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Mindspace Business Parks REIT Results: Latest Quarterly Results & Analysis

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Mindspace Business Parks REIT 26 Jul 2023 10:34 AM
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Q1FY24 Quarterly Result Announced for Mindspace Business Parks REIT

Mindspace Business Parks REIT announced Q1FY24 results:

  • Revenue from Operations: Rs 5,604 million in Q1FY24 compared to Rs 4,910 in Q1FY23, up 14.1% YoY
  • Net Operating Income: Rs 4,570 million in Q1FY24 compared to Rs 4,014 in Q1FY23, up 13.8% YoY
  • Recorded Gross leasing of c.0.4 msf, Re-leasing spread stood at 10.1% on c.0.3 msf of area re-let
  • In-place rents increased by c.5.9% YoY to Rs 66.2 psf/month
  • NOI grew by 4.7% QoQ in Q1FY24 to Rs 4,570 million
  • Average cost of borrowing at the end of Q1FY24 stood at 7.7%
  • Raised Rs 5 billion through NCDs at REIT - interest savings of over 100 bps on the borrowing
  • Low Loan-to-value (LTV) of 18.8% demonstrating balance sheet strength
  • Actively working on under construction pipeline of 2.5 msf
  • Initiated work on an additional 1.6 msf re-development project
  • Declared distribution of Rs 2,846 million or Rs 4.8 per unit for Q1FY24
  • c.90.2% is in the form of dividends, tax-exempt in the hand of unitholders
  • Record date for the distribution is July 31, 2023.
  • Payment of the distribution shall be processed on or before August 08, 2023
  • Received Platinum LEED O&M certification across 16 buildings in the portfolio
  • Released second sustainability report for Mindspace Business Parks REIT

Speaking on the results, Vinod Rohira, Chief Executive Officer, K Raheja Corp Investment Managers Private, Manager to Mindspace REIT said on the productive quarter, “India had emerged as a key hub in global service sector value chain for providing cutting-edge technology support services at a very attractive cost base. This coupled with the growth of domestic Indian companies has kept demand for non-SEZ Grade A office spaces strong. As the committed occupancy of our portfolio has started getting converted into occupancy, its impact on NOI growth is visible in the 13.8% YoY growth. While our operational and financial performance has continued to remain healthy, we remain watchful of the impact of evolving economic environment.”

 

Result PDF

Result PDF

Mindspace Business Parks REIT announced Q3FY23 results:

  • Financial Q3FY23:
    • Net operating income (NOI) remained strong at Rs 4,551 million in Q3FY23.
      • Up 16.8% YoY and 4.6% QoQ (excluding one-time compensation of Rs 186 million received)
    • Recorded NOI of Rs 12,737 million in 9MFY23, 14.6% growth excluding one-time compensation
    • Strong balance sheet with low net debt to market value of 17.6%
    • Raised Rs 1,000 million through the issuance of Commercial Paper at the REIT level
  • Distribution Q3FY23:
    • Distribution of Rs 2,846 million or Rs 4.80 per unit for Q3FY23, a growth of 3.4% YoY
    • Dividend, which is tax-exempt in the hand of unitholders, forms 91% (Rs 4.37 p.u.) of distribution while interest constitutes c.9.0% (R 0.43 p.u.)
    • The record date for the distribution is February 06, 2023, payment of the distribution shall be processed on or before February 13, 2023.
  • Operating and Growth Q3FY23:
    • Robust gross leasing of c.1.3 msf in Q3FY23, taking cumulative leasing in 9MFY23 to c.3.5 msf
      • Achieved average rent of Rs 67 psf/month, across 17 tenants in Q3FY23
    • Committed Occupancy further rises by ~140 bps QoQ to 88.3%
    • Re-leasing spread in Q3 stood at 24.9% on 1 msf of area re-let
    • In-place rents have grown by 9.4% YoY to Rs 64.5 psf/month
    • Plan to re-develop 1.6 msf (1) at Madhapur, to enhance the growth pipeline

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, Mindspace Business Parks REIT said on their strong set of numbers, “We are delighted to report yet another strong quarter, recording a gross leasing of 1.3 msf in Q3 taking the cumulative 9MFY23 leasing to 3.5 msf. Despite the challenging economic environment, the Committed Occupancy of the portfolio jumped by 400 bps to 88.3% during 9MFY23. Our strong performance further instils confidence to bring forward strategic supply and pursue another value accretive redevelopment opportunity in one of India’s top-performing micro-markets. Our well-curated offerings and strong brand equity, enable us to deliver long-term sustainable growth for our unitholders.”

 

Result PDF

Mindspace Business Parks REIT announced Q2FY23 results:

  • Clocked healthy net operating income (NOI) growth,
    • NOI at Rs 4,172 million in Q2FY23, up by 16.0% YoY and 3.9% QoQ
    • Recorded NOI of Rs 8,186 mn in H1FY23
    • NOI margin remains strong at over 80%
  • A resilient balance sheet with low net debt-to-market value of 16.8%
  • The gross asset value of the portfolio increased by 3.3% over March 22 to Rs 273 billion
  • Net asset value increased from Rs 364.9 per unit on March 22 to Rs 370.3 per unit 

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, Mindspace Business Parks REIT said on their strong set of numbers, “As envisaged, we continue to see demand for Grade A institutionally managed office assets as the preferred choice by our global clients as their return to office plans are now in motion. We have leased 1.3 msf during the quarter taking the cumulative gross leasing to 2.1 million square feet in the first half of the financial year resulting in further improvement in committed occupancies in our portfolio. We continue to unlock value in our portfolio through disciplined organic growth and prudent capital allocation, in alignment with our focus to maximize unitholder value.”

Result PDF

Mindspace Business Parks REIT announced Q1FY23 Result :

  • Recorded strong leasing of c.0.9 msf across 18 deals
  • Committed occupancy of the portfolio jumped by c. 130 bps QoQ to 85.6%
  • Re-leasing spread stood at 36.4% on 0.5 msf of area re-let  
  • In-place rents have grown by 9.3% YoY to INR 62.4 psf/month
  • Continue to deliver on NOI growth, NOI at INR 4,014 mn, up by 10.9% YoY
  • NOI margin remains strong at over 80%
  • Strong balance sheet with low Loan-to-value (LTV) of c.16.6%
  • Released 1st Sustainability Report, reiterating our commitment to sustainable development
  • Mindspace REIT Group features in India’s Great Mid-Size Workplaces 2022
  • Commerzone Kharadi awarded by Architects Engineers & Surveyors Association Pune (AESA) for Good Practices in Building Design and Construction  
  • Received LEED Platinum O&M certification across 6 Buildings & LEED Gold O&M across 5 Buildings

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, said, “After recording one of the best years of leasing in FY22, the tailwinds continue to grow stronger as we enter the new financial year. Our strategy of upgrading our offerings during downtime and implementing the best asset management practices has allowed us to benefit from the anticipated demand upswing. The committed occupancy of the portfolio has risen by 130 bps QoQ to 85.6% as we leased 0.9msf during the quarter. The demand recovery initially led by the large occupiers is now seeing a much broad-based momentum. We expect a stronger recovery in the second half of the year as a greater percentage of employees return to their offices.”

 

Result PDF

Realty company Mindspace Business Parks REIT announced Q4FY22 results:

  • Reported Net Operating Income of Rs 3,960 million for Q4 FY22, up 10.6% YoY
  • Gross Asset Value of the portfolio increased by 5.7% YoY to Rs 264 billion
  • Net Asset Value increased from Rs 357.8 per unit in September 2021 to Rs 364.9 per unit
  • Strong balance sheet with low Loan-to-value (LTV) of c.15.7%

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, said, “Mindspace REIT has recorded one of the strongest years of leasing as volumes surpassed 4.5msf. The increased preference for offices that offer aspirational and experiential product offerings and are maintained by best asset managers augurs well for our business. The robust hiring by IT companies and GCCs over the past 2 years coupled with actioning of return to office plans, point to a strong resurgence in demand. We are excited about fast-tracking our under-construction inventory along with realization of mark-to-market opportunity for churn space given the optimistic demand dynamics.”

 

Result PDF

Mindspace Business Parks declares Q3FY22 result:

  • Uptick in office leasing continues, c.3.8 msf leased in the first 9 months of FY22
  • Pre-leased an entire upcoming building of c.0.7msf at Commerzone Kharadi, Pune Declared distribution of INR 4.64 per unit
  • Reported Net Operating Income of INR 3,715 Mn, up by 3.8% on YoY basis and 3.4% QoQ
  • Declared distributions of INR 2,752 Mn / INR 4.64 p.u., with over 90% being tax-exempt
  • Annualised distribution yield of c.6.7% on issue price
  • Average cost of debt further reduced by c.20 bps QoQ to 6.7% as on December 31, 2021
  • Post the quarter end, raised INR 5 Bn through issuance of debentures at 6.35% p.a. coupon, further reducing the pro forma cost of debt to 6.6% p.a.
  • Strong balance sheet with low Loan-to-value (LTV) of c.15.8%

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, said, “Mindspace Business Park REIT witnessed a significant uptick of leasing activity with c.1.8 msf of space leased in the December quarter, taking the overall leasing to c.3.8 msf the first 9 months of FY22. The significant change in occupiers’ preference towards quality office spaces which adhere to the best standards of health, safety, experience, and wellness protocols has helped increase demand for our portfolio. We expect this trend to accentuate further in the coming quarters. The Union Budget’s impetus of replacing the SEZ policy to improve ‘Ease of doing business’ in SEZs would provide fillip to the demand for SEZ spaces in our Portfolio.”

Result PDF

Highlights:

  • Robust demand cycle emerges as employees start returning to office, c.2.1 msf leased in the first half of FY22
  • Mumbai Region ROFO Asset Achieves Built-to-Suit Pre-leasing of c.0.5 msf
  • Declares Distribution of INR 4.60 p.u., over 90% being Tax-Exempt
  • Reported Net Operating Income of INR 3,592 Mn, up by 6.7% on YoY basis
  • Declared distribution of INR 2,728 Mn / INR 4.60 p.u., with over 90% being tax-exempt
  • Annualised distribution yield of 6.7% on issue price of INR 275 p.u.
  • Raised INR 4 Bn in the form of debentures at SPV level at 6.1% p.a. coupon
  • Average cost of debt further reduced by c.15 bps q-o-q to 6.9% as on September 30, 2021
  • Strong balance sheet with low net debt to market value of c.14.9%
  • NAV stood INR 357.8 p.u. as on September 30, 2021, vs. INR 345.2 p.u. as on March 31, 2021

Speaking on the results, Mr. Vinod Rohira, Chief Executive Officer, Mindspace Business Parks REIT said, “We continue to witness strong leasing activity across our portfolio with over 2.1 million square feet leased in first half of this financial year. We remain increasingly confident of the commercial market outlook, buoyed by record tech hiring and growth trends, improved GCC prospects, vaccination coverage in our gateway cities as employees return to office. We are excited about the robust demand cycle re-emerging.”

 

Result PDF

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