Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q3 FY2022 Earnings Presentation
53 slides from Mindspace Business Parks Reit's earnings presentation, Feb 10, 2022
Slide 1: Q3 FY 2022 Results Presentation
Mindspace Business Parks REIT Q3 FY 2022 Results Presentation 10 February 2022 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 11 Projects & Other Update 19 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. Mi
Slide 4: Key Updates
Key Updates mindspacereit.com 4
Slide 5: Key Highlights - Q3 FY22
Key Highlights - Q3 FY22 1 Operating Highlights Gross Leasing 1.8 msf (1) Commerzone 0.7 msf (1) Kharadi, Pune Pre-leased entire U/C building (REIT) Average Rent achieved on Gross Leasing INR 64 psf month New Area Leased 1.0 msf Re-leasing Spread 27.8 % Re-leased Area 0.8 msf 2 Financial Highlights
Slide 6: Key Highlights – 9M FY22
Key Highlights – 9M FY22 1 Operating Highlights 3.8 msf 37.0 % 0.7 msf 99.1 % 2.3 msf Gross Leasing(1) Re-leasing Spread(2) Successfully pre-leased entire Collections of Total ROFO leasing update(5) on 2.5 msf U/C building at Commerzone Contracted Kharadi, Pune(1) Rentals (3)(4) 2 Financial Highligh
Slide 7: Leasing Overview – Q3 FY22
Leasing Overview – Q3 FY22 1.8(1) msf leases signed across 26 tenants and achieved 27.8%(2) Re-leasing spread on 0.8 msf(2) 1.8 msf INR 64 psf/month 27.8 % Q3 FY22 Gross Leasing(1) Average Rent for Area Leased Average Re-leasing Spread(2) Q3 FY22 – Gross leasing Area Re-leased (3) 0.73 msf Industry
Slide 8: Leasing Overview – 9M FY22
Leasing Overview – 9M FY22 3.8 msf(1) leases signed across 47 tenants and achieved 37.0%(2) Re-leasing spread on 2.5 msf(2) 3.8 msf INR 68 psf/month 37.0% 9M FY22 Gross Leasing (1) Average Rent for Area Leased Average Re-leasing Spread(2) 9M FY22 - Split Basis Type of Tenants (3) Area Re-leased 2.00
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Revenue from NOI Operations Key Points (INR Mn) (INR Mn) 9M FY22 12,835 10,904 NOI Q3 FY22 – Growth of 3.8% y-o-y, and 3.4% on sequential basis Q3 FY22 4,404 3,715 Q2 FY22 4,234 3,592 NOI 9M FY22 – Growth of 7.3% y-o-y (1) 9M FY21 12,018 10,162 Maintained
Slide 10: Mindspace REIT Declares Q3 FY22 Distribution
Mindspace REIT Declares Q3 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 Oct 21 to Dec 21 Distribution Amount INR 2,752 Mn Outstanding Units 593,018,182 Declaration Date 10 Feb 22 Interest ₹0.32 Re
Slide 11: Portfolio Overview
Portfolio Overview mindspacereit.com 11
Slide 12: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 31.3 msf INR 59.0 psf Total Leasable Area (1) In-place Rent 84.7% 84.6% Same Store Committed Committed Occupancy Occupancy on 23.6 msf on 24.2 msf ` Mumbai Region Hyderabad 7.3% 6.9 years 12.8 msf (41.0 %) 12.
Slide 13: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 11.6 msf Mumbai Region | 6.8 msf Completed Area: 9.8 msf; Committed Occupancy: 89.6% Completed Area: 4.7 msf; Committed Occupancy: 86.8% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Region
Slide 14: 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: 30.3% Completed Area: 0.7 msf; Committed Occupancy: 93.6% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8
Slide 15: 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 16: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Reduced concentration risk with top 10 tenants contributing 37.0% (Dec 21) vs. 40.3% (Mar 21) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (37.0%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contr
Slide 17: 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 18: Ability to Attract New Tenants along with Existing Tenant Retention
Ability to Attract New Tenants along with Existing Tenant Retention 12.7 msf leased since Apr 18, including 7.0 msf at 27.3% Re-leasing spread New Area leased Existing Area Re-leased % split by area (1) % split by area (1) New Tenants 18.6% Existing 5.7 msf Tenants 7.0 msf Leased to 42.6% 27.3% Re-l
Slide 19: Projects & Other Update
Projects & Other Update mindspacereit.com 19
Slide 20: Development Progress & Other Updates
Development Progress & Other Updates Mumbai Region Pune Mumbai Region Mindspace Airoli West (B9) Commerzone Kharadi (B5) Mindspace Airoli West (Data Center) ▪ Leasable area: 1.0 msf ▪ Leasable area: 0.3 msf (Block 1) ▪ Leasable area: 0.7 msf ▪ Status: Façade WIP ▪ Status: 1st floor slab casting WIP
Slide 21: Receipt of ROFO Notice – Commerzone Madhapur, Hyderabad
Receipt of ROFO Notice – Commerzone Madhapur, Hyderabad Mindspace Received ROFO notice for c.1.8 msf Commerzone Madhapur Madhapur asset Durgam Chevaru Lake Located in Madhapur, a prime district of Hyderabad Commerzone Madhapur Location Project is partly completed and is expected to complete by Q4 FY
Slide 22: Commerzone Kharadi, Pune – Select Images
Commerzone Kharadi, Pune – Select Images Integrated “Business Ecosystem” with various on-site facilities and amenities Beautified Podium Hardscape & Landscape Spacious lobby with Amphitheatre Attractive Aesthetics Biophilic Landscape mindspacereit.com 22
Slide 23: Mindspace Airoli (W) – Building 9 Entrance Lobby Snapshot
Mindspace Airoli (W), Mumbai Region – Building 9 – Entrance Lobby Snapshot mindspacereit.com 23
Slide 24: Mindspace Airoli (E), Mumbai Region – Upgrade Snapshot
Mindspace Airoli (E), Mumbai Region – Upgrade Snapshot Energized & Appealing Entry Points Attractive Aesthetics & Outside Seating placed across park Recreational Area Food Court Upgrade – Easier F&B access to clients mindspacereit.com 24
Slide 25: Mindspace Madhapur, Hyderabad – Upgrade
Mindspace Madhapur, Hyderabad – Upgrade Integrated “Business Ecosystem” with various on-site facilities and amenities Appealing Entry Points & L&T Metro Boardwalk connection - Completed Elevated Boardwalks for Ease of Movement – Phase 1 - Completed Vantage Café - Well Spread F&B Spaces across the Pa
Slide 26: Financial Update
Financial Update 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 Q2 FY22 Q3 FY22 9M FY22 Q2 FY22 Q3 FY22 9M FY22 Q3 FY22 Mindspace Airoli (E) 849 871 2,604 701 701 2,100 19.3% Mindspace Airoli (W) 503 537 1,516 352 410 1,154 10.6% Mindsp
Slide 28: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q3 FY22 Revenue from Operations 4,404 Property Taxes & Insurance (151) Other Direct Operating Expenses (538) Net Operating Income (NOI) 3,715 Property Management Fees (112) Net Other Expenses (160) EBITDA 3,443 Cash Taxes (Net of Refunds) (546) Working Capital chan
Slide 29: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth Fixed Cost Debt forms ~36% of borrowings, strategic shift to benefit from favorable interest rates 15.8 % 6.7 % p.a. CRISIL : CCR AAA/Stable(1) Cost of Debt 5.8 years Low Net Debt to Market ICRA : ICRA AAA (Stable)(1) Value (2) reduced fro
Slide 30: Price Performance and Unitholding
Price Performance and Unitholding mindspacereit.com 30
Slide 31: Price Performance & Movement
Price Performance & Movement (1)(2) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 300 250 (Nifty Realty: +138.8%) 200 (Nifty : + 54.8%) 150 100 (Mindspace REIT: +19.0%) 50 07-Aug-20 07-Nov-20 07-Feb-21 07-May-21 07-Aug-21 07-Nov-21 31-Dec 21 Mindspace RE
Slide 32: Unitholding Pattern as on Dec 2021
Unitholding Pattern as on 31 Dec 2021 Unitholding Summary 593 Mn units Insurance MF NIIs AIFs 1.1% 0.2% 9.2% (Market Cap : INR 182 Bn) (1) 0.7% NPS FIIs 0.04% 13.4% Sponsors & Sponsor Public DIIs Group (Others) 3.0% 593 Mn 63% 37% Outstanding Units Blackstone 9.2% Current Marquee Investors Post 31 D
Slide 33: Market Overview
Market Overview mindspacereit.com 33
Slide 34: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock CY2021 Thane Worli-Lower ▪ Corporates to execute their “Return to Office” strategies in a 10.2% Parel phased manner 11.3% ▪ Leasing activity to be driven by trends in swing spaces, Others * execution of stalled expansion, relocation and consolidation 17
Slide 35: Hyderabad Key Updates
Hyderabad Grade-A Office Stock CY2021 New supply, net absorption and vacancy trend analysis (1) Micro-Markets : Madhapur 8.00 7.4 7.5 12.00% Madhapur 64.0% 7.00 Others 10.0%10.00% 4.7% 2.3% 6.00 4.7 8.00% 5.00 4.5 3.8 4.0 Stock Peripheral 4.00 3.7 3.6 6.6% 6.00% 77 msf East 3.00 2.8 2.7% 4.00% 1.8 2
Slide 36: Pune Key Updates
Pune Grade-A Office Stock CY2021 New supply, net absorption and vacancy trend analysis Micro-Market: SBD East Others* 11.0% 3.0 7.0% 2.6 PBD West 2.4 5.9% 2.1 5.1% 6.0% 5.6% 2.5 22.2% 1.9 5.0% 2.0 1.5 1.3 4.0% 1.2 1.5 Stock 1.1 0.9 3.0% 2.3% 58 msf 3.5% 0.7 1.0 2.0% SBD East (1) 0.5 SBD West 1.0% 12
Slide 37: Chennai Key Updates
Chennai Grade-A Office Stock CY2021 New 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) 10.0% South-West 1.40 8.6% 24.3% 1.20 7.1% 4.6% 8.0% 0.6 0.9 1.00 0.8 6.0% Stock 0.80 0.6 2.1% 55 msf 0.60 0.4 0.4 4.0% 0.40 0.4 0.3 2.0% Per
Slide 38: Value Creation via ESG
Value Creation via ESG mindspacereit.com 38
Slide 39: Key Achievements and Awards
Key Achievements and Awards Awarded 7 ‘Sword of Honour’ across 5 parks 36 Five Star rating across 4 parks Green COVID 19 Assurance Statement Buildings for 6 parks Commercial Project of the year - By Realty Conclave Gera Commerzone Kharadi >18.7 msf CREDAI’s – Total “Green CREATE Awards 2021 Building
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: 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 43: Annexures
Annexures 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 24.2 msf of Completed area with Committed Occupancy of 84.6% & WALE of 6.9 years Total Leasable Completed UC/Future Committed WALE In-place Occupancy Asset Area Area Area Occupancy on area Rent (%) (msf) (msf) (msf) (%) (years) (INR psf) Mindspace Airoli East 6.8 4.7 2.1 85.8% 86.8
Slide 46: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q4 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 as on 31 Dec 21
Balance Sheet as on 31 Dec 21 Balance Sheet (INR Mn) 30 Sep 21 31 Dec 21 Notes Sources of Funds 1) Debt is prior to minority interest Total Equity 167,792 166,313 adjustment Sub-Total 167,792 166,313 2) Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Liabilities Mone
Slide 48: Debt Maturity Schedule as on 31 Dec 21
Debt Maturity Schedule as on 31 Dec 21 Principal Repayment Interest Wt. Avg. Description Fixed/ Total Undrawn Principal Rate Maturity Q4 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 (Tranche 1) Fixed 5,000 - 5,000 6.6%
Slide 49: De-risked Portfolio with ~92% Completed Assets
De-risked Portfolio with ~92% Completed Assets Project wise Market Value breakup (1) Completed Assets form ~92% of the Market Value (1) U/C & Total % of Complet Future Asset Value Total Under ed Dev. Completed (INR Mn) (%) Construction (INR Mn) (INR Mn) 92% 4% Mindspace Airoli East 41,823 1,919 43,7
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 (1) • Terrace Floor Completed • Expected completion: Phase 1 – OC rece
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 — Q3 FY2022 Earnings Presentation on 6ix