Mindspace Business Parks REIT has announced robust financial performance for the quarter ending June 30, 2024, signalling strong growth in India’s competitive Grade A office market. The REIT, managing an extensive portfolio across four key office markets, has showcased impressive metrics that highlight its resilience and strategic focus.
During the first quarter of FY25, Mindspace REIT reported a committed occupancy rate of 91.1%, indicative of sustained demand for its properties. The gross leasing activity reached a notable 1.1 million square feet, complemented by an impressive re-leasing spread of 23.9% on 1 million square feet of re-let area. This positive momentum has propelled in-place rents to an average of INR 70 per square foot per month across its parks. Furthermore, the recent approval for demarcating an additional approximately 500,000 square feet of Special Economic Zone (SEZ) space in Airoli West reinforces the REIT’s ambitious expansion strategy. In addition to strong leasing activity, Mindspace REIT is advancing its development pipeline with 4.4 million square feet currently under construction. This includes significant projects such as 1 million square feet at Commerzone Kharadi and 300,000 square feet dedicated to a Data Center in Airoli West. Excitingly, the REIT plans to launch a new 1.5 million square foot building at Mindspace Airoli East, further enhancing its presence in Navi Mumbai.
The REIT has reported a commendable year-on-year growth in Net Operating Income (NOI) of 9.2%, reaching INR 496 crore for Q1 FY25. This robust performance is underpinned by a healthy Loan-to-Value (LTV) ratio of approximately 21.9%, reflecting solid financial health. Mindspace REIT raised INR 1,500 crore at an effective rate of 7.80% per annum, with an average cost of borrowing positioned at 7.9%. Notably, it became the first Indian REIT to issue Sustainability Linked Bonds, successfully raising INR 650 crore, with backing from the International Finance Corporation (IFC), a member of the World Bank. Additionally, the REIT declared a distribution of INR 299 crore, translating to INR 5.04 per unit for Q1 FY25, marking a 5% increase year-on-year. The record date for this distribution is set for August 2, 2024, with payments scheduled for August 8, 2024. Since its listing in August 2020, Mindspace REIT has distributed an impressive INR 4,231 crore, equating to INR 71.3 per unit.
As Mindspace REIT continues to navigate the evolving landscape of real estate investment, its focus on sustainability and strategic growth positions it as a key player in shaping the future of India’s commercial real estate market. The integration of advanced practices in development and financing not only enhances its operational performance but also contributes positively to the broader environmental goals within the industry.