All about Mindspace REIT
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All about Mindspace REIT

By Harshvardhan Sharan

Last updated - Sep 8th, 2022

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Mindspace REIT, the second REIT that started in India after Embassy REIT has announced its June quarter report. Mindspace business park REIT reported an 11% rise in its net operating income to Rs. 401.4 crores. It also declared a distribution and dividend amount for the quarter that ended June.

If you are someone who’s looking forward to investing in Mindspace REIT, make sure you read this quick REIT overview before investing!

About Mindspace, and how was Mindspace REIT introduced in India?

Established by K Raheja Corporation, Mindspace is a brand that manages commercial and industrial parks. Just a year after India’s first REIT listing, Embassy REIT, Mindspace REIT was listed in 2020. Mindspace’s IPO(Initial Public Offering) was declared from 27th July 2020 to 29th July 2020. During the span of these 3 days, Mindspace offered Rs. 4,500 cr to its unit holders at a base price of Rs. 274 per unit. Mindspace REIT owns and manages about 2.95 sq ft leasable area of which 92% is occupied in their lease business. The REIT has a 180 MNC and fortune companies client base. Located in Mumbai, Hyderabad, Chennai, and Pune, the Mindspace industrial hub offers offices, residential towers, entertainment facilities, and other retail businesses. The buildings by Mindspace are sustainable and cause very minimal impact on the environment.

Mindspace’s growth opportunity and portfolio consists -

Total leasable areaCompleted areaLeasable areaNo. of tenantsCompleted buildings
31.8 msf24.4 msf85.6%175+57

FY22- the strongest year for Mindspace

  • FY22 was the strongest year in terms of leasing as the portfolio clocked leasing of 4.5 msf.

  • Mindspace REIT has given a 6.7% annualised distribution with 90% + tax-exempt dividends.

  • Mindspace’s YoY growth in the year 2020-2021 stood at 7.4% and in 2021-2022, its YOY growth stood at 8.2. Additionally, in 2022, Mindspace has added 36 new tenants and has leased out 73.9% of its commercial space to the new tenants.

  • Mindspace REIT shares closed at 370.99 on August 10, 2022 (NSE) and have given 3.86% returns over the last 6 months and 29.21% over the last 12 months.

June quarter report-

  • Mindspace Business Parks REIT, declared a distribution of 281 crores distribution which means Rs. 4.74 per unit to the unitholders in June 2022.

  • The committed occupancy of its real estate portfolio stood at 85.6% while the company leased 0.9 msf in the June quarter.

  • Mindspace made a quarterly net profit of Rs. 280.20 crores in June 2022 up 0.72% from Rs. 278.20 crores in June 2021. Out of which, Rs. 261 crores ( Rs.4.41 per unit) will be distributed as dividends and 19 crores (Rs.0.032) will be given as interest to the unitholders.

Mindspace REIT assets-

A. MUMBAI:

1) Mindspace Airoli East-

Mindspace Airoli East is well known as a contemporary business district for the burgeoning global IT/ITeS companies in the Thane -Belapur belt. With world-class amenities, security, and tech integration, the space has added to the weightage of the Thane–Belapur micro market. It is in close proximity to the residential areas of Navi Mumbai and Thane. Also, it has added to the benefit of daily commutes with its proximity to Airoli railway station. Also, the upcoming international airport is in close proximity, fuelling the location’s value for some of the leading Fortune-500 companies that are stationed here.

Land areaLeasable areaOccupancy rateNo. of tenants
50.1 acres6.8 msf88.3%24

2) Mindspace Airoli West

Mindspace has high prominence over sustainability and green construction. This is what the Mindspace Airoli West has carried forward. It offers green spaces augmented with modern amenities and the finest infrastructure. The property also distributes power to SEZ tenants as a deemed distribution licensee, enabling an uninterrupted power supply at lower costs. The asset is located near Airoli railway station and is in proximity to the upcoming international airport.

Land areaLeasable areaOccupancy rateNo. of tenants
50.0 acres5.2 msf67.2%29

3) Paradigm Mindspace Malad

Mindspace REIT has catapulted the Malad-Goregaon micro‑market into an evolved urban precinct of the Mumbai region. The property is a junction of contemporary amenities, spacious and efficient workspaces, excellent social infrastructure, and proximity to residential areas. It is an office space of choice for a range of leading Fortune 500 companies. It is at the heart of Malad micro market and has excellent connectivity. The property focuses on sustainability. Its proximity to inorbit mall and Botanical Theme Garden makes it the best place for corporate occupiers.

Land areaLeasable areaOccupancy rateNo. of tenants
4.2 acres0.7 msf93.6%12

4) Square avenue 61 BKC

Square Avenue 61 has strong connectivity to the domestic and international airports, in addition to elevated road corridors, planned infrastructure, and local and metro lines. The entire asset has been leased to a renowned BFSI tenant and reflects Mindspace REIT’s commitment to offering efficient workspaces, tailored to suit the needs of the discerning client base. The asset commands high rents backed by its well-planned infrastructure, strong connectivity, and high demand for Grade A city center office spaces. The location also has easy access to restaurants, medical facilities, business centers, and five-star hotels.

Land areaLeasable areaOccupancy rateNo. of tenants
0.9 acres0.1 msf100%1

B. HYDERABAD

1) Mindspace Madhapur

Mindspace Madhapur is Hyderabad’s largest Grade-A commercial park. The sprawling 4-acre green zone in the business park, along with an open theatre and other outdoor facilities, aims at providing opportunities for coming together and fostering camaraderie among the workforces. Mindspace Madhapur is well connected in terms of rail and road access, in addition to being in proximity to the airport. The Durgam Cheruvu cable bridge has further reduced the travel time between Madhapur and Jubilee Hills, facilitating better access to the HITEC city and the financial district with the rest of the city.

Land areaLeasabke areaOccupancy rateNo. of tenants
97.2 acres11.7 msf90.6%87

2) Mindspace Pocharam

Mindspace Pocharam is well connected to the outer ring road and warangal highway. This asset is a Grade-A high quality office space. It has the amenities to match the global IT companies and their formidable workforce. Sophisticated design, open areas, green zones, and best-in-class amenities are the highlights of Mindspace Pocharam.

Land areaLeasable areaOccupancy rateNo. of tenants
66.5 acres1 msf56.7%1

C. PUNE

1) Commerzone Yarawada

Commerzone Yerwada is just six kilometres from Pune airport and is near Pune's railway station and upcoming metro station. Schlumberger, Nvidia, UBS, and BNY Mellon are just a few of the well-known tenants who occupy the asset. It is the most sought after office space in Maharashtra. With ATMs, Gymnasium, food plazas, outdoor sports facilities etc. are a few of the amenities that this asset holds.

Land areaLeasable areaOccupancy rateNo. of tenants
25.7 acres1.7 msf97.4%21

2) Gera commerzone Kharadi

Located in the Kharadi of eastern Pune micro market, Gera commerzone is Grade-A commercial zone. It comprises state-of-the-art facilities and infrastructure. It is also near the Pune railway station and airport, which makes this asset raise the bar over other developments in the same locality.

Land areaLeasable areaOccupancy rateNo. of tenants
25.8 acres2.9 msf100%15

3) The square signature business chambers

In addition to being located in the eastern quadrant of Pune, the Square Signature Business Chamber is easily accessible to the Pune International Airport, the city railway station, and the new metro station. Property was transformed from a mall to an office space, using a mix of intelligent design, latest technology and modern features that meet global standards.

Land areaLeasable areaOccupancy rateNo. of tenants
10.1 acres0.8 msf100%3

D. CHENNAI

1) Commerzone Porur

Commerzone Porur is the entity’s flagship commercial offering, purposefully located in the Southwest Chennai micro-market, close to the central business district and the Chennai International Airport. Its unique amenities and infrastructure are a confluence of recreational, collaborative, and wellness aspects that facilitate dynamic work styles.

Land areaLeasable areaOccupancy rateNo. of tenants
6.0 acres0.8 msf36.5%5

Should you invest in Mindspace REIT?

This investment suits HNIs as well as regular investors as a good long-term investment given its well-diversified portfolio and tax-free distribution. Low occupancy (84.3%) & consistency of cash flows will be a risk though. In the last 4Y, the company had grown its revenue by 6.9% CAGR to 1750 Cr. It was up by 53.77% in FY22. The NAV has moved up from 326.1 at the time of IPO (July 2020) to 364.9 as of Mar 2022.

Mindspace offers a higher post tax yield (90% of NDCF). All SPVs are 100% owned by REIT except for Mindspace Hyderabad (11% is owned by Government of AP).

Net Operating Income (NOI) is up by 8.2% to 1486.4 Cr. The distribution yield currently is at 5.37%. Loan to Value is at 15.7%. Net debt to NOI at 2.82 times.

With this, we wrap up with the overview of the Mindspace REIT. To know more about REITs, head to our blog on REITs and also, head to our REIT investment page to discover all the 3 REITs and start investing!

Author avatar
Harshvardhan SharanInvestment Associate

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