Business at an Inflection Point
Business at an Inflection Point CANDOR TECHSPACE K1, KOLKATA
Slide 9: Business at an Inflection Point
Business at an Inflection Point Positive tailwinds resulting from: (i) Strong demand (ii) Limited term expires (iii) Recently announced SEZ reforms enabling a wider set of occupier interest • Robust leasing over the last few quarters, driven by demand from marquee IT / ITeS tenants and Global Capabi
Slide 10: Improving Leasing Environment
1 Improving Leasing Environment We are direct beneficiaries of strong hiring trends in Global Capability Centers and Technology occupiers LTIMindtree 1.6x 1.3x Headcount (in ‘000’s)(1) 343 1.6x 219 240 183 53 84 Company 1 Company 2 Company 3 1.4x 1.1x 2.3x Leased area 339,000 299,000 271,000 (in SF)
Slide 11: Limited Term Expiries
2 Limited Term Expiries Limited term expiries will help drive the net leasing, resulting in occupancy growth over FY2025 LEASE EXPIRY SCHEDULE (MSF)(1) 5.0 82% 0.6 4.5 54% 4.3 62% 0.4 4.0 3.5 3.6 30% 3.5 3.5 1.9 0.2 2.1 3.0 2.9 0.3 2.5 0 2.0 0.9 -0.2 1.5 1.0 0.9 0.8 1.7 1.7 -0.4 0.5 1.3 0.7 0.0 -0.6
Slide 12: SEZ Reforms
3 SEZ Reforms Recently announced SEZ reforms to further give an impetus to leasing momentum by transforming the user base SEZ AREA CONVERSION Downtown In MSF G2 N2 K1 G1 Total Powai (SEZ) Operating Area 3.9 3.8 3.1 1.6 3.7 18.1 Vacant Area 0.8 0.9 0.8 0.1(1) 1.2 3.9 Under Area Applied for Conversion
Slide 13: Business Updates
Business Updates CANDOR TECHSPACE N1, NOIDA
Slide 14: Q3 FY2024 | Business Highlights
Q3 FY2024 | Business Highlights • New leasing: 509,000 SF, 54% share of GCC’s • Renewals: 539,000 SF 1.0 MSF + 147,000 • LOIs under execution: 147,000 SF Leasing Update Gross LOIs under • Leasing pipeline: 2.6 MSF Leasing execution o Includes discussions on 0.8 MSF with prospective tenants where SEZ
Slide 15: Portfolio Snapshot
Portfolio Snapshot 95% of gross asset value in operating assets, with a Committed Occupancy of 80% (Effective Economic Occupancy of 88%(2)) Area (in MSF) Leased Area Metrics Dev. Area # Office Committed / WALE In-place Rent Asset Operating Total (2) Potential in MSF Tenants Econ. Occ. % (Yrs.) (R
Slide 16: High-quality Tenant Roster
High-quality Tenant Roster SECTOR DIVERSIFICATION OF TENANTS(1) TOP 10 TENANTS(1) % Gross % Leased Tenant Name Industry Contracted Area Rentals Technology, 30% Others, 15% Accenture Consulting 9% 10% TCS Technology 9% 10% FMCG, 2% Retail, 3% Cognizant Technology 5% 8% Telecom, 3% Capgemini Technolog
Slide 17: Lease Expiry Profile
Lease Expiry Profile Portfolio has a well staggered lease expiry profile and provides an opportunity to capture an attractive mark-to-market spread LEASE EXPIRY SCHEDULE Area Expiring Achieved Renewals KEY HIGHLIGHTS Expected Renewals Cumulative Expiry (% of Rentals) • Renewed 0.8 MSF at a 24% sprea
Slide 18: Financial Updates
Financial Updates CANDOR TECHSPACE N2, NOIDA
Slide 19: Q3 FY2024 | Financial Highlights
Q3 FY2024 | Financial Highlights 90% increase in operating income led by recent acquisitions Growth vs Millions Q3 FY2024 Q3 FY2023 • Rs 1,858 million (89.9%) YoY increase: Operating Lease o Rs 12 million (0.6%) due to new leasing and Rentals (OLR) Rs 3,927 90% contractual escalations offset by expi
Slide 20: Q3 FY2024 | Distributions
Q3 FY2024 | Distributions DPU COMPOSITION Rs 2,086 million DISTRIBUTION (Q3 FY2024) Rs 0.06 , 1% Rs 4.75 DISTRIBUTION PER UNIT (DPU) Rs 2.48 , 52% Rs 2.21 , 47% February 20, 2024 RECORD DATE (1) Interest on Shareholder Loan (2) Repayment of Shareholder Loan Interest Income on Fixed Deposits By Febru
Slide 21: NDCF | Walkdown
NDCF | Walkdown INR Million Q1 FY2024 Q2 FY2024 Q3 FY2024 9M FY2024 Income from Operating Lease Rentals (OLR) Rs 2,113 Rs 2,741 Rs 3,927 Rs 8,781 CAM / Other Revenue 1,028 1,256 1,381 3,665 Revenue from Operations Rs 3,141 Rs 3,997 Rs 5,308 Rs 12,446 Income Support 178 514 482 1,173 CAM / Other Dire
Slide 22: NDCF | Walkdown (Cont’d.)
NDCF | Walkdown (Cont’d.) INR Million Q1 FY2024 Q2 FY2024 Q3 FY2024 9M FY2024 NDCF (SPV Level) for the REIT(1) Rs 2,213 Rs 2,048 Rs 2,172 Rs 6,433 Interest on Shareholder Debt/CCD/NCD 800 1,013 1,018 2,831 Repayment of Shareholder Debt/NCD 1,465 1,359 1,091 3,915 Proceeds from commercial papers - 6,
Slide 23: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet Millions December 31, 2023 Total Equity 124,676 Equity 104,522 Non-Controlling Interest 20,154 Liabilities 132,652 Bank Borrowings 99,492 Commercial Paper 7,146 NCD's and CCD's 12,239 Security Deposits 9,230 Oth
Slide 24: Capital Structure and Liquidity
Capital Structure and Liquidity Backed by high proportion of operating assets and less development, our portfolio maintains a AAA credit rating Rs 103 B Dual AAA Rating DEBT MATURITY PROFILE NET EXTERNAL [ICRA]AAA(STABLE) (% of OUTSTANDING DEBT) DEBT(1) CRISIL AAA/NEGATIVE 76% 9 Yrs. AVERAGE MATUR
Slide 25: Information Supplement
Information Supplement CANDOR TECHSPACE G1, GURUGRAM
Slide 26: Brookfield: One of the World’s Largest Real Estate Portfolios
Brookfield: One of the World’s Largest Real Estate Portfolios With ~$271B in real estate AUM and ~30,000 employees across 30+ countries, Brookfield owns, operates and manages one of the world’s largest, highest quality portfolios BROOKFIELD PLACE, NEW YORK POTSDAMER PLATZ, BERLIN BROOKFIELD PLACE, T
Slide 27: Brookfield’s Real Estate Footprint in India
Brookfield’s Real Estate Footprint in India Brookfield is one of the largest real estate investors in India with a high-quality office portfolio spanning 53 MSF (including Brookfield India REIT) BROOKFIELD INDIA REAL ESTATE – KEY FACTS OTHER INDIA OFFICE PORTFOLIO (OUTSIDE REIT) $8.7B 53 MSF ASSET
Slide 28: Robust Pipeline
Robust Pipeline We have access to our Sponsor Group’s assets totaling 28 MSF across India in key gateway cities Delhi N1, N2 Area (in MSF) NCR (Noida) Total Operating Future Dev. G1, G2 (Gurugram) Current Portfolio 25.4 20.7 4.6 Other Brookfield Assets 28.1 19.1 9.0 Mumbai (under ROFO) 4.0 1.7 2.2
Slide 29: Progress on Net Zero
Progress on Net Zero We are actively tracking our emissions and are closely working with all our stakeholders to achieve a Net Zero carbon future by 2040 GREENHOUSE GAS EMISSIONS (‘000 Mt CO2e)(1)(2)(3) ENERGY CONSUMPTION (MILLION UNITS)(1)(3) Scope 2 Scope 1 3 68 5 1 1 2 178 45 137 129 36 36 103 95
Slide 30: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule % of Gross Rentals In-place rent at Expiry Year / Asset Area Expiring (‘000 SF) (Asset / Portfolio) (Rs PSF)(1) Q4 FY2024E Downtown Powai (IT/Commercial) 121 6% Rs 177 Downtown Powai (SEZ) - - - G1 29 - - G2 122 4% 88 N1 62 2% 55 N2 9 - - K1 6 - - Total 349 3% Rs 124 F
Slide 31: Portfolio Occupancy: Q2 FY2024 to Q3 FY2024
Portfolio Occupancy: Q2 FY2024 to Q3 FY2024 September 30,2023 December 31,2023 Operating Leased Committed Operating Leased Committed ASSET Leasing Expiries Renewed area area occupancy area area occupancy Downtown Powai 4,242 3,701 87% - 100 (455) 455 - 4,253 3,800 89% IT/Commercial 2,661 2,380 89% -
Slide 32: Portfolio Occupancy: Q4 FY2023 to Q3 FY2024
Portfolio Occupancy: Q4 FY2023 to Q3 FY2024 March 31, 2023 December 31,2023 Operating Leased Committed Operating Leased Committed ASSET Leasing Expiries Renewed area area occupancy area area occupancy Downtown Powai 4,217 3,729 88% - 232 (637) 475 - 4,253 3,800 89% IT/Commercial 2,655 2,371 89% - 68
Slide 33: Q3 FY2024: New leasing & Renewals
Q3 FY2024: New leasing & Renewals ASSET NEW LEASING RENEWALS GROSS LEASING AREAS in ‘000 SF AREA RENT PSF PM(1) AREA RENT PSF PM(1) AREA RENT PSF PM(1) Downtown Powai 100 164 455 181 554 177 IT/Commercial 21 230 455 181 476 182 SEZ 79 146 - - 79 146 G1 54 90 55 83 109 86 G2 112 98 - - 112 98 N1 48 7
Slide 34: 9M FY2024: New leasing & Renewals
9M FY2024: New leasing & Renewals ASSET NEW LEASING RENEWALS GROSS LEASING AREAS IN ‘000 SF AREA RENT PSF PM(1) AREA RENT PSF PM(1) AREA RENT PSF PM(1) Downtown Powai 232 154 - 475 186 - 708 175 IT/Commercial 68 181 - 475 186 - 543 185 SEZ 165 143 - - - - 165 143 G1 54 90 - 109 83 - 163 86 G2(2) 209
Slide 35: Property Income
Property Income MILLIONS Q3 FY2024 Q3 FY2023 KEY DRIVERS • Rs 1,858 million (89.9%) YoY increase: Income from Operating Lease o Rs 12 million (0.6%) due to new leasing and contractual Rs 3,927 Rs 2,068 escalations offset by expiries Rentals (OLR) o Rs 1,846 million (89.2%) due to recent acquisitions
Slide 36: Property Income
Property Income MILLIONS 9M FY2024 9M FY2023 KEY DRIVERS • Rs 2,622 million (42.6%) YoY increase: Income from Operating Lease o Rs 52 million (0.8%) due to new leasing and contractual Rs 8,781 Rs 6,159 escalations offset by expiries Rentals (OLR) o Rs 2,570 million (41.7%) due recent acquisitions •
Slide 37: Property Income | Consolidation Details (Q3 FY2024)
Property Income | Consolidation Details (Q3 FY2024) INCOME FROM OPERATING REVENUE FROM (1) MILLIONS NET OPEARTING INCOME LEASE RENTALS (OLR) OPERATIONS Q3 FY2024 Q3 FY2023 Q3 FY2024 Q3 FY2023 Q3 FY2024 % OLR Q3 FY2023 % OLR Downtown Powai Rs 1,657 Rs 432 Rs 1,814 Rs 466 Rs 1,529 92% Rs 397 92% IT/Co
Slide 38: Property Income | Consolidation Details (9M FY2024)
Property Income | Consolidation Details (9M FY2024) INCOME FROM OPERATING REVENUE FROM (1) MILLIONS NET OPEARTING INCOME LEASE RENTALS (OLR) OPERATIONS 9M FY2024 9M FY2023 9M FY2024 9M FY2023 9M FY2024 % OLR 9M FY2023 % OLR Downtown Powai Rs 2,858 Rs 1,317 Rs 3,135 Rs 1,425 Rs 2,681 94% Rs 1,229 93%
Slide 39: Ongoing Capex
Ongoing Capex Rs 4.7 billion of capex projects underway across new tower developments and upgrades to existing towers, which will primarily be debt funded. ESTIMATED PENDING COSTS ONGOING PROJECTS DESCRIPTION COMPLETION DATE (MILLIONS) Downtown Powai 1,223 SEZ • Tenant improvements Q4 FY2024 39 •
Slide 40: Holding Structure
Holding Structure TRUSTEE MANAGER Axis Trustee Services Brookprop Management Limited Services Private Limited 100% 100% 100% 100% 100% 50% 50% 50% 50% OPERATIONAL ASSET SPV SERVICE ASSET SPV ASSET SPV ASSET SPV ASSET SPV ASSET SPV PROVIDER Candor Kolkata Shantiniketan Seaview Kairos Property Candor
Slide 41: Research Coverage
Research Coverage RESEARCH HOUSE ANALYST EMAIL ID Ambit Karan Khanna Karan.Khanna@ambit.co Axis Capital Samar Sarda Samar.Sarda@axiscap.in BofA Securities Kunal Tayal Kunal.Tayal@bofa.com Citi Atul Tiwari Atul.Tiwari@citi.com CLSA Kunal Lakhan Kunal.Lakhan@clsa.com HSBC Bank Puneet Gulati PuneetGula
Slide 42: Glossary (1/2)
Glossary (1/2) BIRET Brookfield India Real Estate Trust Gross Asset Value / Asset Value The market value as determined by the Valuer as of September 30, 2023 (Occupied Area + Completed Area under Letters of Intent) Committed Occupancy In % Completed Area Weighted Average Lease Expiry based on area.
Slide 43: Glossary (2/2)
Glossary (2/2) Net distributable cash flows (non-GAAP measure). Please refer to pg. 285-287 of the Offer NDCF Document for calculation methodology Sum of Leased Areas and any eligible areas under any income Effective Economic Occupancy support arrangement (excluding Leased Areas) In % Operating Area
Brookfield India Real Estate Trust — Q3 FY2024 Earnings Presentation on 6ix