Brookfield India Real Estate Trust · NSE:BIRET.RR
Brookfield India Real Estate Trust — Q1 FY2023 Earnings Presentation
33 slides from Brookfield India Real Estate Trust's earnings presentation, Aug 3, 2022
Slide 1: Q1 FY2023 Investor Update
Brookfield India Real Estate Trust Q 1 F Y 2 0 2 3 – I N V E S T O R U P D AT E AU G U S T 0 3 , 2 0 2 2 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, owning 18.6 MSF of class A office properties Delhi NCR (11.3 MSF) 18.6 MSF 14.2 MSF Gurugram 3.9 0.1 TOTAL AREA OPERATING AREA Noida 5.7 1.6 Total 9.6 1.7 89% Rs 63 PSF 67% EFFECTIVE ECONOMIC IN-PLACE RENT O
Slide 4: High Quality Properties in Gateway Cities
High Quality Properties in Gateway Cities 28% 26% Largest Office SEZ in CBD Gurugram Largest Office SEZ in Noida CANDOR TECHSPACE, SECTOR 21, GURUGRAM (G2) CANDOR TECHSPACE, SECTOR 135, NOIDA (N2) 4.0 MSF | 29 ACRES 4.5 MSF | 30 ACRES 17% 16% 13% Mumbai’s only Private SEZ located in Powai Largest Of
Slide 5: Heading towards Stabilization…
Heading towards Stabilization… We have recovered back to our pre-covid leased area and are well poised to lease the balance 2.0 MSF vacancy, including in the new towers delivered during the pandemic LEASED AREA GROWTH (MSF) Leased Area Expansion Options Balance Lease-up 251,000 SF Prior to the pande
Slide 6: …with green shoots of Expansion demand…
…with green shoots of Expansion demand… While FY2022 leasing was predominantly driven by relocation and consolidation, we are now seeing expansion demand from our existing tenants as they commence their “return to office” FY2022(1) Q1 FY2023(2) Qualcomm Accenture Mindtree 15% 23% 1.2 MSF 251,000 SF
Slide 7: …and strong visibility on our organic growth
…and strong visibility on our organic growth We achieved a 6% growth in the NOI run rate from the previous quarter and have an embedded growth headroom of 15 – 20% till stabilization NOI GROWTH POTENTIAL (MILLIONS) +17% Rs 396 Rs 11,000 +6% Rs 1,014 Rs 549 Rs 9,391 Rs 200 Rs 8,842 (1) (2) (3) (4) Q4
Slide 8: Attractive inorganic growth prospects…
Attractive inorganic growth prospects… We have an acquisition pipeline of 6.4 MSF of operating class-A properties, which will further increase scale and operating income One of the largest high quality office campuses in Gurugram Prime office and high street retail portfolio in a 250-acre integrated
Slide 9: … which will broad base the REIT
… which will broad base the REIT The pipeline is aligned with our stated strategy of pursuing accretive acquisitions and will diversify our portfolio ASSET VALUE BY GEOGRAPHY TOP TENANT CONCENTRATION (% of Gross Asset Value) (% Leased Area) 16% 19% 28% Top 10 = 66% 15% 51% 39% 17% 15% Post acquisiti
Slide 10: Q1 FY2023 | Business Highlights
Q1 FY2023 | Business Highlights We witnessed strong leasing demand across our assets this quarter with 311,000 SF of gross leasing and 94,000 SF of expansion options signed ~99% ~9% • Collections of operating lease rentals remained robust at ~99% Collections Operating Lease Avg. Escalation on 1.1 Re
Slide 11: Q1 FY2023 | Financial Highlights
Q1 FY2023 | Financial Highlights Robust growth with a 38% increase in operating income, supported by the N2 acquisition Millions Q1 FY2023 Q1 FY2022 • 25.9% YoY increase Operating Lease o Rs 468 million (28.9%) increase due to addition of N2 to the Rs 2,034 Rs 1,616 Rentals (OLR) REIT offset by Rs 5
Slide 12: Q1 FY2023 | Distributions
Q1 FY2023 | Distributions We are distributing Rs 5.10 per unit, of which 52% is tax-free DISTRIBUTION PER UNIT COMPONENTS Rs 1,709 million DISTRIBUTION (Q1 FY2023) Rs 0.03 , 1% Rs 2.56 , 50% Rs 5.10 DISTRIBUTION PER UNIT (DPU) AUG 12, 2022 RECORD DATE Rs 2.45 , 48% Rs 0.06 , 1% (1) Interest on Share
Slide 13: Key Ongoing ESG Initiatives
Key Ongoing ESG Initiatives Through continuous improvements, we ensure efficient, resilient, future-fit assets that support the needs of our tenants and communities NET ZERO Energy Efficient Electronically Commutated (EC) Fans ~15% and Electrostatic (ES) Filters installed in 63 AHU’s serving ~0.6 MS
Slide 14: Progress on Net Zero
Progress on Net Zero We are actively tracking our emissions and are closely working with all our stakeholders to achieve a Net Zero carbon future by 2050 or sooner GREENHOUSE GAS EMISSIONS (‘000 Mt CO2e)(1) ENERGY CONSUMPTION (MILLION UNITS)(1) Scope 2 Scope 1 17 2 1 1 127 123 99 85 76 76 62 61 1 34
Slide 15: Business & Financial Updates
Business & Financial Updates CANDOR TECHSPACE N1, NOIDA
Slide 16: Significantly Complete and Stable Portfolio
Significantly Complete and Stable Portfolio 94% of gross asset value is in operating properties, with an Effective Economic Occupancy of 89% and a long-dated WALE of 7.0 years Area (in MSF) Leased Area Metrics In-place Asset Dev. Area # Office Committed / WALE Asset Operating Total Rent Value(2) Pot
Slide 17: 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, 10% Technology, 50% Accenture 3 15% +90
Slide 18: New Leasing and Renewals
New Leasing and Renewals Robust leasing success across assets with gross leasing of 311,000 SF during the quarter SELECT NEW LEASES / RENEWALS(1) Tenant / Industry Assets Area (SF) Industry GE Oil & Gas Oil & Gas Kensington 74,000 Rs 89 PSF AVERAGE RENT ON NEW LEASING(2) Accenture Consulting G2 80,0
Slide 19: 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 in the near term KEY HIGHLIGHTS LEASE EXPIRY SCHEDULE Area Expiring (MSF) Renewed Cumulative Expiry (% of Rentals) • Expiries: 24,000 SF a
Slide 20: Property Income | Walkdown
Property Income | Walkdown MILLIONS Q1 FY2023 Q1 FY2022 KEY DRIVERS • Rs 468 million (28.9%) increase due to addition of N2 to the Income from Operating Lease Rs 2,034 Rs 1,616 REIT offset by Rs 50 million (3.1%) decrease primarily due to Rentals (OLR) vacancies • Rs 257 million (44.6%) increase due
Slide 21: NDCF | Walkdown
NDCF | Walkdown Millions Q1 FY2023 Millions Q1 FY2023 Income from Operating Lease Rentals Rs 2,034 NDCF (SPV Level)(2) Rs 2,161 CAM / Other Revenue 876 Interest on Shareholder Debt 860 Revenue from Operations Rs 2,910 Dividends 22 CAM / Other Direct Expenses (742) Repayment of Shareholder Debt 1,196
Slide 22: Summary Balance Sheet
Summary Balance Sheet Our business is well-capitalized, backed by a strong balance sheet MILLIONS JUNE 30, 2022 Liabilities and Equity Total Equity Rs 87,585 Borrowings(1) 52,246 Security Deposits 4,815 Other Liabilities 2,930 Total Rs 147,577 Assets Investment Property Rs 134,970 Investment Propert
Slide 23: Capital Structure and Liquidity
Capital Structure and Liquidity Simple capital structure, low-cost asset level debt and significant debt headroom will continue to be our strengths HEADROOM IN LTV(3) 49% Rs 50.5B Rs 3.1B NET DEBT(1) UNDRAWN COMMITTED FACILITY 31% 7.16% AAA Stable AVERAGE INTEREST RATE(2) CRISIL Brookfield REIT Regu
Slide 24: Information Supplement
Information Supplement CANDOR TECHSPACE N2, NOIDA
Slide 25: Brookfield Group's Footprint in India
Brookfield Group’s Footprint in India Brookfield Group owns a high quality pan-India office portfolio spanning 29 MSF POWAI BUSINESS DISTRICT, MUMBAI ECOWORLD, BANGALORE CANDOR G1, GURUGRAM EQUINOX, MUMBAI ECOSPACE, BANGALORE CATEGORY IDENTIFIED ASSET ROFO PROPERTIES OTHER BROOKFIELD ASSETS Total Ar
Slide 26: Detailed Lease Expiry Schedule
Detailed Lease Expiry Schedule In-place rent at Expiry (Rs Year / Asset Area Expiring (‘000 SF) % of Gross Rentals PSF)(1) Q2 - Q4 FY2023E Kensington 448 33% Rs 111 G2 189 6% 88 N1 40 1% 65 N2 197 7% 52 K1 121 4% 47 Total – REIT 994 11% Rs 88 FY2024E Kensington 707 39% Rs 87 G2 6 0% - N1 233 13% 40
Slide 27: Q1 FY2023: Occupancy Bridge
Q1 FY2023: Occupancy Bridge ASSET MARCH 31, 2022 JUNE 30, 2022 OPERATING LEASED COMMITTED NEW GROSS OPERATING LEASED COMMITTED AREAS IN ‘000 SF RENEWALS AREA AREA OCCUPANCY LEASING EXPIRIES AREA AREA OCCUPANCY Kensington 1,558 1,409 90% 74 - - 1,560 1,483 95% G2 3,877 3,232 83% 80 (0) - 3,881 3,312
Slide 28: Q1 FY2023: Re-leasing Spread
Q1 FY2023: Re-leasing Spread ASSET SPREAD ON NEW LEASING SPREAD ON RENEWALS TOTAL RE-LEASING AREAS IN ‘000 SF AREA SPREAD(1) AREA SPREAD(1) AREA SPREAD(1) Kensington 74 113% - - 74 113% G2 80 (9%) - - 80 (9%) N1 36 (2%) 25 - 61 (2%) N2 - - 0 - 0 - K1 - - 36 0% 36 0% REIT 191 30% 60 0% 251 27% (1) Sp
Slide 29: Property Income | Consolidation Details
Property Income | Consolidation Details INCOME FROM REVENUE FROM MILLIONS OPERATING LEASE NET OPERATING INCOME (NOI)(1) OPERATIONS RENTALS (OLR) Q1 FY2023 Q1 FY2022 Q1 FY2023 Q1 FY2022 Q1 FY2023 % OLR Q1 FY2022 % OLR Kensington Rs 438 Rs 435 Rs 476 Rs 463 Rs 413 94% Rs 402 92% G2 576 632 837 889 606
Slide 30: Ongoing Capex and Upgrades
Ongoing Capex and Upgrades Rs 3,077 million 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(1) COMPLETION DATE (MILLIONS) Asset Upgrades/Tenant
Slide 31: Research Coverage
Research Coverage RESEARCH HOUSE ANALYST EMAIL ID Ambit Karan Khanna Karan.Khanna@ambit.co Axis Capital Samar Sarda Samar.Sarda@axiscap.in Bank of America Kunal Tayal Kunal.Tayal@bofa.com HSBC Bank Puneet Gulati PuneetGulati@hsbc.co.in ICICI Securities Adhidev Chattopadhyay Adhidev.Chattopadhyay@ici
Slide 32: Glossary (1/2)
Glossary (1/2) Gross Asset Value / Asset Value The market value as determined by the Valuer as of March 31, 2022 (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 33: 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 Includes the NOI for the Initi
Brookfield India Real Estate Trust — Q1 FY2023 Earnings Presentation on 6ix