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K Raheja Corp-backed Mindspaces Business Park REIT (Mindspace REIT) plans to develop an 800,000 sq. ft. mixed-use project in Airoli at its existing business park in Airoli East. It will include commercial office spaces and a luxury hotel. Of this, 0.53 million sq ft is earmarked for office development and 0.28 million sq ft for an upper upscale Hotel on a long-term lease to K Raheja Corp group company, Chalet Hotels. The company signed the Memorandum of Understanding (MoU) with Chalet Hotels on October 30. It will allow K Raheja to foster business partnerships and tenant offerings.
During the current quarter, the company also successfully acquired 0.24 million sqft of leasable space at Commerzone Porur, Chennai, for Rs 182 crore. Additionally, it received approval from the Princeton Digital Group to commence the Second Data Centre at Airoli West Park.
Mindspace REIT recently reported a 17.7% increase in its net operating income (NOI), rising from Rs 417 crore to Rs 491 crore in the quarter ending on September 30, 2023. The company also achieved a remarkable 72.2% growth in its net consolidated profit for the quarter, with a profit after tax of Rs 150 crore in Q2 FY24, up from Rs 87 crore in Q2 FY23, as per the regulatory filing.
The company recorded a gross leasing of 0.8 million sqft in Q2 FY24, bringing the cumulative leasing in H1 FY24 to 1.1 million sqft. Re-leasing spread for Q2FY24 reached 9.7% on 0.7 million sq ft of area, and re-let and in-place rents increased by 6.4% year-on-year to Rs 67 per sq ft per month.
The company declared distribution of Rs 284 crore or Rs 4.79 per unit for Q2 FY24. Of this, 90% is in form of dividend, tax-exempt in the hand of unit holders.
Ramesh Nair, Chief Executive Officer of K Raheja Corp Investment Managers Private Limited, the Manager to Mindspace REIT, anticipates a growing demand for office spaces that prioritize design, sustainability, functionality, safety, and technology, and says that their team is well-prepared to meet these needs. Their recent GRESB rankings demonstrate their continued commitment to environmental, social, and governance (ESG) practices.
Mindspace REIT owns high-quality office portfolios in four key office markets in India, including the Mumbai Region, Pune, Hyderabad, and Chennai, making it one of the largest Grade-A office portfolios in the country. Their portfolio comprises 5 integrated business parks and 5 quality independent office assets with superior infrastructure and amenities. With over 200 tenants as of September 30, 2023, the portfolio boasts buildings that are either Gold or Platinum Green Building Certified (IGBC/LEED).
The total leasable area in Mindspace's portfolio amounts to 32.3 million sqft, including 26.1 million sqft of completed area, 2.9 million sqft under construction, and 3.3 million sqft of future development.
The assets developed by Mindspace offer a community-based ecosystem tailored to meet the evolving standards and demands of modern businesses, positioning them as a preferred choice for both multinational and domestic corporations.
India’s tech prominence and with growing office space demands from IT companies envisaging a return to the 5-day office week schedule, the demand for rental space is only going to increase. This demand coupled with Mindspace’s impressive financial performance, substantial leasing activity, and commitment to ESG practices further solidify its position as a prominent player in the Indian commercial rental market.
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