Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q4 FY2022 Earnings Presentation
51 slides from Brookfield India Real Estate Trust's earnings presentation, May 18, 2022
Slide 1: Q4 FY2022 Investor Update
Brookfield India Real Estate Trust Q 4 F Y 2 0 2 2 – I N V E S T O R U P D AT E M AY 1 8 , 2 0 2 2 CANDOR TECHSPACE G2, GURUGRAM
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 first and only 100% institutionally managed REIT, owning 18.6 MSF of class A office properties Delhi NCR (11.3 MSF) 18.6 MSF 14.1 MSF Gurugram 3.9 0.1 TOTAL AREA OPERATING AREA Noida 5.6 1.8 Total 9.4 1.9 87% Rs 63 PSF 67% EFFECTIVE ECONOMIC IN-PLACE RENT O
Slide 4: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities Largest Office SEZ in CBD Gurugram Largest Office SEZ in Noida CANDOR TECHSPACE, SECTOR 21, GURUGRAM (G2) CANDOR TECHSPACE, SECTOR 135, NOIDA (N2) 4.0 MSF | 29 ACRES 4.5 MSF | 30 ACRES Mumbai’s only Private SEZ located in Powai Largest Office SEZ in Eastern
Slide 5: FY2022 – Full Year Scorecard
FY2022 – Full Year Scorecard We have executed on our stated strategy, delivering high total returns to our unitholders Metric Performance 1 Stable Yield Rs 22.10 DPU / 8.0% Yield(1) 2 High Total Returns 24% Total Return Since IPO(2) 3 Value Appreciation 7.3% NAV Growth Since IPO 4 Leasing Success 1.
Slide 6: Leasing Success
Leasing Success Our properties crossed their pre-COVID run rate on new leasing by attracting relocation and consolidation demand NEW LEASING (MSF)(1) FY22 NEW LEASING BREAKDOWN Qualcomm 23% 1.1 1.2 1.2 MSF (Anthem Group) ERGO 77% PENTAIR 0.1 XPO Logistics FY16 - 20 FY21 FY22 (Average) New Tenants Ex
Slide 7: Significant Organic Growth Potential
Significant Organic Growth Potential Our Net Operating Income can increase by 20-25% through lease-up and margin recovery NOI GROWTH POTENTIAL (MILLIONS) +23% Rs 658 Rs 10,900 Rs 1,400 Rs 765 Rs 8,842 Rs 462 Rs 7,615 Q4 FY22 Adjustment for Income Current NOI Vacant Area Margin Stabilized NOI N2 Acqu
Slide 8: Attractive Inorganic Growth Prospects
Attractive Inorganic Growth Prospects Acquisition pipeline of 6.4 MSF of operating class-A properties, which will further increase scale and operating income One of the largest high quality office campuses in Gurugram Prime office and high street retail portfolio in a 250-acre integrated township CA
Slide 9: Q4 FY22 | Business Highlights
Q4 FY22 | Business Highlights We witnessed strong leasing demand across our assets this quarter with 333,000 SF of gross leasing 99.6% ~14% • Collections of operating lease rentals remained robust at 99.6% Collections Operating Lease Avg. Escalation on 0.6 Rentals Collected MSF area(1) • 14% average
Slide 10: Q4 FY22 | Financial Highlights
Q4 FY22 | Financial Highlights There has been a 40% increase in operating income on account of the N2 acquisition Q4 FY22 Q4 FY21 • 21.7% YoY increase (28.7% on current run rate(1) basis) Operating Lease o Rs 355 million (23.4%) increase due to addition of N2 to the Rentals (OLR) Rs 1,852 Rs 1,521 R
Slide 11: Q4 FY22 | Distributions
Q4 FY22 | Distributions We are distributing Rs 5.10 per unit which is 2% higher than our guidance DISTRIBUTION PER UNIT COMPONENTS Rs 5.10 DISTRIBUTION PER UNIT (DPU) Rs 2.15 , 42% Rs 0.02 , 1% Rs 22.10 TOTAL DPU SINCE IPO MAY 26, 2022 RECORD DATE Rs 0.07 , 1% By JUN 2, 2022 Rs 2.86 , 56% PAYOUT DAT
Slide 12: Key Ongoing ESG Initiatives
Key Ongoing ESG Initiatives Through continuous improvements we ensure efficient, resilient future-fit assets that support the needs of our tenants and communities ENERGY 100% CLEAN Kensington, Powai the only private IT/ITES SEZ in Mumbai is now operating with 100% Green Power sourced from Tata COMMO
Slide 13: Market Updates
Market Updates CANDOR TECHSPACE N2, NOIDA
Slide 14: Demand Recovery in Motion
Demand Recovery in Motion Leasing momentum has accelerated with CY22 space take-up forecasted to exceed pre- COVID levels PAN INDIA NET ABSORPTION (MSF) 41 39 36 31 19 30 16 6 CY16 - CY19 Avg CY20 CY21 CY22E (1) CY23E CY24E ~40% 76% 37.6 MSF Headcount growth at large IT players(2) Employees showing
Slide 15: Demand Recovery in Motion (Cont’d.)
Demand Recovery in Motion (Cont’d.) NET ABSORPTION IN OUR MARKETS (MSF) KEY THEMES IN DEMAND RECOVERY • Relocation: ‒ Samsung relocated from a standalone asset to our 15 campus-style office park in Noida (N2) 14 13 ‒ Leased 377K SF at a significant premium (~40%) over their previous location • Expan
Slide 16: Supply Dynamics Continue to be Highly Favorable
Supply Dynamics Continue to be Highly Favorable Our micro-markets represent 13% of office stock today but only 7% (c.11.2 MSF) of next 3- year supply INDIA OFFICE - STOCK (MARCH 31, 2022) INDIA OFFICE – NEXT 3 YEAR SUPPLY TOTAL = 566 MSF TOTAL = 155 MSF Direct Micromarket, Direct Micro- Non-REIT 13%
Slide 17: Business & Financial Updates
Business & Financial Updates KENSINGTON, POWAI, MUMBAI
Slide 18: Significantly Complete and Stable Portfolio
Significantly Complete and Stable Portfolio 93% of gross asset value is in operating properties, with an Effective Economic Occupancy of 87% and a long-dated WALE of 7.1 years Area ( in MSF) Leased Area Metrics In-place Asset Dev. Area # Office Committed / WALE Asset Operating Total Rent Value(2) Po
Slide 19: New Leasing and Renewals
New Leasing and Renewals Gross leasing of 333,000 SF during the quarter with a robust near-term pipeline SELECT NEW LEASES / RENEWALS(1) Tenant / Industry Industry Assets Ergo Financial Services Kensington Rs 79 PSF Legato Healthcare G2 AVERAGE RENT ON NEW LEASING(2) Consilio Consulting G2 DLT Labs
Slide 20: New Leasing and Renewals (Cont’d.)
New Leasing and Renewals (Cont’d.) Portfolio has a well staggered lease expiry profile and provides an opportunity to capture an attractive mark-to-market spread KEY HIGHLIGHTS LEASE EXPIRY SCHEDULE Area Expiring (MSF) Renewed Cumulative Expiry (% of Rentals) • Expiries: 188,000 SF area vacated duri
Slide 21: Deep Rooted Tenant Relationships
Deep Rooted Tenant Relationships Technology-led, high credit quality tenant roster, with an established track record of tenant expansion SECTOR DIVERSIFICATION OF TENANTS TOP 10 TENANTS BY LEASED AREA % Leased Growth since Tenant # Parks Area Mar 15(1) Others, 9% Healthcare, Technology, 51% TCS 3 14
Slide 22: Property Income | Walkdown
Property Income | Walkdown MILLIONS Q4 FY22 Q4 FY21 KEY DRIVERS • Rs 355 million (23.4%) increase due to addition of N2 to the Income from Operating Lease Rs 1,852 Rs 1,521 REIT offset by Rs 25 million (1.6%) decrease primarily due to Rentals (OLR) vacancies • Rs 150 million (35.5%) increase due to
Slide 23: NDCF | Walkdown
NDCF | Walkdown Millions Stub FY21 + Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Stub FY21 + FY22 Income from Operating Lease Rentals Rs 2,559 Rs 1,561 Rs 1,447 Rs 1,852 Rs 7,419 CAM / Other Revenue 941 556 504 657 2,658 Revenue from Operations Rs 3,500 Rs 2,117 Rs 1,951 Rs 2,509 Rs 10,077 CAM / Other Direct Ex
Slide 24: NDCF | Walkdown (Cont’d.)
NDCF | Walkdown (Cont’d.) Millions Stub FY21 + Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Stub FY21 + FY22 NDCF (SPV Level)(1) Rs 1,934 Rs 1,368 Rs 1,450 Rs 15,460 Rs 20,211 Interest on Shareholder Debt 1,529 1,315 957 839 4,640 Dividends 150 30 27 15 222 Repayment of Shareholder Debt 297 605 484 14,784 16,170
Slide 25: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet MILLIONS MARCH 31, 2022 Liabilities and Equity Total Equity Rs 88,821 Borrowings(1) 51,655 Security Deposits 4,646 Other Liabilities 2,736 Total Rs 147,858 Assets Investment Property Rs 134,420 Investment Proper
Slide 26: Capital Structure and Liquidity
Capital Structure and Liquidity Simple capital structure, low-cost asset level debt and significant debt headroom will continue to be our strengths HEADROOM IN LTV 49% Rs 52.0B Rs 2.9B GROSS DEBT UNDRAWN COMMITTED FACILITY 32% 6.76% AAA Stable AVERAGE INTEREST RATE(1) CRISIL Brookfield REIT Regulato
Slide 27: Inorganic Growth Pipeline
Inorganic Growth Pipeline POWAI BUSINESS DISTRICT, MUMBAI
Slide 28: Brookfield Group’s Footprint in India
Brookfield Group’s Footprint in India Brookfield Group owns a high quality pan-India office portfolio spanning 29 MSF POWAI BUSINESS DISTRICT, MUMBAI ECOWORLD, BANGALORE CANDOR G1, GURUGRAM EQUINOX, MUMBAI ECOSPACE, BANGALORE CATEGORY IDENTIFIED ASSET ROFO PROPERTIES OTHER BROOKFIELD ASSETS Total Ar
Slide 29: Identified Asset | Candor Techspace G1
Identified Asset | Candor Techspace G1 Our identified pipeline asset in Gurugram (G1) is 100% complete, has received strong leasing traction during the year and is fast approaching stabilization One of the largest high quality office campuses in Gurugram 3.7 MSF 77% RS 71 PSF 333,000 SF LEASABLE ARE
Slide 30: Identified Asset | Candor Techspace G1 (Cont’d.)
Identified Asset | Candor Techspace G1 (Cont’d.) Recently completed tower in the property is now 34% leased and has 432,000 SF of ongoing discussions Stable Recent Total Towers Completions(1) Total Area 2.9 MSF 0.8 MSF 3.7 MSF Committed Occupancy 89% 34% 77% WALE 7.5 Yrs. 9.3 Yrs. 7.7 Yrs. In-place
Slide 31: Identified Asset | Candor Techspace G1 (Cont’d.)
Identified Asset | Candor Techspace G1 (Cont’d.) Candor Techspace G1 has consistently maintained high Committed Occupancy while adding 2.7 MSF of new area since 2015 Operating Area (MSF) Committed Occupancy Same Store Occupancy(1) 2.1 MSF New leasing 7.0 100% since April 1, 2015 100% 100% 97% 90% 93
Slide 32: ROFO Properties | Powai Business District
ROFO Properties | Powai Business District The Sponsor Group has intimated us that they have initiated a carve out of the rent generating assets totaling 2.7 MSF in Powai Business District Prime office and high street retail properties in Mumbai 2.7 MSF 87% RS 158 PSF 269,000 SF LEASABLE AREA COMMITT
Slide 33: ROFO Properties | Powai Business District (Cont’d.)
ROFO Properties | Powai Business District (Cont’d.) Stabilized portfolio of high-quality properties in one of Mumbai’s most prime business districts Central South Orchard Total Avenue Avenue Avenue Total Area 1.2 MSF 1.0 MSF 0.4 MSF 2.7 MSF Committed Occupancy(1) 90% 78% 99% 87% WALE 3.2 Yrs. 5.0 Yr
Slide 34: ROFO Properties | Powai Business District (Cont’d.)
ROFO Properties | Powai Business District (Cont’d.) Under Brookfield Group’s ownership and management, the portfolio has maintained high occupancy levels while achieving a strong rent CAGR(1) Committed Occupancy In-place Rent (Rs PSF PM) 0.9 MSF New leasing 200% 160 since April 1, 2017 180% 158 140
Slide 35: Environment, Social & Governance Updates
Environment , Social & Governance Updates CANDOR TECHSPACE N1, NOIDA
Slide 36: Our ESG Strategy
Our ESG Strategy Committed to industry-leading sustainable development to deliver long-term value to our business, partners and communities OUR GUIDING PRINCIPLES OUR DECARBONIZATION COMMITMENT Mitigate the impact of our operations on the environment Committed to NET ZERO Be good stewards in the com
Slide 37: 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 2050 or sooner GREENHOUSE GAS EMISSIONS (‘000 Mt CO2e) ENERGY CONSUMPTION (MILLION UNITS)(1) Scope 2 Scope 1 17 2 1 1 127 123 99 85 76 75 62 61 FY19 FY
Slide 38: ESG Accolades
ESG Accolades We continue to receive recognition for our ESG efforts across our portfolio RATED ISO 9001, ISO RATED ISO 50001 PLATINUM RATINGS BY 14001 AND ISO 45001 BY BY TUV SUD(2) IGBC(3) TUV SUD(1) 5S GOLD RATINGS BY SWORD OF HONOUR FOR SAFEGUARD LABEL CII(1) SAFETY BY BSC(4) HEALTH AND HYGIENE
Slide 39: Information Supplement
Information Supplement CANDOR TECHSPACE N2, NOIDA
Slide 40: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule In-place rent at Expiry (Rs Year / Asset Area Expiring (‘000 SF) % of Gross Rentals(1) PSF)(1) FY23E Kensington 478 39% Rs 112 G2 188 7% 88 N1 64 6% 73 N2 114 4% 52 K1 156 5% 47 Total – REIT 1,001 12% Rs 91 FY24E Kensington 707 45% Rs 87 G2 6 0% - N1 233 13% 40 N2 76 3
Slide 41: FY22: Occupancy Bridge
FY22: Occupancy Bridge ASSET MARCH 31, 2021 MARCH 31, 2022 OPERATING LEASED COMMITTED NEW GROSS OPERATING LEASED COMMITTED AREAS IN ‘000 SF RENEWALS AREA AREA OCCUPANCY LEASING EXPIRIES AREA AREA OCCUPANCY Kensington 1,544 1,335 86% 145 (72) - 1,558 1,409 90% G2 3,856 3,554 92% 306 (662) 32 3,877 3,
Slide 42: Q4 FY22: Occupancy Bridge
Q4 FY22: Occupancy Bridge ASSET DECEMBER 31, 2021 MARCH 31, 2022 OPERATING LEASED COMMITTED NEW GROSS OPERATING LEASED COMMITTED AREAS IN ‘000 SF RENEWALS AREA AREA OCCUPANCY LEASING EXPIRIES AREA AREA OCCUPANCY Kensington 1,547 1,353 87% 56 (0) - 1,558 1,409 90% G2 3,875 3,144 81% 94 (11) 4 3,877 3
Slide 43: FY22: Re-leasing Spread
FY22: Re-leasing Spread ASSET SPREAD ON NEW LEASING SPREAD ON RENEWALS TOTAL RE-LEASING AREAS IN ‘000 SF AREA SPREAD(1) AREA SPREAD(1) AREA SPREAD(1) Kensington 145 52% - - 145 52% G2 306 (5%) 32 (16%) 338 (6%) N1 72 45% 58 30% 129 40% K1 - - 293 0% 293 0% Initial Portfolio 523 15% 382 1% 905 11% N2
Slide 44: Q4 FY22: Re-leasing Spread
Q4 FY22: Re-leasing Spread ASSET SPREAD ON NEW LEASING SPREAD ON RENEWALS TOTAL RE-LEASING AREAS IN ‘000 SF AREA SPREAD(1) AREA SPREAD(1) AREA SPREAD(1) Kensington 56 48% - - 56 48% G2 95 4% 4 - 99 4% N1 60 65% 23 27% 83 54% K1 - - 0 - 0 - Initial Portfolio 210 28% 27 27% 237 27% N2 - - 23 - 23 - RE
Slide 45: Property Income | Walkdown
Property Income | Walkdown MILLIONS FY22 FY21 KEY DRIVERS • Rs 355 million (5.8%) increase due to addition of N2 to the REIT Income from Operating Lease Rs 6,476 Rs 6,100 • Rs 20 million (0.3%) increase primarily due to contractual Rentals (OLR) escalations and new leasing offset by vacancies • Rs 1
Slide 46: Property Income | Consolidation Details
Property Income | Consolidation Details INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) FY22 FY21 FY22 FY21 FY22 % OLR FY21 % OLR Kensington Rs 1,672 Rs 1,464 Rs 1,789 Rs 1,592 Rs 1,505 90% Rs 1,333 91% G2 2,294 2,518 3,222 3,657 2,359 103% 2,
Slide 47: Property Income | Consolidation Details
Property Income | Consolidation Details INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) Q4 FY22 Q4 FY21 Q4 FY22 Q4 FY21 Q4 FY22 % OLR Q4 FY21 % OLR Kensington Rs 423 Rs 373 Rs 455 Rs 376 Rs 360 85% Rs 302 81% G2 534 621 766 795 524 98% 608 98%
Slide 48: Ongoing Capex and Upgrades
Ongoing Capex and Upgrades Rs 3,107 million of capex projects underway across new tower developments and upgrades to existing towers. Capex including interest during construction to be financed through debt ESTIMATED PENDING COSTS ONGOING PROJECTS(1) COMPLETION DATE (MILLIONS) Asset Upgrades/Tenant
Slide 49: Research Coverage
Research Coverage RESEARCH HOUSE ANALYST EMAIL ID Ambit Karan Khanna Karan.Khanna@ambit.co Bank of America Kunal Tayal Kunal.Tayal@bofa.com HSBC Bank Puneet Gulati PuneetGulati@hsbc.co.in ICICI Securities Adhidev Chattopadhyay Adhidev.Chattopadhyay@icicisecurities.com IIFL Mohit Agarwal Mohit.Agrawa
Slide 50: Glossary (1/2)
Glossary (1/2) Gross Asset Value / Asset Value The market value as determined by the Valuer as of March 31, 2022 (Occupied Area + Completed Area under Letters of Intent) Committed Occupancy In % Completed Area Represents Committed Occupancy for areas where the occupancy certificate was received on S
Slide 51: Glossary (2/2)
Glossary (2/2) Revenue from leasing of premises including Warm Shell rent, fit-out rent and car parking Operating Lease Rentals (OLR) Income Net Operating Income calculated by subtracting Direct Operating Expenses from Revenue Net Operating Income (NOI) from Operations Includes the NOI for the Initi
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