Mindspace REIT's NOI increased by 9.2% after a net loss of Rs 339 million in Q4 FY23

The Mindspace Business Parks REIT announced a net consolidated loss after tax for the quarter ended March 31, 2023, of Rs 339 million. In the equivalent quarter of the prior fiscal it had generated a net consolidated profit after tax of Rs. 1336 million. The net consolidated income for the company increased by 19.90% to Rs 5,723 million in Q4 FY23 from Rs 4,773 million in the same period the previous year.

A payout of Rs 4.81 per unit totalling Rs 2,852 million was approved by the K Raheja Corp Investment Managers LLP board of directors which oversees Mindspace REIT. This amount is made up of a dividend of Rs. 4.37 per unit totaling Rs. 2,591 million, interest of Rs. 0.43 per unit totaling Rs. 255 million, and other income of Rs. 0.01 per unit totaling Rs. 6 million.

Its NOI increased by 9.2% YoY to Rs 4,364 million in Q4FY23 and in FY23 it increased by 13.2% YoY to Rs 17,101 million. In FY23 the firm reported a distribution of Rs 19.1 per unit totalling Rs 11,327 million and 4.1 million square feet of gross leasing out of which 2.5 million square feet of new and unoccupied space was leased and 1.6 million square feet of space was re-leased. It had a net debt of Rs 50,175 million, a net debt to market value ratio of 17.9% and its annual debt cost was 7.6% as of 31 March 2023.

Mindspace REIT obtained Rs 5.5 billion through green bond issuance, accounting for 19.1% of total debt outstanding as of March 31, 2023. It raised a total of Rs 15.4 billion through NCDs at the REIT and SPV levels throughout the fiscal year 2022–2023.

The average cost of borrowing at the end of FY23 was 7.6%, while the REIT's net asset value increased by Rs 1.6 per unit from Rs 370.3 per unit on September 30, 2022, to Rs 371.9 per unit on March 31, 2023.

According to its investor’s presentation, 78% of the FY23 expiries were re-leased and over the next two years 4-7% of the portfolio will expire annually. The company reported 0.6 million square feet of gross leasing in Q4 FY23 and declared a distribution of Rs 4.81 per unit totalling Rs 2,852 million, representing a 4.3% increase YoY.

The company stated that the net loss was caused by the unusual item written off during the quarter where it is redeveloping two properties in Madhapur, Hyderabad. The project is anticipated to be finished in Q3 of FY27 with a projected construction cost of Rs. 7411 million. KRIT has suggested redeveloping Buildings 7 and 8 at Mindspace Madhapur in Hyderabad within the current fiscal year as the tenant were expected to vacate by March 23. Based on its evaluation of the opportunity and approval from the Telangana State Industrial Infrastructure Corporation (TSIIC) via letter dated March 31, 2023, the special purpose vehicle (SPV) sought to redevelop the mentioned buildings.

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Mindspace REIT's NOI increased by 9.2% after a net loss of Rs 339 million in Q4 FY23

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