Mindspace REIT Achieves 29% Annual Growth in Q3 Net Operating Income
Mindspace Business Parks REIT has announced a significant 29% year-on-year growth in net operating income, reaching Rs 671 crore for the quarter ended December. This impressive performance underscores the robust demand for office spaces in key Indian cities, particularly Mumbai, Pune, and Hyderabad.
The listed Real Estate Investment Trust (REIT) also reported a 27% year-on-year increase in revenue from operations, which now stands at Rs 816 crore. The K Raheja Corp-backed entity has been making substantial strides in the commercial real estate market.
One of the key highlights of the quarter was the gross leasing of over 1.1 million sq ft, with committed occupancy rising to 94.5%. The re-leasing spread for the quarter was a notable 27.4% on 1 million sq ft of re-let area, reflecting strong rental growth across key micro-markets, especially Madhapur in Hyderabad. The in-place rent for the portfolio is currently Rs 75 per sq ft per month.
Mindspace REIT has also secured a significant lease with HERE Technologies' India arm, leasing 2.1 lakh sq ft at Mindspace Airoli West (Gigaplex) under a long-term lease of over 10 years. This deal further solidifies the REIT's position in the tech-driven office market.
Ramesh Nair, CEO and MD of Mindspace REIT, commented on the quarter's achievements: “We further scaled our portfolio through the acquisition of CBD assets in Mumbai and Pune, adding 0.8 million sq ft of leasable area, taking our inorganic additions to the portfolio to 4 million sq ft since our listing. We remain focused on pursuing accretive acquisition opportunities to deliver value to our unitholders.”
The REIT has declared a distribution of Rs 378 crore or Rs 5.83 per unit for the quarter, bringing the cumulative distribution to Rs 6,330 crore or Rs 105.7 per unit since listing in August 2020. This underscores the REIT's commitment to returning value to its unitholders.
Currently, Mindspace REIT is actively working on an under-construction pipeline of 3.6 million sq ft, further expanding its portfolio. The company's cost of debt has also seen a reduction, decreasing by 13 basis points to 7.39% per annum per month, supported by refinancing efforts. During the quarter, the REIT raised non-convertible debentures (NCDs) of Rs 1,900 crore at an effective rate of 6.98% per annum per month. The REIT’s Loan-to-Value (LTV) ratio stands at 24.9%.
Sponsored by the K Raheja Corp group, Mindspace REIT owns office assets with a total leasable area of 39 million sq ft, spanning Mumbai Region, Pune, Hyderabad, and Chennai. The portfolio includes 5 integrated business parks and 9 independent office assets, making it a leading player in the Indian commercial real estate market.
