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Mindspace Business Parks REIT reported a robust 9% increase in net operating income (NOI) to INR 496 crore for Q1 FY25, alongside an 11% revenue rise to INR 620 crore. The REIT announced a distribution of INR 300 crore to unitholders, marking a 5% year-on-year increase. Notably, the company leased over 1 million square feet and achieved a 91.1% occupancy rate. With ongoing projects and new SEZ space approvals, Mindspace is expanding its footprint, including a 1.5 million square feet addition at Airoli East Park. The REIT also issued INR 650 crore in sustainability-linked bonds, underscoring its commitment to sustainable finance.
Mindspace Business Parks REIT has announced its financial results for the first quarter of the current financial year, showing a solid performance with a 9% increase in net operating income (NOI) to INR 496 crore. The company also declared a distribution of nearly INR 300 crore to its unitholders for the April-June 2024 period, marking a 5% increase compared to the same quarter last year. Advertisement
In its recent regulatory filing, Mindspace reported a revenue increase of 11%, rising from INR 560 crore in Q1 FY24 to INR 620 crore in Q1 FY25. The growth in revenue and NOI is attributed to effective leasing strategies and an increase in occupancy across its portfolios. Ramesh Nair, CEO of K Raheja Corp Investment Managers, which manages Mindspace REIT, highlighted that the company rented out over 1 million square feet during this quarter, achieving a committed occupancy rate of 91.1%.
The performance of Mindspace's properties in Navi Mumbai has been particularly impressive, especially following recent reforms in the Special Economic Zone (SEZ) policies. This development has prompted the company to accelerate its plans for future projects, including an additional 1.5 million square feet at the Mindspace Airoli East Park to meet rising demand over the next 3-4 years. The company also plans to continue dealing with its existing projects, which consist of 4.4 million square feet under construction and another 2.3 million square feet of available space ready for leasing.
In the ongoing development landscape, Mindspace has shown a proactive approach to expanding its footprint. It received approval for an additional 500,000 square feet of SEZ space in Airoli West, which is expected to enhance its competitive position in the office market. With an average in-place rent reaching INR 70 per square foot, the REIT is experiencing steady growth across its parks.
On the financial front, Mindspace reported a low loan-to-value (LTV) ratio of about 21.9%, reflecting a stable balance sheet. The company successfully raised INR 1,500 crore at an effective interest rate of 7.80% per annum. This strong financial backing is vital for supporting future growth as it navigates the competitive real estate market. Notably, Mindspace has also become the first Indian REIT to issue sustainability-linked bonds, securing INR 650 crore from the International Finance Corporation (IFC), a member of the World Bank. This initiative underscores its commitment to sustainable financing practices.
The declared distribution of INR 299 crore, or INR 5.04 per unit, for Q1 FY25 will be processed shortly, with a record date set for August 2, 2024. Since its listing in August 2020, Mindspace has distributed approximately INR 4,231 crore to its unitholders, reflecting a solid track record in delivering returns.
As the office market continues to evolve, Mindspace Business Parks REIT appears well-positioned for future growth, driven by strong occupancy rates, ongoing project developments, and a focus on sustainable initiatives. The company's proactive management and strategic planning are likely to provide a stable path as it navigates the opportunities and challenges in the real estate landscape.
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