You are here » Home » Companies » Company Overview » Mindspace Business Parks REIT

Mindspace Business Parks REIT.

BSE: 543217 Sector: Infrastructure
NSE: MINDSPACE ISIN Code: INE0CCU25019
BSE 00:00 | 26 Nov 331.68 5.95
(1.83%)
OPEN

325.00

HIGH

333.00

LOW

325.00

NSE 00:00 | 26 Nov 331.22 4.91
(1.50%)
OPEN

325.00

HIGH

333.00

LOW

325.00

OPEN 325.00
PREVIOUS CLOSE 325.73
VOLUME 4295
52-Week high 348.00
52-Week low 275.16
P/E 17.49
Mkt Cap.(Rs cr) 19,669
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 325.00
CLOSE 325.73
VOLUME 4295
52-Week high 348.00
52-Week low 275.16
P/E 17.49
Mkt Cap.(Rs cr) 19,669
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mindspace Business Parks REIT. (MINDSPACE) - Chairman Speech

Company chairman speech

Resilient performance at every level

We remain committed "to delivering long-term sustainable value. Our portfolio isgeared to attract top tenants in the fast-growing technology landscape of India as weprioritize health and safety and set new goals for sustainability"

Vinod Rohira

CEO

Dear Unitholders

It is my pleasure to present to you our first Annual Report. We are proud todemonstrate our ability to adapt work cohesively with all our stakeholders and deliverthe targeted results in these unprecedented times. We continue to focus on creatingwin-win solutions across verticals and look forward to coming out much stronger post thepandemic.

SUCCESSFUL LISTING ON STOCK EXCHANGES AND STABLE UNIT PRICE PERFORMANCE

Our successful listing on the bourses in August 2020 amidst the pandemic reflectsinvestors' trust and confidence in the Sponsor and the underlying resilient businessmodel. Our IPO book saw an overwhelming response as it was oversubscribed c.13x withmarquee global investors participating in the offering. Units of the REIT were offered atRs.275 per unit and closed at Rs.294.87 as on March 31 2021.

BUSINESS ENVIRONMENT

Commercial real estate saw demand softening through FY21 as a result of the ongoingpandemic. However rentals in our micro-markets largely remained stable. In 2021 weexpect new supply in our micro-markets to remain in check. The current demand environmentis expected to extend further for at least 2-3 quarters.

Even in the given environment with the help of cutting-edge technology India has beenon the forefront of delivering services. NASSCOM research suggests the technology servicesindustry is estimated worth $194 billion in FY21 and has seen net hiring remain robusteven during the pandemic. Most GCCs and GICs are looking at an increased workforce that isrequired to deliver the need for services. As the world is moving towards a digitaleconomy Indian IT sector is poised for a robust decade. This is expected to lead to arenewed demand for Grade A office spaces once the normalcy returns.

The definition of Grade A office spaces is evolving as we speak. Increased focus onhealth and safety stronger tenant connect and sustainable buildings with resourceefficient operations and are becoming the key norms.

RESILIENT OPERATIONAL PERFORMANCE

We achieved gross leasing of 3.5 msf across 44 tenants at an average rent of Rs.69 psfduring FY21. Gross leasing includes re-leasing of 2.2 msf at a re-leasing spread of 19.1%;53.5% of our gross leasing was to existing tenants while balance 46.5% was to new tenants.New clients added to the portfolio include marquee names such as AGC Mindcrest ADP BPGlobal among other Committed occupancy of our portfolio stood at 84.2% as on March 312021. While physical occupancy continues to remain low we have efficiently utilized thisdowntime to refine our assets to provide re-energized experience along with new andenhanced health and safety protocols. The first phase is substantially complete and weare ready with all options providing the best offerings and flexibility for our tenants.

FORAY INTO DATA CENTER DEVELOPMENT

Our thorough and efficient research has enabled us to design right solutions to caterto the top data center demand coming into India. We have successfully entered intoagreement to lease with Princeton Digital one of the leading data center operators inAsia for leasing 0.63 msf at Mindspace Airoli (West) Mumbai Region. With increasedinternet usage growing demand for data storage and anticipated data localization normsMumbai stands to benefit due to its geographic and infrastructural advantage. Thegovernment's ‘Digital India' initiative and the ongoing pandemic have furtheraccelerated digitization. We believe data center offers an excellent long-term opportunityto diversify our income avenues.

STABLE FINANCIAL RESULTS DESPITE MACRO HEADWINDS

Mindspace REIT's Revenue from Operations and Net Operating Income for FY21 stood atRs.16.3 billion and Rs.13.7 billion on pro forma basis growing by 5.1% and 12.1% y-o-yrespectively. We maintained NOI margins of over 80% on the back of top-line expansion andcost optimization initiatives. We declared our first distribution for the first fullquarter post listing which was quarter ending December 31 2020 (as stated in our offerdocument). We declared distribution of Rs.9.59 p.u. per unit in H2 FY21 which translatesto an annualized yield of 7.0% on the IPO issue price of Rs.275 per unit.

PRUDENT CAPITAL MANAGEMENT

We place great emphasis on prudent capital management and deployment helping usachieve a significant reduction in our cost of borrowing. Weighted average cost ofborrowing of our portfolio remains low at 7.1% p.a.. Our low loan-to-value ratio of 14.0%offers us financial flexibility to pursue value accretive growth opportunities. During theyear we broad based our lender universe from banks to mutual funds and other capitalproviders. We re-financed part of the borrowings at Asset SPVs by raising fixed costnon-convertible debentures (NCDs) and market-linked debentures (MLDs) at REIT level. As apart of our green initiative we also raised Green Loan for one of our projects at Pune.

DRIVING OUR SUSTAINABILITY AGENDA

We continue to focus on seamlessly weaving sustainable environmental social andgovernance practices in our operations. Our continuous endeavour is to positivelycontribute towards the ecosystem we operate in.

On the environment front we are working towards strengthening resource efficiency tominimize our carbon footprint. Key sustainability initiatives include a constant drive toachieve energy efficiency improved air quality management focus on renewable energywater conservation and recycling measures etc. This has led to encouraging outcomes suchas 14-36% energy savings in our Green buildings over the baseline case c.30% more freshair at most of our Green buildings over ASHRAE standard - 62.1-2004. During the year webecame the first real estate entity in India to commit to the Climate Group's EV100initiative with a target to achieve 100% electric mobility by 2030 at all our properties.

On the social front we continue to build a culture of safety and inclusivity for ouremployees tenants and society around us. We are committed to providing our employees witha nurturing and growth-oriented work environment. Our initiatives such as"ReachOut" for mental health and wellbeing and "Ekincare" an app baseddoctor consultation are aimed at ensuring wellbeing of our employees. We ensuredavailability of food adequate medical aid and sanitized living spaces for labor at oursites. We are working with various government organizations for specific projects for theimmediate need of COVID-19 patients. We partner with NGOs on education and health relatedprograms. We continue to actively support makeover of Durgam Cheruvu Lake at Hyderabad tocreate a working and active waterfront. We believe a firm governance structure plays apivotal role in managing our business. The various processes policies and trainings setthe foundation for delivering on our ESG priorities and assessing the way forward for thebusiness.

RECOGNITION OF OUR EFFORTS

I take pride in the ability of Mindspace REIT's team in consistently deliveringresults. We have been able to win many accolades with their focused efforts. Our effortshave been recognized by the internationally renowned British Safety Council with theCOVID-19 Assurance Statement issued to six of our assets.

LOOKING AHEAD WITH CAUTIOUS OPTIMISM

Our first priority continues to be the health and safety of our employees and tenantswhile adhering to all the safety protocols across our parks. I admire the efforts of ouron-ground support staff who have worked tirelessly to ensure business continuity for ourtenants. While I write this letter the Indian government has started to ramp-up therollout of COVID-19 vaccines across the country. Getting majority of population vaccinatedand achieving a significant drop in COVID-19 cases will be an important step towards thereturn to normalcy. We expect India shall remain at the forefront of deliveringcutting-edge technology services driving the demand for Grade A office spaces oncenormalcy returns.

ACKNOWLEDGING THE SUPPORT OF OUR STAKEHOLDERS

I also take this opportunity to express my sincere gratitude to the Governing Board ofK Raheja Corp Investment Managers LLP for their thought leadership our unitholderstenants employees and other stakeholders for their unflinching support. We look forwardto creating value together in the years to come.

Stay safe stay healthy.

Best Regards

Vinod Rohira

CEO.

.