Mindspace becomes first Indian REIT to issue sustainability-linked bonds

Mindspace Business Parks REIT raises Rs 650 crore from the World Bank's International Finance Corporation

K Raheja-backed Mindspace Business Parks REIT on Tuesday announced that it has raised funds by issuing Sustainability-linked bonds worth Rs 650 crore from the International Finance Corporation (IFC). It became the first Indian real estate investment trust to issue such bonds.

The bonds have been issued for the tenure of seven years.

Wendy Werner, IFC country head for India said that this investment would help Mindspace enhance the sustainability of its portfolio of business parks and reduce greenhouse gas emissions year-on-year.

“This partnership aligns with India’s net-zero ambitions and demonstrates the viability of climate finance in the real estate sector,” he said. IFC is the private sector arm of the World Bank Group.

“This follows our maiden green bond issue in March 2023,” said Ramesh Nair, chief executive of Mindspace Business Parks REIT.  

“Post this issuance our cumulative green/sustainability linked financing now stands at Rs 1,860 crore, strengthening our commitment to responsible growth.”

The coupon of these bonds is fixed in nature and shall be stepped down, in a staggered manner, the basis of the achievement of the set targets. These include reduction in greenhouse gas emissions (Scope 1, 2 and 3), increasing the share of green certified area for existing buildings (under operations and maintenance), and reduction in energy intensity.

Mindspace Business Parks REIT reported a net profit of Rs 118.60 crore in the quarter ended March 2024 as against a net loss of Rs 29.20 crore during the quarter that ended in March 2023. The total sales rose 8.72 per cent to Rs 619.40 crore in the quarter ended March 2024 as against Rs 569.70 crore during the quarter ended March 2023.

For the full year, net profit rose 85.12 per cent to Rs 525.00 crore against Rs 283.60 crore during the year ended March 2023.

Mindspace Business Parks REIT was listed on the Indian bourses in August 2020. It owns quality office portfolios located in four key office markets of India, namely Mumbai, Pune, Hyderabad, and Chennai. It is one of the largest Grade-A office portfolios in India with a total leasable area of 33.2 msf.