Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q4 FY24 Earnings Presentation
71 slides from Mindspace Business Parks Reit's earnings presentation, Apr 30, 2024
Slide 1: Q4 FY24 Investor Presentation
Q4 FY24 Investor Presentation 30th April 2024 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 Highlights : Q4FY24 and FY24 04 Project Updates 11 Financial Updates 14 Our Markets 20 Our Growth Drivers 28 Our Franchise & Portfolio 31 Re-energizing Parks 42 Value Creation via ESG 51 Shareholding Pattern 56 Annexures 58 Note: 1. For ease and simplicity of representation, ce
Slide 4: Key Highlights
01 Key Highlights mindspacereit.com 4
Slide 5: FY24: Solid Performance fuelled by Sustained Demand for Grade-A Assets
FY24: Solid Performance fuelled by Sustained Demand for Grade-A Assets 90.6% Committed Occupancy excl. Pocharam (1) 3.6 msf Gross Leasing during FY24 2.0 msf Highest ever quarterly Gross Leasing in Q4 FY24 since listing 1.2 msf Highest ever quarterly gross leasing in Airoli parks in Q4 FY24 since li
Slide 6: Key Operating Indicators Q4 FY24 FY24
Strong Leasing results in Committed Occupancy levels surpassing 90%(1) Key Operating Indicators Q4 FY24 FY24 Gross Leasing 2.0 msf 3.6 msf Re-leased Area 1.1 msf 2.5 msf New and Vacant Area Leased 0.9 msf 1.1 msf Re-leasing Spread(2) 16.7 % 14.3 % on 1.9 msf on 3.4 msf Average Rent for Area Leased I
Slide 7: Modern and Sustainable workplaces attracting occupiers
Modern and Sustainable workplaces attracting occupiers High Quality Portfolio with 6 out of 9 parks(1) achieving >95% committed occupancy levels 100% 100% 100% 98.0% 96.4% 96.1% Gera The Square The Square Mindspace Mindspace Commerzone Commerzone Nagar Road BKC Malad Madhapur Yerwada Kharadi Pune Q4
Slide 8: Lease Expiry Profile
Lease Expiry Profile ~5 - 8% of the portfolio coming up for expiry each year over next 3 years Track record of achieving Re-leasing spread ~70% releasing visibility for 2.0 msf expiries in FY25 across parks Area Expiry (msf) Area Re-leased (since Apr 20) msf Rent at Expiry Average 21.7% (INR psf) 62
Slide 9: Key Strategic initiatives and Sustainability achievements
Key Strategic initiatives and Sustainability achievements Consolidating ownership through Initiated Redevelopment acquisition of c.3.0 msf 1st Ranked in Asia c. 0.24 msf Leasable area acquired in Commerzone Porur 100/100 c. 42 ksf Development Score Acquisition in Demolition through Commerzone ‘Implo
Slide 10: SEZ reforms and upgrade programs helped fast track leasing
SEZ reforms and upgrade programs helped fast track leasing Building 5 at Mindspace Airoli West Pre-Upgradation Post-Upgradation Upgraded Building Converted to Non- Leased immediately post meeting modern Processing Area (SEZ) conversion demands mindspacereit.com 10
Slide 11: Project Updates
02 Project Updates mindspacereit.com 11
Slide 12: Gearing for Demand Resurgence (1/2)
Gearing for Demand Resurgence (1/2) Pune Mumbai Region Mumbai Region Commerzone Kharadi Mindspace Airoli East Mindspace Airoli West Building 4 Highstreet Building 8- Data center ▪ Leasable area: ~1.0 msf ▪ Leasable area: ~0.05 msf ▪ Leasable area: ~0.3 msf ▪ Status: Structure works completed; ▪ Stat
Slide 13: Gearing for Demand Resurgence (2/2)
Gearing for Demand Resurgence (2/2) Hyderabad Hyderabad Hyderabad Mindspace Madhapur Mindspace Madhapur Mindspace Madhapur (1A-1B Re-development) (Experience Center) (7/8 Re-development) ▪ Leasable area: 1.3 msf ▪ Leasable area: 0.13 msf ▪ Leasable area: 1.6 msf ▪ Status: Foundation and basement ▪ S
Slide 14: Financial Updates
03 Financial Updates mindspacereit.com 14
Slide 15: Key Financial Indicators Q4 FY24 FY24
Financial Performance Supported by Rising Organic Cash Flows Key Financial Indicators Q4 FY24 FY24 Figures in INR Mn Revenue from Operations(1)(2)(4) 5,948 11.0% Y-o-Y 23,512 13.7% Y-o-Y Net Operating Income(1)(3)(4) 4,768 9.3% Y-o-Y 18,959 11.9% Y-o-Y Distribution 2,829 (0.6%) Y-o-Y 11,362 0.3% Y-o
Slide 16: Stable NOI Growth
Stable NOI Growth NOI growth driven primarily by rent commencement from new and vacant area NOI bridge for FY24 INR Mn 11.9% Increase (excl One Offs) (1) Notes: m indspacereit.com 16 1. Includes contractual escalations and downtime during re-leasing, Others primarily include reduction in Works contr
Slide 17: NDCF Build-up : Q4 FY24
NDCF Build-up : Q4 FY24 Particulars (INR Mn) Q4 FY24 Revenue from Operations(1) 6,079 Property Taxes & Insurance (191) Other Direct Operating Expenses (1,120) Net Operating Income (NOI) 4,768 Working Capital includes Property Management Fees (145) Net Fitout Capex Rs 419 Mn Net Other Expenses (131)
Slide 18: NDCF Build-up : FY24
NDCF Build-up : FY24 Particulars (INR Mn) FY24 Revenue from Operations(1) 24,113 Property Taxes & Insurance (774) Other Direct Operating Expenses (4,380) Net Operating Income (NOI) 18,959 Working Capital includes Property Management Fees (535) Net Fitout Capex Rs 1,277 Net Other Expenses (532) Mn an
Slide 19: De-risked Portfolio with 91.0% Completed Assets (by Value)
De-risked Portfolio with 91.0% Completed Assets (by Value) Statement of Net Assets at Fair Value Movement of NAV (INR p.u.) (INR Mn) Sr. No. Particulars 31 Mar 24 A Fair Value of Real Estate Assets (1) 298,732 20.3 (9.4) B Other Assets at Book Value 11,175 C Other Liabilities at Book Value (84,234)
Slide 20: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth INR 62,922 Mn 21.1 % INR 9,155 Mn 7.8% 3.6 x Net Debt to Undrawn Committed Cost of Debt Net Debt (1) Net Debt to EBITDA(5) Market Value (1) Facilities (p.a.) Diversified debt Book with a mix of debentures Well staggered maturity profile an
Slide 21: Our Markets
04 Our Markets mindspacereit.com 21
Slide 22: Indian Office Sector: Riding the Winds of Favorable Trends
Indian Office Sector: Riding the Winds of Favorable Trends Emerging trends Rising GCC Return to in India’s Office Domestic SEZ Reforms landscape Office Market Occupiers c. 43 msf c. 40% 49% c. 38 msf c. 70% Net absorption in % share of Pan % share in overall Vacancy in SEZ Physical Occupancy CY2023(
Slide 23: GCCs: India a preferred destination
GCCs: India a preferred destination c. 50% 72 msf 1.7 Mn c. 85% % share of India in Total demand of GCC employees in Lower average global GCC Grade A office India(1) salary of engineers market(1) space from GCCs viz-a-viz developed since 2020(2) countries(3) GCC Growth forecast(2)(3) 2400 270 291 23
Slide 24: Hyderabad – Second largest Tech hub of India
Hyderabad – Second largest Tech hub of India Progressive government policies and Infrastructure growth are key market drivers Hyderabad’s GCC Landscape 9.1 Lakh 60% 180+ 24% Tech workforce in Telangana Share of GCCs in overall GCCs in Hyderabad(3) % share of Pan India GCC driven by Hyderabad(1) leas
Slide 25: Madhapur as the preferred office market drives highest absorption in Hyderabad
Madhapur as the preferred office market drives highest absorption in Hyderabad 70-80 2nd 72 msf 60% Rs psf (in Size) 58% share of City’s Share of net absorption in last Highest rentals amongst all Largest micro market across office stock(1)(2) ~5 years (1) micro markets India (1) (1)i n m Source: d
Slide 26: Mumbai Region - Infrastructure projects upgrades driving office demand uptick
Mumbai Region - Infrastructure projects upgrades driving office demand uptick Navi Mumbai – A Preferred Location with Accessible Talent 130 msf top 3 6.6 msf Ranked amongst in terms of overall quality of living in India 3 Ranked rd , 2nd time in a row, in cleanliness index(3) in India Completed Stoc
Slide 27: Pune - Thriving Office Market with Excellent Social Infrastructure
Pune - Thriving Office Market with Excellent Social Infrastructure SBD East Micro Market(2) 79 msf ~3.5 msf 44 msf 56% Completed Stock as on Avg. net absorption in last Q1 CY2024( (1) ~5 years(1)(3) 56% share of City’s Share of net absorption in office stock(1) last ~5 years(1)(3) 85-90 Pune Airport
Slide 28: Chennai - One of the key growth markets
Chennai - One of the key growth markets South-West Micro Market(2) 75 msf ~7 msf 20 msf 28% Completed Stock as on Highest net absorption 27% share of City’s Share of net absorption in Q1 CY2024(1) ever in Chennai in office stock(1) last ~5 years (1)(3) CY2023(1) Highest ever net leasing in Chennai i
Slide 29: Our Growth Drivers
05 Our Growth Drivers mindspacereit.com 29
Slide 30: Embedded opportunities within Portfolio to drive NOI and Occupancy growth
Embedded opportunities within Portfolio to drive NOI and Occupancy growth Focused execution and leveraging growth levers to drive NOI growth • Lease up of vacant Area (ex. Pocharam): 2.4 msf • ~80% Of Vacancy is in SEZ area • Strong leasing evidenced for converted ~9.3 Organic NOI spaces Growth msf
Slide 31: Near term Portfolio Growth Potential
Near term Portfolio Growth Potential Commerzone Raidurg The Square BKC 98 Hyderabad Mumbai Continuous sponsor pipeline (~15 msf potential) Two assets already offered(1) 1.8 msf 0.15 msf Leased to US tech giant Leased to BFSI tenant In addition to sponsor assets, third party inorganic opportunities b
Slide 32: Our Franchise & Portfolio
06 Our Franchise & Portfolio mindspacereit.com 32
Slide 33: Sponsored by One Of India's Leading Real Estate Group
Sponsored by One Of India’s Leading Real Estate Group Over 6 decades of experience across Residential, Office, Malls & Hotels Office Hospitality Malls Residential Retail Leasable Area >50 msf (1) 3,300+ (2) operational 4 operational malls Developed residential Operates 230+ retail hotel keys project
Slide 34: Presence in Key Office Markets
Presence in 4 Key Office Markets Located strategically in established office micro-markets Mumbai Hyderabad Region 12.6 msf 14.1 msf 33.2 msf Total Leasable Area Presence in Presence in Malad-Goregaon Madhapur and micro-market Navi Mumbai IT Corridor markets Mumbai ` Pune Hyderabad Chennai Presence
Slide 35: Delivered Robust Performance
Delivered Robust Performance Cumulative distribution of INR 66.3 p.u. since listing 20.7% c.15 msf (1) Releasing Spread on Gross Leasing 10.6 msf INR 39.3 Bn 12.4 % Total distribution(3) Annualized returns(7) 2.3 msf 7.8 % p.a.p.m. Delivered New Cost of Debt as on 31 Developments Mar 24(5) 7.0% CAGR
Slide 36: High Quality Office portfolio in Prime Locations (1/5)
High Quality Office portfolio in Prime Locations (1/5) Mindspace Madhapur: Largest Business Park in Hyderabad 13.1 msf 9.6 msf 96.4 % Leasable Area Completed Area Committed Occupancy Data m i n das s pofa31 cest March r e i t . c2024 om 36
Slide 37: High Quality Office portfolio in Prime Locations (2/5)
High Quality Office portfolio in Prime Locations (2/5) Commerzone Kharadi, Pune 2.9 msf Leasable Area 1.9 msf Completed Area 100% Committed Occupancy Commerzone Yerwada, Pune 1.7 msf Leasable Area 1.7 msf Completed Area 97.6% Committed Occupancy mindspacereit.com 37 Data as of 31st March 2024
Slide 38: High Quality Office portfolio in Prime Locations (3/5)
High Quality Office portfolio in Prime Locations (3/5) The Square Nagar Road, Pune 0.8 msf Leasable Area 0.8 msf Completed Area 100% Committed Occupancy Commerzone Porur, Chennai 1.1 msf Leasable Area 1.1 msf Completed Area 84.0% Committed Occupancy Data m i n das s pofa 31 c est rMarch e i t . c 20
Slide 39: High Quality Office portfolio in Prime Locations (4/5)
High Quality Office portfolio in Prime Locations (4/5) Mindspace Airoli East, Navi Mumbai 6.4 msf Leasable Area 4.8 msf Completed Area 82.2% Committed Occupancy Mindspace Airoli West, Navi Mumbai 5.3 msf Leasable Area 5.0 msf Completed Area 80.0% Committed Occupancy Data m i n das s pofa 31 c est rM
Slide 40: High Quality Office portfolio in Prime Locations (5/5)
High Quality Office portfolio in Prime Locations (5/5) Mindspace Malad, Mumbai 0.8 msf Leasable Area 0.8 msf Completed Area 99.6% Committed Occupancy The Square BKC, Mumbai 0.1 msf Leasable Area 0.1 msf Completed Area 100.0% Committed Occupancy Data m i n das s pofa 31 c est rMarch e i t . c 2024 om
Slide 41: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 28.1% (Mar 24) vs. 29.7% (Dec 23) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (28.1%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks L&T 4.2
Slide 42: 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 Smartworks Verizon Cognizant Atos India UBS Fiserv Allstate Hitachi energy Qualcomm Highradius NCR Princet
Slide 43: Re-energizing Parks
07 Re-energizing Parks mindspacereit.com 43
Slide 44: Dynamic Environment, Vibrant Workspaces
Dynamic Environment, Vibrant Workspaces mindspacereit.com 44
Slide 45: Energized Landscape for Business Excellence
Energized Landscape for Business Excellence mindspacereit.com 45
Slide 46: Infusing modern design elements to elevate entry experience
Infusing modern design elements to elevate entry experience Tailoring common areas to meet the evolving preferences of tenants mindspacereit.com 46
Slide 47: Experience Center: An Inclusive Ecosystem for all Lifestyle & Business Needs
Experience Center: An Inclusive Ecosystem for all Lifestyle & Business Needs Enhancing the Mindspace offering with a modern club facility with top notch amenities c. 130 ksf Exclusive and premium space Perspective Offers enriching entertainment, sports, lifestyle, recreation and dining experiences m
Slide 48: Curated mix of amenities enhancing work place experience
Curated mix of amenities enhancing work place experience Badminton | Squash | Indoor-Outdoor Cafes Bar and Lounge Tennis Yoga | Meditation | Aerobic State of the art gym facility Half Olympic Size Lap Pool Rooms mindspacereit.com 48
Slide 49: SOCIALising at Vantage Café in the Park
SOCIALising at Vantage Café in the Park Launched the first-ever One of the largest SOCIAL SOCIAL in Hyderabad OUTLETS in the country mindspacereit.com 49
Slide 50: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie OPEN AIR MOVIE POWERTALKS – VVS MINDSPACE PREMIER 1 SCREENING 2 LAXMAN 3 RAVI GUPTA LIVE 4 LEAGUE Over 1,30,000 employees across 7 of our business parks attended the events mindspacereit.com 50
Slide 51: Tenant Engagement Initiatives, Designed to Build Camaraderie
Tenant Engagement Initiatives, Designed to Build Camaraderie MOVIE SCREENING MOVIE SCREENING VVS LAXMAN VVS LAXMAN RAVI GUPTA LIVE RAVI GUPTA LIVE MINDSPACE PREMIER LEAGUE MINDSPACE PREMIER LEAGUE MINDSPACE PREMIER LEAGUE mindspacereit.com 51
Slide 52: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 52
Slide 53: Key Achievements and Awards
Key Achievements and Awards Mindspace REIT: Real Estate Excellence • 1st in India to score 100/100 as ‘Global Listed Sector Leader’ in Office Development Benchmark • Ranked 1st in Asia in ‘Listed Companies’ category for commercial development • Received 5 star rating for 2nd consecutive year, in GRE
Slide 54: ESG - Key Highlights
ESG - Key Highlights Scope 1+2 emission 28.9% 56,645 Renewable energy mix tCO2e for FY24(1) (30.4% reduction from FY20 baseline) 12,58,068 KL 61.4% of material Water Recycled sourced using sustainable sourcing INR Bn12 10 of Cumulative Green Signed Green Leases Financing availed (0.7 msf) 37% 57.1%
Slide 55: 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 Seven Member Board / Independent • 57% independent directors on the Board Chairman • Manager can be removed with 60% approval
Slide 56: 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 Visit to Vipla Foundation sponsoring join RE100 initiative meals through the year Durgam Cheruvu Lake Establishing a school with a capacity Great place to work Makeover, Hyderabad of 40
Slide 57: Shareholding Pattern
08 Shareholding Pattern mindspacereit.com 57
Slide 58: Unitholding Pattern as on 31 March 2024
Unitholding Pattern as on 31 March 2024 Unitholding Summary INR 20,482 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 205 Bn) (1) MF NIIs AIF 0.9% 10.9% 0.5% Insurance 1.7% NPS Sponsors & Sponsor Public 0.2% Group (Others) DIIs 3.2% Total 63.5% 36.5% Unithold
Slide 59: Annexure
09 Annexure mindspacereit.com 59
Slide 60: 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)(3) NOI (INR Mn) % of NOI Assets Q4 FY24 Q4 FY23 FY24 Q4 FY24 Q4 FY23 FY24 Q4 FY24 Mindspace Airoli (E) 981 974 3,879 730 723 2,913 15% Mindspace Airoli (W) 874 681 3,451 641 472 2,544 13% Mindspace Mal
Slide 61: 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 Private Limited(3) SPV: K Raheja IT SPV: Avacado SPV: Mindspace SPV: KRC SPV: Horizonview SPV:
Slide 62: Portfolio Summary
Portfolio Summary 26.3 msf of Completed area with WALE of 6.8 years and MTM potential of 9.2%(1) 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 6.4 4.8 1.6 72.7% 82.2%
Slide 63: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile FY25 FY26 FY27 Asset Area % of Gross Rent at Area % of Gross Rent at Area % of Gross Rent at Expiring Contracted Expiry Expiring Contracte Expiry Expiring Contracted Expiry (msf) Rentals (INR psf) (msf) d Rentals (INR psf) (msf) Rentals (INR psf) Mindspace Airoli East
Slide 64: Key Financial Metrics
Key Financial Metrics Delivered consistent growth on key financial metrics Revenue (INR mn) (1) NOI (INR mn) (1,3) 5,999 4,912 5,963 5,948 120 (2) 4,818 120 (2) 4,768 (87) (2) 5,440 5,604 4,551 4,545 5,879 4,792 4,731 186 (2) 5,360 186 (2) 4,364 4,974 4,172 4,916 3,997 4,014 4,703 5,254 4,365 Q4 FY2
Slide 65: Balance Sheet as on 31 Mar 24
Balance Sheet as on 31 Mar 24 Balance Sheet (INR Mn)(1) Mar-24 Dec-23 Notes 1. All numbers are prior to minority Sources of Funds adjustment Total Equity 149,285 151,017 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Sub-Total 149,285 151,017 Money, Advances from
Slide 66: Debt Maturity Schedule as on 31 Mar 24
Debt Maturity Schedule as on 31 Mar 24 Interest Wt. Avg. Principal Repayment Description Fixed/ Total Undrawn Principal Rate Maturity FY30 & (INR Mn) Floating Facility Facility O/S FY25 FY26 FY27 FY28 FY29 Total (p.a.p.m.) (Years) Beyond At REIT Level MLD Fixed 3,750 - 3,750 6.5% 0.1 3,750 - - - - -
Slide 67: De-risked Portfolio with ~91.0% Completed Assets
De-risked Portfolio with ~91.0% Completed Assets Project wise Market Value breakup (1) Completed Assets form 91.0% of the Market Value(3) U/C & Total % of Completed Asset Future Dev. Value Total (INR Mn) (INR Mn) (INR Mn) (%) Under Construction Mindspace Airoli East 45,424 2,100 47,524 15.9% 8.0% Mi
Slide 68: Stable Distribution with Potential Organic Growth
Stable Distribution with Potential Organic Growth Distribution Overview Q4 FY24 FY24 Distribution DPU Yield Distribution INR 2,829 Mn INR 4.77 p.u. 5.6% INR 11.4 Bn Interest ₹0.46 DPU 9.6% Distribution INR 19.2 p.u. per unit INR 4.77 Yield Dividend ₹4.31 90.4% 5.6% Declaration Date Record Date Payme
Slide 69: Research Houses Covering Mindspace REIT
14 Research Houses Covering Mindspace REIT Research House Analyst Email Id Ambit Capital Karan Khanna karan.khanna@ambit.co Avendus Spark Girish Choudhary girish.c@avendusspark.com Axis Capital Samar Sarda samar.sarda@axiscap.in Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Rajiv Be
Slide 70: 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 71: Thank You
Thank You Investor Relations Enquiries: Nitin Garewal (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 71
Mindspace Business Parks REIT — Q4 FY24 Earnings Presentation on 6ix