Mindpsace REIT buys 18.2L sq ft Hyderabad office complex for Rs 2,038 cr

Realty firm Mindspace Business Parks REIT has acquired Sustain Properties, which owns 18.2 lakh office space in Hyderabad, at an enterprise value of Rs 2,038 crore as part of its plan to expand rent-yielding portfolio.

Mindspace REIT will acquire 100 per cent equity in Sustain Properties Pvt Ltd at an equity value of Rs 613 crore.

The shareholders of Sustain Properties will be allotted units in Mindspace REIT as consideration. The deal is expected to close by the end of March.

In a regulatory filing, Mindspace REIT informed that the board has approved "acquisition of 100 per cent equity shareholding of Sustain Properties holding about 1.82 million (18.2 lakh) square feet of leasable area at 'Commerzone Raidurg', located at Raidurg, Hyderabad, from the shareholders of Sustain.

The office space has been leased to Qualcomm.

The board has approved the issuance of up to 16,168,090 units of Mindspace REIT, on a preferential basis, as consideration for acquisition at a price of Rs 379.08 per unit to the shareholders of Sustain Properties as consideration for the transfer of their 100 per cent equity shareholding.

While the equity value of the deal is Rs 613 crore, the enterprise value is Rs 2,038 crore. The company is taking debt of around Rs 1,400 crore.

Ramesh Nair, CEO of Mindspace REIT, said, "The acquisition of Commerzone Raidurg is a key milestone in Mindspace REIT's commitment to delivering value and growth for unitholders."  He said this Grade-A+, fully leased asset enhances the company's portfolio, boosts income stability, and aligns with the growth strategy.

"With a marquee tenant and mark-to-market potential, it reinforces our position as a leader in India's commercial real estate sector and reflects our focus on strategic investments in high-quality, income-generating assets," Nair said.

Recently, Mindpsace REIT reported an 8 per cent increase in net operating income (NOI) to Rs 521.8 crore for the quarter ended December 2024.

Its net operating income stood at Rs 473.1 crore in the year-ago period.

The company declared a distribution of Rs 5.32 per unit aggregating to Rs 315.48 crore for its unitholders.

The distribution comprises of dividend of Rs 3.20 per unit aggregating Rs 189.76 crore, interest of Rs 0.22 per unit, aggregating Rs 13.04 crore, repayment of SPV debt of Rs.1.88 per unit, aggregating Rs 111.48 crore and other income of Rs 0.02 per unit, totalling Rs 1.18 crore.

For the December quarter of 2024-25, the company has declared 11 per cent higher distribution than the year-ago period.

Mindspace Business Parks REIT, sponsored by K Raheja Corp group, was listed on the Indian bourses in August 2020. It owns office portfolios in the Mumbai Region, Pune, Hyderabad, and Chennai.

At the end of the third quarter, the company had a portfolio of 34.8 million (348 lakh) square feet comprising 26.8 million square feet of completed area, 4.6 million square feet area under construction and 3.4 million square feet of future development.