Mindspace REIT Acquires 1.82 Million Sq Ft Office Space in Hyderabad for ₹2,038 Crore
Mindspace Business Parks REIT (Mindspace REIT) has announced the acquisition of a prime commercial asset in Hyderabad for ₹2,038 crore. The acquisition is part of Mindspace REIT’s ongoing strategy to expand its portfolio of high-quality office spaces across key cities in India. The 1.82 million sq ft property, located in Madhapur, Hyderabad, is a Grade-A commercial asset currently leased to Qualcomm, a leading global technology company.
This acquisition, which was approved by the board of K Raheja Corp Investment Managers, the manager of Mindspace REIT, marks another significant milestone for the company. The board also approved the preferential issue of units amounting to ₹613 crore to finance this deal. The property, known as Commerzone Raidurg, has a weighted average lease expiry (WALE) of 12 years, which adds stability to the REIT’s portfolio.
For Mindspace REIT, this acquisition is not just about expanding the portfolio; it is also about enhancing its income stability. On a proforma basis, the acquisition is expected to add ₹167 crore to the company’s net operating income (NOI) for FY25, reflecting an impressive 8.2% growth in NOI. This is a strategic move that aligns with the company’s growth strategy of acquiring high-quality, fully leased assets with long-term tenants. Ramesh Nair, CEO of Mindspace REIT, commented on the acquisition, saying, “This Grade-A+, fully leased asset enhances our portfolio, boosts income stability, and aligns with our growth strategy.” The acquisition underscores the company’s continued focus on securing high-quality commercial properties that not only enhance its portfolio but also offer reliable rental income streams.
The acquisition will also have a notable impact on Mindspace REIT’s overall portfolio size. Following this deal, the company’s total portfolio will grow from 34.8 million sq ft to 36.6 million sq ft, further solidifying its position as one of India’s leading commercial real estate investment trusts. The company’s committed occupancy rate will rise from 91.5% to 92%, reflecting the high demand for its properties and the successful leasing of its assets. Additionally, the acquisition will increase the company’s gross asset value (GAV) to ₹33,550 crore. This significant growth in GAV highlights the strength of Mindspace REIT’s portfolio and its ability to attract investors. However, the acquisition also comes with an increase in the loan-to-value (LTV) ratio, which will rise to 25.3%, reflecting the financing structure of the deal.
The Commerzone Raidurg property adds to Mindspace REIT’s growing presence in Hyderabad, bringing its total portfolio in the city to 15 million sq ft. Hyderabad, being one of the top-tier cities in India for commercial real estate, continues to witness strong demand for office spaces, driven by the presence of global corporations and a growing tech ecosystem. Mindspace REIT’s acquisition of this high-quality asset ensures that it remains well-positioned to capitalise on this demand and offer attractive returns to its investors. This acquisition is also part of a broader strategy that includes Mindspace REIT’s right of first offer (ROFO) agreement with its sponsors, which allows the company to secure high-quality assets ahead of other buyers. As Mindspace REIT continues to grow and expand its portfolio, this deal marks another step in its mission to provide long-term, sustainable returns to its investors while contributing to the growth of India’s commercial real estate sector. The acquisition of the 1.82 million sq ft office space in Hyderabad for ₹2,038 crore reinforces Mindspace REIT’s position as a key player in India’s commercial real estate market. With an increased portfolio size, stable income streams, and a growing presence in high-demand markets like Hyderabad, Mindspace REIT is well-equipped to continue delivering value to its stakeholders and investors.
