Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q3 FY2023 Earnings Presentation
51 slides from Mindspace Business Parks Reit's earnings presentation, Jan 30, 2023
Slide 1: Q3 FY23 Results Presentation
Q3 FY23 Results Presentation 30th January 2023 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 Update 18 Financial Update 24 Price Performance & Unitholding 29 Market Updates 32 Value Creation via ESG 37 Annexures 41 Note: 1. For ease and simplicity of representation, certain figures may have been rounded 2. Mindspace Business Pa
Slide 4: Key Updates
01 Key Updates mindspacereit.com 4
Slide 5: Mindspace REIT – At a Glance (9M FY23)
Mindspace REIT – At a Glance (9M FY23) 1 Operating Highlights 3.5 msf 2.0 msf 1.5 msf 26.6 % 64 1.3 (1)(2) (2) (1) INR psf/month Average msf New and Vacant Area Re-leased Area Re-leasing Spread (3) Gross Leasing Rent achieved New Area Completed Leased on 2.3 msf on Gross Leasing 2 Financial Highligh
Slide 6: Key Highlights - Q3 FY23
Key Highlights - Q3 FY23 1 Operating Highlights New & Vacant Gross Leasing 1.3 msf (1)(2) Area Leased 0.7 msf Average Rent achieved on Gross Leasing INR 67 psf month Re-leased 0.6 msf (1) Releasing Spread (3) 24.9% on 1.0 msf New Area Completed 0.6 msf 2 Financial Highlights Weighted NOI(3)(4) INR 4
Slide 7: Leasing Overview – 9M FY23
Leasing Overview – 9M FY23 3.5 msf leased across 60 tenants and achieved 26.6% Re-leasing spread on 2.3 msf 3.46 msf (1)(2) INR 64 psf/month 26.6% 9M FY23 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(3) 9M FY23 - Split Basis Type of Tenants Leased to 1.52 msf (4) Area Re-leas
Slide 8: Leasing Overview – Q3 FY23
Leasing Overview – Q3 FY23 1.3 msf leases signed across 17 tenants and achieved 24.9%(1) re-leasing spread on 1.0 msf(1) 1.32 msf(2)(4) INR 67 psf/month 24.9 % Q3 FY23 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q3 FY23 – Gross leasing Area Re-leased (3) 0.63 msf Leased A
Slide 9: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance NOI Growth aided by Sustained Strong Leasing Growth Growth (in INR Mn) Q3 FY22 Q2 FY23 Q3 FY23 9M FY22 9M FY23 (y-o-y) (4) (y-o-y) (4) Revenue from 4,419 4,974(2) 5,440(2) 18.9% 12,875 15,325(2) 17.6% Operations (1) NOI (1) 3,737 4,172(3) 4,551(3) 16.8% 10
Slide 10: Distribution for Q3 FY23
Distribution for Q3 FY23 Over 90% distributions are in the form of tax-exempt dividends Key Dates Distribution Yield (1) 6.9% Period Oct 22 to Dec 22 Distribution Amount INR 2,846 Mn Outstanding Units 593,018,182 Declaration Date 30 Jan 23 Interest ₹0.43 Record Date 06 Feb 23 9.0% Distribution per u
Slide 11: Portfolio Overview
02 Portfolio Overview mindspacereit.com 11
Slide 12: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 32.0 msf INR 64.5 psf Total Leasable Area (1) In-place Rent 88.5% 88.3% Same Store Committed Committed Occupancy Occupancy on 24.3 msf on 25.6 msf ` Mumbai Region Hyderabad 10.4% 7.0 years 12.9 msf (40.4 %) 12
Slide 13: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 11.8 msf Mumbai Region | 6.8 msf Completed Area: 9.9 msf; Committed Occupancy: 94.5% Completed Area: 4.7 msf; Committed Occupancy: 88.3% 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 | 0.9 msf (1) Mumbai Region | 0.7 msf Completed Area: 0.9 msf; Committed Occupancy: 93.5% Completed Area: 0.7 msf; Committed Occupancy: 94.8% 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 Technology Financial Services Financial Services Diversified Diversified Accenture Wipro Barclays BNY Mellon Amazon Qualcomm Cognizant IBM Thryve UBS Fiserv Allstate Worley Parsons L&T AMD Nvidia B.A. Continuum Axis
Slide 16: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 34.9% (Dec 22) vs. 36.4% (Sep 22) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (34.9%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks Accentu
Slide 17: Lease Expiry Profile
Lease Expiry Profile Only 4-5% of portfolio is coming up for expiry each year over next 2 years 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 19) msf Rent at Expiry (INR psf) 6
Slide 18: Projects Updates
03 Projects Updates mindspacereit.com 18
Slide 19: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Mumbai Region Pune Mumbai Region Mindspace Airoli West Commerzone Kharadi Mindspace Airoli West (B9) (B5) (Data Center) ▪ Leasable area: 1.1 msf ▪ Leasable area: 0.7 msf ▪ Leasable area: 0.3 msf ▪ Status: Façade, Entrance and ▪ Status: Façade, Entrance Lobby ▪ Sta
Slide 20: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Pune Hyderabad Mumbai Region Perspective Commerzone Kharadi Mindspace Madhapur Mindspace Airoli East (B4) (1A-1B Re-development) (High Street Retail and F&B ) ▪ Leasable area: 1.0 msf ▪ Leasable area: 1.3 msf ▪ Leasable area: 0.05 msf ▪ Status: P4 level - Work in
Slide 21: Expanding the Footprint - Proposed Re-development at Madhapur
Expanding the Footprint - Proposed Re-development at Madhapur(1) 0.36 msf Potential Leasable area ~4.4x 1.61 msf Current Perspective Estimated Completion Q3 FY27 Building 8 Building 7 Opportunity to Offers expansion and Strategic Location Value accretive develop a new age consolidation spaces within
Slide 22: Acquisition Update – The Square Avenue 98 (BKC Annex)
Acquisition Update – The Square Avenue 98 (BKC Annex) Shareholders of Sundew RE(1) have expressed their interest to sell 100% equity shares to Mindspace REIT Project Details Project Images Building 2B + G + 8 configuration Leasable Area 155,150 sf Leasing Status 100% leased Tenant Global Financial I
Slide 23: ROFO Update - Commerzone Raidurg
ROFO Update - Commerzone Raidurg(1) Project Images Project Details Total land area 9.07 acres Land ownership Freehold Leasable Area 1.82 msf 2 B + 2 Stilt + 1 G + 20 Configuration office floors Completion Occupancy certificate Status received (2) Fit-out status Tenant fit-out in progress Potential a
Slide 24: Financial Updates
04 Financial Updates mindspacereit.com 24
Slide 25: Key Financial Metrics
Key Financial Metrics Delivered consistent growth on key financial metrics Revenue (INR mn) (1) NOI (INR mn) (1) (2) (2) 4,551 5,440 4,172 4,916 4,974 3,997 4,014 4,703 3,737 4,419 3,618 3,595 4,218 4,237 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23 Q2 FY23 Q3 FY23 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23
Slide 26: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 48,739 Mn 17.6 % INR 4,038 Mn 7.5 % 5.4 years Net Debt to Undrawn Committed Cost of Debt Net Debt Market Value (1) Wt. Avg. Maturity Facilities (p.a.) Well staggered maturity profile with 13.6% maturity by FY24 Diversified debt book wi
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 Q3 FY22 Q3 FY23 9M FY23 Q3 FY22 Q3 FY23 9M FY23 Q3 FY23 Mindspace Airoli (E) 881 945 2,805 711 717 2,118 16% Mindspace Airoli (W) 553 681 1,871 426 497 1,333 11% Mindspace
Slide 28: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q3 FY23 (1) Revenue from Operations 5,603 Property Taxes & Insurance (169) Other Direct Operating Expenses (883) Net Operating Income (NOI) 4,551 Property Management Fees (133) Net Other Expenses (253) EBITDA(1) 4,165 Cash Taxes (Net of Refunds) (471) Working Capit
Slide 29: Price Performance & Unitholding
05 Price Performance & Unitholding mindspacereit.com 29
Slide 30: Price / Volume Performance & Movement
Price / Volume Performance & Movement (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 (Nifty : +61.5%) (Mindspace REIT: +21.6%) (FTSE : +13.6%) (MSCI : +12.5%) Dec-22 Offer Price INR 275 p.u. Price on listing date INR 304 p.u. 6.9% Distribution yield (
Slide 31: Unitholding Pattern as on 31 Dec 2022
Unitholding Pattern as on 31 Dec 2022 Unitholding Summary INR 19,825 Cr 37 % Market Cap (1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 198 Bn) (1) MF NIIs 10.0% NPS Insurance 0.1% 0.1% 1.2% Sponsors & Sponsor Public AIFs Group (Others) 0.7% FIIs 63% 37% 21.5% 49,437 Total Unith
Slide 32: Market Updates
06 Market Updates mindspacereit.com 32
Slide 33: Mumbai Region Key Updates
Mumbai Region Key Updates Grade-A Office Stock CY2022 Worli-Lower ▪ Micro-markets like BKC & Annex, Thane Belapur Road, and Thane 9.9% Parel Malad-Goregaon witnessed strong net absorption during 12.8% 2022 which led to overall reduction in vacancy Others ▪ Rentals in select good quality Grade A deve
Slide 34: Hyderabad Key Updates
Hyderabad Grade-A Office Stock CY2022 Supply, net absorption and vacancy trend analysis Micro-Markets: Madhapur Supply Net Absorption Vacancy Madhapur 62.6% Others 8.0 7.4 7.5 12.0% 11.4% 10.0% 2.0% 7.0 6.2 10.0% 6.0 6.6% Stock Peripheral 5.0 4.5 4.7 5.0 8.0% 88.9 msf East 4.0 3.7 3.8 4.0 3.6 6.0% 3
Slide 35: Pune Key Updates
Pune Grade-A Office Stock CY2022 Supply, net absorption and vacancy trend analysis Micro-Market(1): SBD East Others 10.5% Supply Net Absorption Vacancy PBD West 3.0 9.0% 23.9% 8.0% 2.6 8.1% 8.0% 2.4 2.3 2.5 2.1 7.0% 5.1% 5.9% 1.9 5.6% Stock 2.0 6.0% 1.6 1.6 1.5 5.0% 64.6 msf 1.5 1.3 3.5% 1.2 1.3 1.1
Slide 36: Chennai Key Updates
Chennai Grade-A Office Stock CY2022 Supply, net absorption and vacancy trend analysis Micro-Market(1): South-West Others Supply Net Absorption Vacancy 22.6% (1) 3.0 18.0% 2.6 South-West 16.2% 16.0% 26.5% 2.5 11.0% 14.0% Stock 2.0 12.0% 1.6 8.6% 1.5 10.0% 59.9 msf 1.5 7.1% 8.0% 4.6% 1.0 0.8 0.9 6.0%
Slide 37: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 37
Slide 38: Key Achievements and Awards
Key Achievements and Awards Awarded British Safety Council's 49 Green Buildings prestigious 9 ‘Sword of Honour’ (2 new buildings recd. across 7 parks O&M LEED Platinum) Construction Week Awards 2022 Real Estate Company of the Year (West) Mindspace Business Parks REIT CREDAI’s – >23.2 msf Awards CREA
Slide 39: Our Commitment to Build an ESG Centric Ecosystem
Our Commitment to Build an ESG Centric Ecosystem India’s first real estate entity to Signatory of EV100 Initiative Value creation for tenants join RE100 initiative through engagement activities Durgam Cheruvu Lake Added additional floor in Great place to work Makeover, Hyderabad Govt Hospital for CO
Slide 40: 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 41: Annexure
08 Annexure mindspacereit.com 41
Slide 42: 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 43: Portfolio Summary
Portfolio Summary 25.6 msf of Completed area with Committed Occupancy of 88.3% & WALE of 7.0 years 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 6.8 4.7 2.1 88.3% 88.3
Slide 44: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q4 FY23 (1) FY24 FY25 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 Airol
Slide 45: Balance Sheet as on 31 Dec 22
Balance Sheet as on 31 Dec 22 Balance Sheet (INR Mn)(1) 30-Sep-22 31-Dec-22 Notes Sources of Funds 1. All numbers are prior to minority Total Equity 1,60,967 1,59,218 adjustment Sub-Total 1,60,967 1,59,218 2. Other Liabilities primarily include Trade Liabilities Payables, Capital Creditors, Retentio
Slide 46: Debt Maturity Schedule as on 31 Dec 22
Debt Maturity Schedule as on 31 Dec 22 Undraw Interest Wt. Avg. Principal Repayment Description Fixed/ Total Principal n Rate Maturity Q4 FY29 & (INR Mn) Floating Facility O/S FY24 FY25 FY26 FY27 FY28 Total Facility (p.a.p.m.) (Years) FY23 Beyond At REIT Level NCD (Tranche 1) Fixed 2,000 - 2,000 6.4
Slide 47: De-risked Portfolio with ~93% Completed Assets
De-risked Portfolio with ~93% Completed Assets Project wise Market Value breakup (1) Completed Assets form ~93% of the Market Value (1) U/C & Total % of Complet Future Asset Value Total ed Dev. Completed Under (INR Mn) (%) Construction (INR Mn) (INR Mn) 93.0% 3.9% Mindspace Airoli East 43,736 1,795
Slide 48: 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 Raidurg identified assets Status: • 1.8 msf pre-leased • Tenant has started fit-out work in the premises • OC received 8.6 msf
Slide 49: Research Houses Covering Mindspace REIT
13 Research Houses Covering Mindspace REIT Research House Analyst Email Id Ambit Capital Karan Khanna karan.khanna@ambit.co Axis Capital Samar Sarda samar.sarda@axiscap.in Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Atul Tiwari atul.tiwari@citi.com Credit Suisse Lokesh Garg lokesh
Slide 50: 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 51: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 51
Mindspace Business Parks REIT — Q3 FY2023 Earnings Presentation on 6ix