Mindspace Business Parks Reit · NSE:MINDSPACE.RR
Mindspace Business Parks Reit — Q2 FY25 Earnings Presentation
72 slides from Mindspace Business Parks Reit's earnings presentation, Oct 25, 2024
Slide 1: Cover letter to stock exchanges: outcome of board meeting
October 25, 2024 To, The National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, Plot No. C/1, G-Block, Phiroze Jeejeebhoy Towers, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai - 400051 Mumbai - 400001 Scrip Symbol “MINDSPACE” (Units) Scrip Code “543217” (Units) and Scrip Code
Slide 2: Cover letter continuation and signature
The above information shall also be made available on Mindspace REIT’s website at https://www.mindspacereit.com/investor-relations/stock-exchange-filings. Please take the same on your record. Thanking you. Yours faithfully, For K Raheja Corp Investment Managers Private Limited (Formerly known as K R
Slide 3: Press Release: Mindspace REIT Announces Results for Q2 FY25
Annexure-1 Mindspace Business Parks REIT Announces Results for Q2 FY25 Announces Highest Ever Distribution of INR 3,054 Mn; Growth of 7.5% YoY Committed Occupancy increases to 91.7%1 Robust gross leasing of c.2.1 msf in Q2 FY252 Pre-leased 3 Built to Suit Data centres of c.1.05 msf taking Portfolio
Slide 4: Press release: GRESB title and financial highlights
• Mindspace REIT Secured Prestigious Title of ‘Global Listed Sector Leader – Office Development Benchmark’ for the 2nd Consecutive Year o Outperformed GRESB and Peer Average Scores for both Office Development and Standing Investment Benchmarks; scores 99/100 and 91/100 respectively. o Scored a perfe
Slide 5: Press release disclaimer and investor relations contacts
factors and in no manner should be construed as an indication of its reflection in the market price of units or any other securities / instruments issued or proposed to be issued by Mindspace REIT. No representation, warranty or undertaking, express or implied, is made or assurance given that such s
Slide 6: Q2 FY25 Earnings Presentation
Annexure-2 Q2 FY25 Investor Presentation 25th October 2024 mindspacereit.com 1
Slide 7: 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 8: Table of Contents
Table of Contents Key Highlights : Q2FY25 04 Project Updates 10 Financial Updates 13 Our Markets 18 Our Growth Drivers 26 Our Franchise & Portfolio 29 Re-energizing Parks 40 Value Creation via ESG 49 Shareholding Pattern 53 Annexures 55 Note: 1. For ease and simplicity of representation, certain fig
Slide 9: Key Highlights
01 Key Highlights mindspacereit.com 4
Slide 10: Q2 FY25: Strong Operational Performance driving Financial Growth
Q2 FY25: Strong Operational Performance driving Financial Growth 91.7% Rising Committed Occupancy excl. Pocharam (1) 2.1 msf Robust Gross Leasing incl. pre-leasing 1.05 msf Signed 3 new built-to-suit data centers with PDG in Airoli West 5.1% Y-o-Y NOI growth Y-o-Y(2) INR c. 3.1 Y-o- Bn Distribution
Slide 11: Sustained Leasing results in Committed Occupancy surpassing 91%
Sustained Leasing results in Committed Occupancy levels surpassing 91%(1) Key Operating Indicators Q2 FY25 H1 FY25 Gross Leasing(2) 2.1 msf 3.2 msf Re-leased Area 0.6 msf 1.2 msf New and Vacant Area Leased 0.5 msf 1.0 msf Re-leasing Spread(3) 27.8 % 25.8 % on 1.0 msf on 2.0 msf Average Rent for Area
Slide 12: Modern and Sustainable workplaces attracting occupiers
Modern and Sustainable workplaces attracting occupiers High Quality Portfolio with 6 out of 9 parks(1) achieving > c.95% committed occupancy levels 100% 100% 100% 99.3% 97.6% 94.9% Gera The Square The Square Mindspace Mindspace Commerzone Commerzone Nagar Road BKC Malad Madhapur Yerwada Kharadi Pune
Slide 13: Lease Expiry Profile
Lease Expiry Profile 0.7 msf scheduled for expiry during Q3-Q4 FY25 ~60% releasing visibility (inc. area re-let in Q1 & Q2) Track record of achieving Re-leasing spread for 2.3 msf expiries in FY25 across parks Area Expiry (msf) Area Re-leased (since Apr 20) Rent at Expiry msf (INR psf) 74.8 83.9 96.
Slide 14: Strategic Partnership with Princeton Digital Group
Strategic Partnership with Princeton Digital Group, Leading DC Operator Signed 3 Built to suit Data Centers in Airoli (W) Perspective 1.05 msf Total Leasable Area Tenure Lock in period 20+10+10 years 15 years 5 DCs with 1.68 msf INR 6 p.u. footprint(1) Estimated Value Accretion(2) • Delivering PDG’s
Slide 15: Acquisition in Mindspace Madhapur
Acquisition in Mindspace Madhapur Strategic Acquisition for Mindspace REIT(1) to consolidate holding at Mindspace Madhapur Transaction details c. 0.26 msf (2) INR 2,974 Mn Total Leasable Area of units proposed to be Fair Value(3) (INR 11,353 psf) acquired Of the units to be acquired INR 2,750 Mn c.
Slide 16: Project Updates
02 Project Updates mindspacereit.com 11
Slide 17: 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 ▪ Awaiting Denotification order to ▪ 100% P
Slide 18: 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: 1st & 2nd Floor slab castin
Slide 19: Financial Updates
03 Financial Updates mindspacereit.com 14
Slide 20: Key Financial Indicators Q2 FY25 H1 FY25
Financial Performance Supported by Rising Organic Cash Flows Key Financial Indicators Q2 FY25 H1 FY25 Figures in INR Mn Revenue from Operations(1)(2) 6,230 6.0% Y-o-Y 12,428 8.2% Y-o-Y Net Operating Income(1)(2) 5,037 5.1% Y-o-Y 10,001 7.1% Y-o-Y Distribution 3,054 7.5% Y-o-Y 6,043 6.3% Y-o-Y DPU 5.
Slide 21: NDCF Build-up
NDCF Build-up Particulars (INR Mn) Q2 FY25 Revenue from Operations(1) 6,230 Property Taxes & Insurance (194) Other Direct Operating Expenses (999) Net Operating Income (NOI) 5,037 Property Management Fees (155) Net Other Expenses (141) EBITDA(1) 4,741 Cash Taxes (Net of Refunds) (777) Working Capita
Slide 22: Low Leverage Offers Balance Sheet Headroom for Future Growth
Low Leverage Offers Balance Sheet Headroom for Future Growth ₹ 68,633 Mn 21.9 % INR 7,463 Mn 7.9% 3.8 x 3.8 x Net Debt to Undrawn Committed Cost of Debt Interest Coverage Net Debt (1) Net Debt to EBITDA(5) Market Value (1) Facilities (p.a.p.m.) Ratio(6) Diversified debt Book with a mix of debentures
Slide 23: Our Markets
04 Our Markets mindspacereit.com 18
Slide 24: 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 landscape Office Market Occupiers c. 31 msf c. 34% c. 45% 75%-85% Net absorption in 9M % contribution of % share in overall Physical Occupancy CY2024(1) GCCs in office gross lea
Slide 25: GCCs: India a preferred destination
GCCs: India a preferred destination c. 50% 53 msf 1.7 Mn c. 85% % share of India in Total space leased GCC employees in Lower average global GCC by GCCs since India(1) salary of engineers market(1) 2022-H12024(2) viz-a-viz developed countries(3) GCC Growth forecast(2)(3) 2400 270 291 2300 272 2200 2
Slide 26: 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 ~6.7 msf 230+ 13% Lakh Tech workforce in Telangana Leasing activity in 9M CY2024 GCCs in Hyderabad(2) Hyderabad’s share of all driven by Hyderab
Slide 27: Madhapur as the preferred office market in Hyderabad
Madhapur as the preferred office market drives highest absorption in Hyderabad 70-80 2nd 75 msf 66% Rs psf (in Size) 57% share of City’s Share of net absorption since Highest rentals amongst all Largest micro market across office stock(1) CY 2019(1) micro markets India (1) (1)i n m Source: d s p aJL
Slide 28: Mumbai Region - Infrastructure upgrades driving office demand
Mumbai Region - Infrastructure projects upgrades driving office demand uptick Navi Mumbai – A Preferred Location with Accessible Talent 135 msf top 3 5.1 msf Ranked amongst in terms of overall quality of living in India 3 Ranked rd , 2nd time in a row, in cleanliness index(2) in India Completed Stoc
Slide 29: Pune - Thriving Office Market
Pune - Thriving Office Market with Excellent Social Infrastructure SBD East Micro Market(2) 80 msf ~3.6 msf 45 msf 57% Completed Stock as on Avg. annual net absorption Q3 CY2024( (1) since CY 2019 (1) 56% share of City’s Share of net absorption office stock(1) since CY 2019(1) 85-90 Pune Airport cap
Slide 30: Chennai - One of the key growth markets
Chennai - One of the key growth markets South-West Micro Market(2) 77 msf ~3.4 21 msf 32% msf Completed Stock as on Average annual net 27% share of City’s Share of net absorption Q3 CY2024(1) absorption since 2019(1) office stock(1) since 2019 (1) Highest ever net leasing in Chennai in CY2023 6.6 Ch
Slide 31: Our Growth Drivers
05 Our Growth Drivers mindspacereit.com 26
Slide 32: Organic NOI 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 : 2.1 msf (ex. Pocharam) • Total SEZ area converted to NPA: 2.1 msf • Strong leasing evidenced for converted spaces ~10.4 Organic NOI
Slide 33: Near term Portfolio Growth Opportunity
Near term Portfolio Growth Opportunity Commerzone Raidurg The Square BKC 98 Hyderabad Mumbai Continuous sponsor pipeline (~15 msf potential) Two assets were 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 be
Slide 34: Our Franchise & Portfolio
06 Our Franchise & Portfolio mindspacereit.com 29
Slide 35: Sponsored by One Of India's Leading Real Estate Group
Sponsored by One Of India’s Leading Real Estate Group Over 6 Decades Pan India INR 471 Bn (5) of experience Market Capitalization presence of 3 listed entities Office Hospitality Malls Residential Retail Developed residential Operates 280+ retail Leasable Area >50 msf (1) c.4,200+ (2) keys 7 malls (
Slide 36: Mindspace REIT's Presence in Key Office Markets
Mindspace REIT’s Presence in 4 Key Office Markets Located strategically in established office micro-markets Mumbai Hyderabad Region 14.4 msf 13.7 msf 34.7 msf Total Leasable Area Presence in Presence in Malad-Goregaon Madhapur and micro-market Navi Mumbai IT Corridor markets Mumbai ` Pune Hyderabad
Slide 37: Delivered Robust Performance
Delivered Robust Performance Cumulative distribution of INR 76.5 p.u. since listing 21.7% c. 18.3 msf (1) Releasing Spread on Gross Leasing 12.6 msf INR 45.4 Bn 13.3 % Total distribution(3) Annualized returns(7) 2.3 msf 7.9 % p.a.p.m. Delivered New Cost of Debt as on 30 Developments Sep 24(5) 6.7% C
Slide 38: 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 13.2 msf 9.6 msf 97.6% Leasable Area Completed Area Committed Occupancy Data m i n das s pofa 30-Sep-24 cereit.com 33
Slide 39: 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 100.0% Committed Occupancy Commerzone Yerwada, Pune 1.7 msf Leasable Area 1.7 msf Completed Area 94.9% Committed Occupancy Data m i n das s pofa 30-Sep-24 cereit.com 34
Slide 40: 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 100.0% Committed Occupancy Commerzone Porur, Chennai 1.1 msf Leasable Area 1.1 msf Completed Area 93.4% Committed Occupancy Data m i n das s pofa 30-Sep-24 cereit.com 35
Slide 41: High Quality Office portfolio in Prime Locations (4/5)
High Quality Office portfolio in Prime Locations (4/5) Mindspace Airoli East, Navi Mumbai 7.2 msf Leasable Area 4.8 msf Completed Area 80.6% Committed Occupancy Mindspace Airoli West, Navi Mumbai 6.4 msf Leasable Area 5.0 msf Completed Area 83.8% Committed Occupancy Data m i n das s pofa 30-Sep-24 c
Slide 42: 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 99.3% 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 30-Sep-24 cereit.com 37
Slide 43: Diversified Portfolio of Marquee Tenants
Diversified Portfolio of Marquee Tenants Top 10 tenants contributing 28.8% Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (28.8%) (1) (1) % split by Gross Contracted Rentals % of total Gross Contracted Rentals # of parks L&T 4.1% 2 Manufacturing & Processe
Slide 44: 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 45: Re-energizing Parks
07 Re-energizing Parks mindspacereit.com 40
Slide 46: Dynamic Environment, Vibrant Workspaces
Dynamic Environment, Vibrant Workspaces mindspacereit.com 41
Slide 47: Energized Landscape for Business Excellence
Energized Landscape for Business Excellence mindspacereit.com 42
Slide 48: Infusing modern design elements to elevate experience
Infusing modern design elements to elevate experience Tailoring common areas to meet the evolving preferences of tenants mindspacereit.com 43
Slide 49: Experience Center: An Inclusive Ecosystem
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 50: 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 45
Slide 51: SOCIALising at Vantage Café in the Park
SOCIALising at Vantage Café in the Park The first-ever SOCIAL in One of the largest SOCIAL Hyderabad OUTLETS in the country mindspacereit.com 46
Slide 52: Tenant Engagement Initiatives
Tenant Engagement Initiatives, Designed to Build Camaraderie FLAVOURS OF FREEDOM FLAVOURS OF FREEDOM FLAVOURS OF FREEDOM MPL – FOOTBALL EDITION mindspacereit.com 47
Slide 53: Tenant Engagement Initiatives
Tenant Engagement Initiatives, Designed to Build Camaraderie 1 FLAVOURS OF FREEDOM 2 MPL – FOOTBALL EDITION Over 12,000+ employees across 5 of our business parks attended the events mindspacereit.com 48
Slide 54: Value Creation via ESG
07 Value Creation via ESG mindspacereit.com 49
Slide 55: 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 18.5 Bn (2)(3) INR 6.5 Bn(2) of Cumulative Green / Sustainability linked Bond Sustaina
Slide 56: Key Achievements and Awards
Key Achievements and Awards Mindspace REIT: Real Estate Excellence • Scored 99/100 in Office Development Benchmark • Receives the coveted title of ‘Global Listed Sector Leader – Office Development Benchmark’, for the 2nd consecutive year • Ranked 3rd in Asia in ‘Listed Companies’ category for commer
Slide 57: 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 58: Shareholding Pattern
08 Shareholding Pattern mindspacereit.com 53
Slide 59: Unitholding Pattern as on 30 Sep 2024
Unitholding Pattern as on 30 Sep 2024 Unitholding Summary INR 21,090 Cr 36.5% Market Cap(1) % Free- float 593 Mn units Unitholding Pattern (Market Cap : INR 211 Bn) (1) MF AIF 1.4% 0.4% Insurance 2.1% NIIs 10.4% Sponsors & Sponsor Public DIIs Group (Others) 3.1% Total 63.5% 36.5% Unitholders 63,687
Slide 60: Annexure
09 Annexure mindspacereit.com 55
Slide 61: 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)(1) NOI (INR Mn) % of NOI Assets Q2 FY25 Q2 FY24 H1 FY25 Q2 FY25 Q2 FY24 H1 FY25 Q2 FY25 Mindspace Airoli (E) 991 947 2,016 756 716 1,541 15% Mindspace Airoli (W) 939 867 1,867 684 636 1,368 14% Mindspa
Slide 62: 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 63: Portfolio Summary
Portfolio Summary 26.4 msf of Completed area with WALE of 6.9 years and MTM potential of 4.6%(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 7.2 4.8 2.3 74.2% 80.6%
Slide 64: Breakup of Lease Expiry Profile
Breakup of Lease Expiry Profile Q3-Q4 FY25 FY26 FY27 Asset Area % of Gross Rent at Area % of Gross Rent at Area % of Gross Rent at Expiring Contracted Expiry Expiring Contracted Expiry Expiring Contracted Expiry (msf) Rentals (INR psf) (msf) Rentals (INR psf) (msf) Rentals (INR psf) Mindspace Airoli
Slide 65: Key Financial Metrics (2/2)
Key Financial Metrics (2/2) Delivered consistent growth on key financial metrics Revenue (INR mn) NOI (INR mn) (1,3) 5,999 6,198 6,230 4,912 5,963 5,948 120 (2) 4,818 4,964 5,037 120 (2) 4,768 (87) (2) 5,440 5,604 4,551 5,360 5,879 4,364 4,545 4,792 4,731 186 (2) 186 (2) 4,974 4,172 5,254 4,365 Q2 F
Slide 66: Balance Sheet as on 30-Sep-24
Balance Sheet as on 30-Sep-24 Balance Sheet (INR Mn)(1) Sep-24 Jun-24 Notes 1. All numbers are prior to minority Sources of Funds adjustment Total Equity 1,46,052 1,47,836 2. Other Liabilities primarily include Trade Payables, Capital Creditors, Retention Sub-Total 1,46,052 1,47,836 Money, Advances
Slide 67: Debt Maturity Schedule as on 30-Sep-24
Debt Maturity Schedule as on 30-Sep-24 Interest Wt. Avg. Principal Repayment Description Fixed/ Total Undrawn Principal Rate Maturity FY31 & (INR Mn) Floating Facility Facility O/S FY25 FY26 FY27 FY28 FY29 FY30 Total (p.a.p.m) (Years) Beyond At REIT Level NCD (Tranche 3) Fixed 5,000 - 5,000 6.3% 0.3
Slide 68: De-risked Portfolio with ~89.1% Completed Assets
De-risked Portfolio with ~89.1% Completed Assets Project wise Market Value breakup (1) Completed Assets form 89.1% of the Market U/C & Total % of Value(3) Completed Asset Future Dev. Value Total (INR Mn) Under (INR Mn) (INR Mn) (%) Construction 8.3% Mindspace Airoli East(4) 45,365 3,512 48,877 15.6%
Slide 69: Stable Distribution with Potential Organic Growth
Stable Distribution with Potential Organic Growth Distribution Overview Q2 FY25 H1 FY25 Repayment of Distribution SPV Debt, ₹1.76, 34% INR 6,043 Mn Interest, ₹0.28, DPU 6% INR 10.19 p.u. Other Income, Dividend, ₹0.01, 0% Yield ₹3.10, 60% 5.8% Declaration Date Record Date Payment Date Key Dates On or
Slide 70: Research Houses Covering Mindspace REIT
15 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 Pritesh Sheth pritesh.sheth@axiscap.in Bank of America Kunal Tayal kunal.tayal@bofa.com CITI Research Raji
Slide 71: 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 72: Thank You
Thank You Investor Relations Enquiries: Nitin Garewal (Finance & Investor Relations) Email id: ir@mindspacereit.com mindspacereit.com 67
Mindspace Business Parks REIT — Q2 FY25 Earnings Presentation on 6ix