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Mindspace Business Parks REIT, known as Mindspace REIT, has executed a strategic acquisition, securing a substantial 2,41,694 square feet of leasable space within Commerzone Porur, Chennai. This bold move comes at a cost of Rs 181.60 crore, encompassing transaction expenses, equating to an attractive Rs 7,512 per square foot. Importantly, this acquisition serves a twofold purpose: consolidating the company's ownership of the project and expanding its presence in the thriving Chennai market. The commercial space is a testament to modern architectural prowess, featuring two blocks characterized by three basements, a ground floor, and a noteworthy nine additional floors. Collectively, these architectural marvels encompass a vast 1.13 million square feet of space, offering a premium environment for businesses to thrive.
Before this acquisition, Mindspace REIT controlled 0.883 million square feet of this grand structure, holding a substantial 78% undivided interest. The remaining 22% undivided interest, encompassing the leasable area of 2,41,694 square feet, was in the possession of RPIL Signalling Systems (RPIL). However, Mindspace REIT's strategic move now catapults it to a position of absolute control, boasting a 100% ownership stake in the entire project. Remarkably, this significant acquisition was facilitated through prudent financial measures, with the company effectively utilizing debt to fund this venture. Furthermore, it's noteworthy that no servicer fees were incurred during this acquisition process, further optimizing the company's financial approach.
Vinod Rohira, a distinguished board member of K Raheja Corp. Investment Managers and the manager of Mindspace REIT, lauded the transaction, emphasising its impact. He articulated that this transaction strengthens their presence in the Chennai market and creates value for their investors. With a low loan-to-value ratio, Mindspace REIT is well-positioned to explore new avenues of inorganic growth as they emerge. He also underscored the quality of the office property, positioned in a prominent micro-market in Chennai, catering to a prestigious clientele including global MNCs and domestic entities, thereby enhancing the company's leasing prospects. Mindspace REIT, part of the K Raheja Corp. group, went public in August 2020, marking a milestone in real estate investment trusts. Its portfolio covers major business hubs in Mumbai, Pune, Hyderabad, and Chennai, strategically positioned for growth.
This strategic acquisition augments the pro forma portfolio, amplifying its leasable area to a staggering 32.3 million square feet. This impressive portfolio encompasses 26.1 million square feet of completed space, with an additional 2.5 million square feet under active construction and a promising 3.7 million square feet designated for future development. Notably, this portfolio boasts a diversified composition, comprising five integrated business parks and five independent office assets, catering to a spectrum of business requirements. Mindspace REIT is in advanced talks with a multinational client to lease around 45,000 square feet in the new space, highlighting its strong leasing potential and portfolio enhancement.
This acquisition is poised to propel Mindspace REIT, expanding its total leasable portfolio area from 32.1 million square feet to an even more impressive 32.3 million square feet. Additionally, it contributes a noteworthy Rs 0.362 per unit to the net asset value of the overall portfolio, exemplifying the strategic foresight and value this move brings to the company's stakeholders.
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