Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q2 FY2022 Earnings Presentation
34 slides from Brookfield India Real Estate Trust's earnings presentation, Nov 9, 2021
Slide 1: Q2 FY2022 Investor Update
Brookfield India Real Estate Trust Q 2 F Y 2 0 2 2 – I N V E S T O R U P D AT E NOVEMBER 9, 2021 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 14.0 MSF 10.3 MSF TOTAL AREA COMPLETED AREA Gurugram (4.0 MSF) Noida (2.8 MSF) 3.9 0.1 1.9 0.9 18% 38% 22% 4 85% Kolkata (5.7 MSF) OFFICE PARKS IN SAME-STORE OCCUPANCY(1) 3.1 2.7 GATEWAY MARKETS 22% Mumbai (1
Slide 4: Brookfield India Real Estate Trust (Cont'd.)
Brookfield India Real Estate Trust (Cont’d.) Strong inorganic growth pipeline through Identified Assets and ROFO Properties within the Brookfield Group IDENTIFIED ASSETS ROFO(1) PROPERTIES Gurugram (3.7 MSF) Noida (4.5 MSF) 8.3 MSF 6.7 MSF 3.7 0.1 3.6 0.9 LEASABLE AREA LEASABLE AREA Rs 86B Rs 110B G
Slide 5: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities Our assets have seen an improvement in activity post the COVID-19 second wave, with appropriate safety protocols in place and increasing physical attendance Mumbai’s only Private SEZ located in Powai (a walk-to-work modern township) Largest Office SEZ in CBD
Slide 6: Candor Techspace N2 | Approaching Stabilization
Candor Techspace N2 | Approaching Stabilization Our identified pipeline asset in Noida (N2) has received significant leasing traction and has further ongoing advanced discussions AT IPO CURRENT(1) Operating Area 2.9 3.6 +24% (MSF) Area Leased 2.5 3.0 +20% (MSF) 673,000 SF Recent Completions (Q1 FY22
Slide 7: Key Themes in Demand Recovery
Key Themes in Demand Recovery Focus on “back to office” programs by our tenants coupled with limited supply in our micro- markets will be a key driver of demand for our business parks 1 2 3 Strong Back to Office Favorable Demand- Institutional Trends Supply Dynamics Dominance Increase in physical Ou
Slide 8: Strong Back to Office Trends
1 Strong Back to Office Trends With the advancement of vaccination programs, physical occupancies across the globe are ramping up to pre-covid levels. Most large technology companies are close to fully vaccinating their employees in India and have laid out ‘back to office’ plans BACK TO OFFICE (1) I
Slide 9: Favorable Demand-Supply Dynamics
2 Favorable Demand-Supply Dynamics With absorption expected to outpace supply in the REIT micro-markets over the next two years, our assets are poised to gain in occupancy and rentals STRONG DEMAND OUTLOOK LIMITED FUTURE SUPPLY AVERAGE NET ABOSROPTION IN REIT INDIA OFFICE – NEXT 2 YEAR SUPPLY MICRO-
Slide 10: Institutional Dominance
3 Institutional Dominance Our assets have accounted for more than half of the net absorption in their micro-markets before the pandemic and are well-positioned to benefit from the uptick in the post-pandemic demand for office space REIT VERSUS MICRO-MARKET ABSORPTION(1) (MSF) (FY17 – FY21) 6.1 50%+
Slide 11: Q2 FY22 Business Highlights
Q2 FY22 Business Highlights Our performance continued to be resilient, ending the quarter at 85% Same-store Occupancy(1) and robust collections • Collections of operating lease rentals remained robust at ~99% ~99% ~8% Collections Operating Lease Avg. Escalation on 0.8 • 8% average escalation on 0.8
Slide 12: Q2 FY22 | Financial Highlights
Q2 FY22 | Financial Highlights Stable Operating Lease Rentals year-on-year with growth from contractual escalations moderating the impact of lower occupancy OPERATING LEASE RENTALS NET OPERATING INCOME NDCF AND DPU GUIDANCE(1) Rs 1,561 Million Rs 1,628 Million Rs 22.00 per unit 0.1% YOY increase 7.8
Slide 13: Q2 FY22 | Distributions
Q2 FY22 | Distributions Board has approved the distribution of Rs 6.00 per unit (93% of NDCF) for Q2 FY22 Millions Q2 FY22 Income from Operating Lease Rentals Rs 1,561 Rs 6.43 Rs 6.00 CAM / Other Revenue 556 NDCF PER UNIT DISTRIBUTION PER UNIT CAM / Other Direct Expenses (489) NOI Rs 1,628 Other Exp
Slide 14: Business Updates
Business Updates KENSINGTON, POWAI, MUMBAI
Slide 15: Significantly Complete and Stable Portfolio
Significantly Complete and Stable Portfolio 93% of gross asset value is in operating properties, which are 85% occupied on a same-store basis(1) with a long-dated WALE of 6.6 years Area ( in MSF) Leased Area Metrics In-place Asset Dev. Area # Office Same-store WALE Asset Operating Total Rent Value(3
Slide 16: 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, TCS 2 18% - 2% Technolog
Slide 17: New Leasing and Renewals
New Leasing and Renewals Gross leasing of 47,000 SF during the quarter with a robust near-term pipeline; Further, 164,000 SF of leases are under execution across our properties SIGNED LEASES / RENEWALS LEASING PIPELINE OPPORTUNITIES ACROSS OUR MARKETS Consolidation, 7% Tenant / Industry Industry Ass
Slide 18: 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: 377,000 SF area vacated duri
Slide 19: Financial Updates
Financial Updates CANDOR TECHSPACE K1, KOLKATA
Slide 20: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet MILLIONS SEPTEMBER 30, 2021 Liabilities and Equity Total Equity Rs 81,620 Borrowings(1) 21,673 Security Deposits 3,514 Other Liabilities 2,174 Total Rs 108,981 Assets Investment Property Rs 99,323 Investment Pro
Slide 21: Capital Structure and Liquidity
Capital Structure and Liquidity Simple leverage, long interest only period and undrawn credit lines provide us with ample liquidity HEADROOM IN LTV Rs 21.9B Rs 2.2B GROSS DEBT UNDRAWN COMMITTED FACILITY 49% 4.4 Years AAA Stable BALANCE INTEREST CREDIT RATING (CRISIL) ONLY PERIOD 19% OPPORTUNITIES •
Slide 22: NDCF | Walkdown
NDCF | Walkdown Millions Stub FY21 + Q1 FY22 Q2 FY22 Stub FY21 + H1 FY22 Income from Operating Lease Rentals Rs 2,559 Rs 1,561 Rs 4,120 CAM / Other Revenue 941 556 1,497 Revenue from Operations Rs 3,500 Rs 2,117 Rs 5,617 CAM / Other Direct Expenses (787) (489) (1,276) NOI Rs 2,713 Rs 1,628 Rs 4,341
Slide 23: Inorganic Growth Pipeline
Inorganic Growth Pipeline CANDOR CANDOR TECHSPACE TECHSPACE G2, GURUGRAM N1, NOIDA
Slide 24: Identified Assets Update
Identified Assets Update Resilient performance with 86% Same-store Occupancy and 99% collections during the quarter ON OCTOBER 31, 2021 G1 N2 ASSET VALUE BY STATUS (% OPERATING) Operating Area (MSF) 3.7 3.6 March 31, 2021(3) Area Leased (MSF) 2.5 3.0 Committed Occupancy 69% 83% Same-store Occupancy(
Slide 25: Brookfield Group's Footprint in India
Brookfield Group’s Footprint in India Brookfield owns a 100% interest in a high quality pan-India office portfolio spanning 33 MSF in total area and 24 MSF of operating area CANDOR G1, GURUGRAM POWAI DISTRICT, MUMBAI ECOWORLD, BANGALORE CANDOR N2, NOIDA EQUINOX, MUMBAI ECOSPACE, BANGALORE CATEGORY I
Slide 26: Appendix
Appendix CANDOR TECHSPACE G2, GURUGRAM
Slide 27: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule Year / Asset Area Expiring (‘000 SF) % of Gross Rentals(1) In-place rent at Expiry (INR PSF)(1) H2 FY22E Kensington - - - G2 279 10% 87 N1 32 2% 44 K1 275 11% 45 Total – REIT 585 7% Rs 65 FY23E Kensington 373 33% Rs 104 G2 90 3% 90 N1 15 2% - K1 76 2% 48 Total – REIT 5
Slide 28: Ongoing Capex and Upgrades
Ongoing Capex and Upgrades Rs 2,671M 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 COMPLETION DATE (MILLIONS) Asset Upgrades/Tenant Improvemen
Slide 29: Property Income | Walkdown
Property Income | Walkdown MILLIONS Q2 FY22 Q2 FY21 KEY DRIVERS Income from Operating Lease • Rs 1 million / 0.1% YOY increase due to contractual Rs 1,561 Rs 1,560 escalations offset by new vacancies Rentals (OLR) • Rs 40 million / 5.0% YOY decrease primarily due to mid-year termination of CIOP’s op
Slide 30: Property Income | Consolidation Details
Property Income | Consolidation Details INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) Q2 FY22 Q2 FY21 Q2 FY22 Q2 FY21 Q2 FY22 % OLR Q2 FY21 % OLR Kensington Rs 415 Rs 366 Rs 441 Rs 408 Rs 379 91% Rs 344 94% G2 605 645 847 1,022 627 104% 762
Slide 31: Indebtedness, Structure and Unitholding
Indebtedness, Structure and Unitholding TOP 5 UNITHOLDERS (SEPTEMBER 30, 2021) UNITHOLDING PATTERN SEPTEMBER 30, 2021 UNIT HOLDER(1) % Non- HDFC Balanced Advantage Fund 5.1% institutions, 18% SBI Life Insurance 3.8% HDFC Life Insurance 1.7% HDFC Limited 1.1% Sponsor Schroder Global Cities Real Estat
Slide 32: 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 33: Glossary (1/2)
Glossary (1/2) Gross Asset Value / Asset Value The market value as determined by the Valuer as of March 31, 2021 (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 34: 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 Net distributable cash flows (
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