Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q1 FY22 Earnings Presentation
52 slides from Mindspace Business Parks Reit's earnings presentation, Aug 13, 2021
Slide 1: Q1 FY22 Results Presentation
Q1 FY22 Results Presentation mindspacereit.com 1 13th August 2021
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 09 Financial Update 17 Projects Update 21 Value Creation via ESG 27 Price Performance & Unitholding 33 Market Overview 36 Annexures 42 Note: 1. All the financial numbers in the presentation have been rounded off unless otherwise stated 2. Mindspace
Slide 4: Key Updates
Key Updates mindspacereit.com 4
Slide 5: Key Highlights
Key Highlights 1 Operating Highlights 1.2 msf 56.3 % 1.0 msf >99 % 1.8 msf Increase in Total ROFO leasing update: Gross Leasing Re-leasing Spread (1) Leasable Area Collections of Total 1.8 msf pre-leased at on 1.1 msf primarily due to Contracted Commerzone Madhapur re-development Rentals (2)(3) (ROF
Slide 6: Leasing Overview – Q1 FY22
Leasing Overview – Q1 FY22 1.2 msf leases signed across 10 tenants and achieved 56.3%(1) Re-leasing spread on 1.1 msf(1) 1.2 msf INR 60 psf/month 56.3 % Q1 FY22 Gross Leasing Average Rent for Area Leased Average Re-leasing Spread(1) Q1 FY22 – Gross leasing Area Re-leased (2) 0.6 msf Leased Assets Lo
Slide 7: Delivered Sustainable Financial Performance
Delivered Sustainable Financial Performance Performance driven by efficient cost management Revenue from NOI Operations Key Points (INR Mn) (INR Mn) NOI for Q1 FY22 Q1 FY22 4,197 3,596 marginally up on sequential basis NOI for Q1 FY22 driven by cost Q4 FY21 4,265 (1) 3,579 optimization FY21 16,293 (
Slide 8: Mindspace REIT Declares Q1 FY22 Distribution
Mindspace REIT Declares Q1 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 Apr 21 to Jun 21 Distribution Amount INR 2,728 Mn Outstanding Units 593,018,182 Declaration Date 13 August 21 Distribution p
Slide 9: Portfolio Overview
Portfolio Overview mindspacereit.com 9
Slide 10: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 31.2 msf INR 57.1 psf Total Leasable Area(1) In-place Rent 84.4% 84.4% Same Store Committed Committed Occupancy Occupancy Pune (16.0%) Mumbai Region (41.0%) 11.6% 6.6 years Hyderabad (40.4%) Mark to Market Pot
Slide 11: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 11.6 msf(1) Mumbai Region | 6.8 msf Completed Area: 9.8 msf; Committed Occupancy: 90.1% Completed Area: 4.7 msf; Committed Occupancy: 89.1% Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Regi
Slide 12: 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; Leased: 67 ksf Completed Area: 0.7 msf; Committed Occupancy: 94.0% The Square, Nagar Road Mindspace Pocharam The Square, BKC Pune | 0.8 msf Hyderab
Slide 13: 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 Syntel IBM Verizon UBS Fiserv Allstate Citius UHG Model N Here Solutions Bank of America S
Slide 14: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Reduced concentration risk with top 10 tenants contributing 38.6% (Jun 21) vs. 41.6% (Mar 20) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (38.6%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contr
Slide 15: Lease Expiry Profile
Lease Expiry Profile Successfully re-leased around 70% of FY21 expiries (1) Strong re-leasing achieved despite challenging Track record of achieving Re-leasing spread leasing environment across parks Area Expiry (msf) Area Re-leased (since Apr 18) msf Rent at Expiry Average 27.8% 50.2 54.9 57.8 (INR
Slide 16: Ability to Attract New Tenants along with Existing Tenant Retention
Ability to Attract New Tenants along with Existing Tenant Retention 10.1 msf leased since Apr 18, including 5.6 msf at 27.8% Re-leasing spread New Area leased Existing Area Re-leased % split by area (1) % split by area (1) New Tenants Existing 23.9% Tenants 34.8% 5.6 msf 4.5 msf Leased to 27.8% Re-l
Slide 17: Financial Updates
Financial Updates mindspacereit.com 17
Slide 18: Stable NOI Growth Driven by Effective Cost Management
Stable NOI Growth Driven by Effective Cost Management Revenue from Operations (INR Mn) NOI (INR Mn) % of NOI Assets Q4 FY21 Q1 FY22 Q4 FY21 Q1 FY22 Q1 FY22 Mindspace Airoli (E) 895 884 707 697 19.4% Mindspace Airoli (W) 529 475 407 392 10.9% Mindspace Malad 185 185 161 160 4.5% Mumbai Region 1,608 1
Slide 19: Q1 FY22: NDCF Build-up
Q1 FY22: NDCF Build-up Particulars (INR Mn) Q1 FY22 Revenue from Operations 4,197 Property Taxes & Insurance (139) Other Direct Operating Expenses (462) Net Operating Income (NOI) 3,596 Property Management Fees (105) Net Other Expenses (143) EBITDA 3,348 Cash Taxes (Net of Refunds) (433) Working Cap
Slide 20: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth Strategy to embed a blend of short term and long-term debt with a mix of instruments 14.9% INR 4.5 Bn CRISIL : CCR AAA/Stable(1) INR 37 Bn Net Debt to Undrawn Committed ICRA : ICRA AAA (Stable)(1) Market Value(2) Net Debt Facilities Compos
Slide 21: Projects Updates
Projects Updates mindspacereit.com 21
Slide 22: Development Progress & Other Updates
Development Progress & Other Updates Hyderabad Mumbai Region Pune Mindspace Madhapur (B22) Mindspace Airoli, West (B9) Commerzone Kharadi (B5) ▪ Leasable area: 1.0 msf ▪ Leasable area: 0.7 msf ▪ Leasable area: 0.1 msf ▪ Status: Façade WIP ▪ Status: Level 8 Shuttering WIP ▪ Status: OC received in Q1
Slide 23: Mindspace Madhapur, Hyderabad – Upgrade (1/2)
Mindspace Madhapur, Hyderabad – Upgrade (1/2) Elevated boardwalks for ease of movement Appealing entrance Well spread F&B spaces across the Park Security cabin mindspacereit.com 23
Slide 24: Mindspace Madhapur, Hyderabad – Upgrade (2/2)
Mindspace Madhapur, Hyderabad – Upgrade (2/2) Current Status Final Intent Kiosks – Finishes WIP Perspective Façade Upgrade for Bldg. 3A & 3B commenced Perspective mindspacereit.com 24
Slide 25: Mindspace Airoli East, Mumbai Region - Upgrade
Mindspace Airoli East, Mumbai Region - Upgrade Building 5&6 Façade WIP Drop-off Lobby Area- Wall art is in progress Current Status Final Intent Club House Food Court - WIP Perspective mindspacereit.com 25
Slide 26: The Square BKC, Mumbai Region – Upgrade
The Square BKC, Mumbai Region– Upgrade Current Status Final Intent Entrance Lobby Façade WIP Perspective East Elevation WIP Perspective mindspacereit.com 26
Slide 27: ESG via Value Creation
ESG via Value Creation mindspacereit.com 27
Slide 28: Key Achievements and Awards
Key Achievements and Awards Awarded 36(1) Five Star rating across 4 parks Green Buildings Sword of Honour for 2 parks COVID 19 Assurance Statement for 6 parks >18.7 msf Commercial Project of the Total “Green year - By Realty Conclave Building” Gera Commerzone Kharadi Footprint Environment friendly p
Slide 29: 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 30: Mindspace REIT joins Climate Group’s RE100 Initiative
Mindspace REIT joins Climate Group’s RE 100 Initiative India’s first Real-Estate entity to join RE 100, committing to 100% renewable energy by 2050 Phased transformation to renewable energy (1) 100% 50% 35% 2025 2030 2050 • In furtherance of our agenda towards building a sustainable ecosystem and mi
Slide 31: Spearheading Multi-pronged Initiatives to Tackle the Pandemic
Spearheading Multi-pronged Initiatives to Tackle the Pandemic 1 Strengthening Healthcare Infrastructure in Hyderabad Hospital floor addition • Extending support to construct additional floor at a Government hospital in Kondapur, Hyderabad • Floor addition to enable capacity enhancement of 120 beds •
Slide 32: Facilitated Vaccination of c.60k People
Embarking on a Journey to Safety, Facilitated Vaccination of c.60k People Vaccination Drive 7 150 No. of Parks Staff & families c.59k 1,200 Tenant workforce Construction workers c.60k Total No. of Vaccines Facilitated Partnered Hospitals S.L. Raheja Aditya Birla Fortis Apollo Columbia Asia Cloud 9 m
Slide 33: Price Performance & Unitholding
Price Performance & Unitholding mindspacereit.com 33
Slide 34: Stable Price Performance
Stable Price Performance Part of “MSCI India Domestic Small Cap Index“ and various other MSCI and FTSE indices (1) Price movement of Mindspace REIT since listing Stock Symbol – NSE : Mindspace; BSE : 543217 200 180 (Nifty Realty: +68.6%) 160 140 (Nifty: +42.3%) 120 100 (Mindspace REIT: +2.8%) 80 Aug
Slide 35: Unitholding Summary
Unitholding Summary Unitholding Pattern as on 30 Jun 21 Unitholding Summary (593 Mn units) Non Institutions Blackstone (Market Cap : INR 168 Bn) (1) Foreign Portfolio 11.9% Group Investors 9.2% 14.3% Alternative Investment Funds Sponsors & Sponsor Public 1.3% Group (Others) 63% 37% Mutual Funds 0.1%
Slide 36: Market Updates
Market Updates mindspacereit.com 36
Slide 37: Robust Fundamentals and Outlook to Drive IT-BPM Demand Momentum
Robust Fundamentals and Outlook to Drive IT-BPM Demand Momentum Robust hiring outlook on the back of pipeline, we anticipate need to return to office for talent management and retention Indian IT-BPM Revenue (USD Bn) Employment Trends 300- 350 ▪ IT- BPM is the Topmost Private Sector in the Country w
Slide 38: Mumbai Region Key Updates
Mumbai Region Grade-A Office Stock H1 CY2021 Key Updates Worli-Lower Thane Parel ▪ Leasing to gain momentum in second half of 2021driven 9.8% 10.2% by BFSI, engineering and manufacturing amongst others Others 17.7% ▪ Currently vacancy in Thane Belapur road is high primarily Andheri due to new supply
Slide 39: Hyderabad Key Updates
Hyderabad Grade-A Office Stock H1 CY2021 Supply, net absorption and vacancy trend analysis (1) Micro-Markets : Madhapur 8.00 7.4 7.5 12.00% Madhapur 7.00 10.3% Others 10.00% 66.1% 4.7% 2.5% 6.00 8.00% 5.00 4.5 3.6 3.8 4.0 Stock 3.7 6.6% Peripheral 4.00 6.00% 71.6 msf East 3.00 2.6 4.00% 2.9% 1.8 2.0
Slide 40: Pune Key Updates
Pune Grade-A Office Stock H1 CY2021 Supply, net absorption and vacancy trend analysis Micro-Market: SBD East Others 11.3% 3.0 7.0% 2.6 2.5 5.9% 2.4 2.1 5.1% 6.0% PBD West 2.0 22.7% 5.0% 2.0 1.5 4.3% 1.5 4.0% Stock 1.5 1.2 1.1 55.8 msf 3.0% 2.3% 3.5% 1.0 2.0% (1) SBD West SBD East 0.5 0.3 1.0% 10.7%
Slide 41: Chennai Key Updates
Chennai Grade-A Office Stock H1 CY2021 Supply, net absorption and vacancy trend analysis Micro-Market: South-West Others 11.0% 1.80 12.0% 19.9% 1.6 1.60 10.0% (1) 10.0% South-West 1.40 24.1% 1.20 7.1% 4.6% 8.0% 0.6 0.9 1.00 0.8 6.0% Stock 0.80 2.1% 53.8 msf 0.60 0.4 0.4 4.0% 0.40 0.4 0.1 2.0% Periph
Slide 42: Annexure
Annexure mindspacereit.com 42
Slide 43: Mindspace REIT Structure
Mindspace REIT Structure 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: Sundew SPV: Gigaplex Park (Hyderabad) Properties & Tradi
Slide 44: Portfolio Summary
Portfolio Summary 23.8 msf of Completed area with Committed Occupancy of 84.4% & WALE of 6.6 years Total Leasable Completed UC/Future Committed In-place Occupancy WALE Asset Area Area Area Occupancy Rent (%) (years) (msf) (msf) (msf) (%) (INR psf) Mindspace Airoli East 6.8 4.7 2.1 89.1% 89.1% 5.2 52
Slide 45: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile 9M 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 46: Balance Sheet as on 30 Jun 21
Balance Sheet as on 30 Jun 21 Balance Sheet (INR Mn) 30 Jun 21 31 Mar 21 Notes Sources of Funds 1) Debt is prior to minority interest Total Equity 169,430 172,134 adjustment Sub-Total 169,430 172,134 2) Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Liabilities Mone
Slide 47: Debt Maturity Schedule as on 30 Jun 21
Debt Maturity Schedule as on 30 Jun 21 Principal Repayment Interest Wt. Avg. Description Fixed/ Total Undrawn Principal Rate Maturity 9M 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 6.60% 0.8
Slide 48: Summary of Valuation as on 31 Mar 21
Summary of Valuation as on 31 Mar 21 Project wise Market Value breakup(1) Market Value (INR Mn) Market Value (%) Asset UC/Future UC/Future Completed Total Completed Total Dev. Dev. Mindspace Airoli East 40,849 1,850 42,699 16.6% 0.8% 17.3% Mindspace Airoli West 29,476 6,998 36,474 12.0% 2.8% 14.8% M
Slide 49: 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 • 17th floor WIP • Expected completion: Phase 1 – Q2 FY22 Phase 2 – Q4
Slide 50: 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 51: 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 52: Thank You
Thank You Investor Relations Enquiries: Kedar Kulkarni (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 52
Mindspace Business Parks REIT — Q1 FY22 Earnings Presentation on 6ix