Dailymirror.news,Mumbai, January 29, 2025: Mindspace Business Parks REIT (BSE: 543217 | NSE: MINDSPACE), a prominent owner and developer of high-quality Grade-A office spaces across India, has announced the acquisition of 100% equity shareholding in Sustain Properties Private Limited, which owns the Grade-A commercial asset “Commerzone Raidurg” in Hyderabad’s Madhapur micro-market.

This acquisition, comprising approximately 1.82 million square feet (msf) of leasable area, is made under the Right of First Offer (ROFO) agreement with the Sponsors. The acquisition is in line with Mindspace REIT’s growth strategy, further strengthening its portfolio, income stability, and enhancing returns for unitholders.

Mr. Ramesh Nair, CEO of Mindspace REIT, stated, “The acquisition of Commerzone Raidurg marks a significant milestone in our journey to deliver long-term value and growth for our unitholders. Situated in Hyderabad’s prime business district, this fully leased, Grade-A+ asset adds substantial value to our portfolio, ensuring enhanced income stability.

The inclusion of a marquee tenant like Qualcomm, a leading Fortune 500 company, further solidifies our position in India’s commercial real estate sector. With its strong market potential, this acquisition aligns with our focus on high-quality, income-generating assets and strengthens our presence in one of India’s most dynamic markets.”

Transaction Overview:

  • Asset Highlights:
    • The leasable area of around 1.82 msf is part of a total development of approximately 2.8 msf.
    • The asset is fully leased, providing stable and predictable income.
    • Qualcomm, a Fortune 500 company, is the main tenant of the property.
  • Portfolio Enhancement:
    • The acquisition strengthens Mindspace REIT’s position in Hyderabad, bringing its portfolio size to around 15 msf in the region.
    • The Weighted Average Lease Expiry (WALE) of about 12 years ensures long-term income stability.
    • Rental income of INR 69 per square foot per month, presenting significant mark-to-market (MTM) potential.

Financial Impact:

  • The total acquisition price is INR 2,038 Crore, which reflects a 7.5% discount based on independent valuations.
  • The purchase consideration amounts to approximately INR 613 Crore.
  • On a proforma basis, the acquisition is expected to add INR 167 Crore to FY25’s Net Operating Income (NOI), representing an estimated growth of 8.2%.

Post-Acquisition Portfolio Metrics:

  • The REIT’s portfolio will grow from approximately 34.8 million square feet (msf) to 36.6 msf.
  • Committed occupancy will increase from 91.5% to 92%.
  • The Gross Asset Value (GAV) will rise to INR 33,550 Crore.
  • The Loan-to-Value (LTV) ratio will increase to 25.3%, with ample room for future growth.

The acquisition and the preferential issuance of units, amounting to approximately INR 613 Crore, are subject to the approval of unitholders and relevant regulatory bodies.

Mindspace REIT’s strategic investments continue to build a robust portfolio in India’s commercial real estate sector, driving value for its stakeholders and solidifying its leadership position in the market.