Mindspace REIT opens on July 27 – Everything you need to know!

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About Mindspace

Mindspace Business Parks REIT has a quality office portfolio in Mumbai, Hyderabad, Pune and Chennai. The business parks in Mumbai are Mindspace Airoli East Business Park, Mindspace Airoli West Business Park, Paradigm Mindspace Malad and The Square, BKC(2).

The properties in the Pune include Commerzone Yerwada Business Park, Gera Commerzone Kharadi Business Park and The Square, Nagar Road. The Chennai property of the company is Commerzone Porur. And, the office parks in Hydrabad are Commerzone Pocharam and Mindspace Madhapur.

The total leasable area of Mindspace Business Parks are 12.1 msf, 11.6 msf, 5.0 msf and 0.8 msf in Mumbai, Hyderabad, Pune and Chennai, respectively. With total leasable area of 29.5 msf, it is one of the largest Grade-A office portfolios in India.

The under-construction area of the company is 2.8 m sq ft. The future construction of Mindspace Business is spread across Hyderabad, Chennai, and Mumbai in a 3.6 m sq ft area.

Property Portfolio

Real Estate Investment Trust (REIT) Explained

Under the REIT Regulations Mindspace REIT has to invest a minimum of 80% of the value of its assets in completed and rent and/ or income-generating properties.

REIT Regulations also impose restrictions on certain investments including investments in vacant land, agricultural land, or mortgages other than mortgage-backed securities and assets located outside India.

As per REIT Regulations, the portfolio of the Mindspace REIT is required to be maintained for a period of minimum 3-years from the date of purchase or completion.


Cape Trading LLP and Anbee Constructions LLP are the promoters of the company.

Objects of Issue

The proceeds will be utilised towards the following objects:

1. Partial or full pre-payment or scheduled repayment of certain debt facilities of the Asset SPVs availed from banks/financial institutions (including any accrued interest and any applicable penalties/ premium); (Rs 9000 mn)

2. Purchase of NCRPS of MBPPL; and (Rs 334 mn)

3. General purposes

Issue Details

Opens July 27, 2020 and Closes July 29, 2020.

The price per unit is Rs 274-275

Minimum Lot is 200 Shares.

75% of the net offer is reserved for institutional investors and the rest 25% for non-institutional investors.

Issue Size is Rs 4500 Cr. (This  includes allotment to strategic investors of Rs.1125 cr. Hence net offer is Rs.3375 cr)

Proposed Mindspace REIT Structure (Portfolio Assets):

What is a Real Estate Investment Trust?

REITs, or real estate investment trusts, are companies that own or finance income-producing real estate in a range of property sectors. Modelled like mutual funds, REITs provide all investors the chance to own valuable real estate, present the opportunity to access dividendbased income and total returns, and help communities grow, thrive and revitalize. The stockholders of a REIT earn a share of the income produced through real estate investment – without actually having to go out and buy, manage or finance property. Most REITs operate along a straightforward and easily understandable business model: By leasing space and collecting rent on its real estate, the company generates income which is then paid out to shareholders in the form of dividends. REITs must pay out at least 90% of their net distributable cash flows.


Over the last two decades, India has emerged as a leading hub for technology and corporate services due to its favourable demographics, large talent pool and competitive cost advantage in providing high value-added services. This has led to an increased demand for quality office space from multinational as well as large domestic corporations. Our Portfolio is located in Mumbai Region, Hyderabad, Pune and Chennai (“Portfolio Markets”), which are amongst the key office markets of India and accounted for approximately 58.0% of total Grade-A net absorption in the top six markets in India, namely, Chennai, Mumbai Region, Pune, Hyderabad, Bengaluru and the National Capital Region (“Top Six Indian Markets”) during the fiscal year 2020 (Source: C&W Report). The Portfolio Markets have exhibited strong market dynamics with net absorption exceeding supply, resulting in low vacancy and rental growth between 2014 and Q1 2020 (Source: C&W Report). We believe that our assets are located in the established micro-markets of their respective Portfolio Markets, with proximity and/or connectivity to major business, social and transportation infrastructure. We have established a significant presence in our relevant Portfolio Markets. For instance, Mindspace Madhapur and Mindspace Airoli East are the largest business parks in their respective Portfolio Markets (Source: C&W Report).

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As of March 31, 2020, our Portfolio is well diversified with 172 tenants and no single tenant contributed more than 7.7% of our Gross Contracted Rentals. Furthermore, as of March 31, 2020, approximately 84.9% of our Gross Contracted Rentals were derived from leading multinational corporations and approximately 39.4% from Fortune 500 companies. Our tenant base comprises a mix of multinational and Indian corporates, including affiliates of Accenture, Qualcomm, BA Continuum, JP Morgan, Amazon, Schlumberger, UBS, Capgemini, Facebook, Barclays and BNY Mellon, as of March 31, 2020.

Our tenant base is well-diversified, with our top 10 tenants contributing 41.6% of our Gross Contracted Rentals, as of March 31, 2020, as set out below: 

Our Portfolio is stabilized with 92.0% Committed Occupancy and a WALE of 5.8 years, as of March 31, 2020, which provides long-term visibility to our revenues. Our focus on offering a comprehensive ecosystem through optimal density and well-amenitized parks to tenants that provide high value-added services has enabled our assets to outperform in their respective micro-markets. For example, at our Mindspace Airoli East and Mindspace Airoli West properties, we have achieved average power cost savings (approximately between ₹ 3.0 and ₹ 6.0 psf per month for fiscal year 2020) for our tenants through in-house distribution of power. Our Committed Occupancy is 240 bps higher than average occupancy in our Portfolio Markets, as of March 31, 2020, while rental growth has been approximately 320 bps higher for the last three fiscal years (Source: C&W Report).

Interesting Aspect of business

Leases in India are typically on a “warm shell” basis, resulting in landlords incurring limited tenant improvement capex. Tenants in India typically incur tenant improvement capex between ₹ 2,000 to ₹ 6,000 psf for fitting out the premises according to the nature of business activity and office location unlike other developed markets where landlords spend a significant amount of tenant improvement capex to attract and retain tenants. (Source: C&W Report) Since our tenants typically undertake significant tenant improvement capex at their own expense, they have higher “stickiness” due to high relocation costs.

Stable cash flows with contracted occupancy and escalations: The tenure of our leases is typically five to ten years, with an initial commitment of generally three to five years and renewal options post initial commitment period. While majority of our leases have rental escalations of 12.0% to 15.0% every three years, we have recently started leasing with rental escalations between 4.0% to 5.0% every year. In addition, we expect rent commencement from leased out space which is contracted, as of March 31, 2020, and has not generated rental income for the full year during fiscal year 2020, to contribute to the growth of our Portfolio. Over the Projections Period, Contracted & Others are expected to contribute approximately ₹ 2,917 million, or 40.2%, of the total increase in our net operating income (“NOI”), see “Projections” beginning on page 276.

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. As of March 31, 2020, our Portfolio has 92.0% Committed Occupancy. The vacancy of 8.0% is concentrated in three assets, Mindspace Airoli West, Gera Commerzone Kharadi, and Mindspace Madhapur, which respectively comprise 51.9%, 19.9%, and 12.8% of the total vacancy, as of March 31, 2020. Our vacant space is primarily concentrated in large blocks of contiguous space on an individual or multiple floors, which we believe could be attractive to larger tenants. Over the Projections Period, lease-up of existing vacancy is expected to contribute ₹ 1,544 million,

Covid Impact

As of May 31, 2020, Committed Occupancy of our

 Portfolio was 92.4% and In-place Rent across our Portfolio was ₹ 52.5 psf. We derive 99.4% of our Gross Contracted Rentals from leasing of office premises, and we have not seen a significant decline in the rent receipts during these two months (we have collected 97.8% and 95.2% of our Gross Contracted Rentals for the months of April and May 2020, respectively).

While the COVID-19 pandemic has affected majority of the industries, the industries that are being severely impacted by this pandemic include aviation, education, entertainment and events, food and beverage, co-working and hospitality (Source: C&W Report). During the months of March, April and May 2020, 1.0% of our Gross Contracted Rentals were attributable to these industries

Since April 1, 2020, we have leased 0.7 msf of area (of which 40.5% was leased to our existing tenants and 59.5% was leased to new tenants) including pre-committed 42,567 sf of area in our under-construction asset, Commerzone Porur. Also, we have not availed any deferments or moratoriums with respect to any of our financial commitments

Battling Covid

In response to the pandemic and in order to promote the health and safety of tenants and visitors to our properties, we have implemented various measures including restricting access and status check from the Aarogya Setu App, screening with thermal cameras and infrared thermometers, social distancing, disinfection of common areas and touch points, sanitization and hand wash stations, ambulance on standby, signages and helpdesks to provide information on protocols to be followed in our buildings, and isolation rooms to isolate employees with symptoms of COVID-19. We have also undertaken infrastructure initiatives for surface disinfection and hygiene initiatives such as vehicle disinfection, auto dispenser and biomedical waste disposal. Further, we are in the process of evaluating and implementing additional measures, such as upgrading the air conditioning system including ultra violet germicidal irradiation lights in air handling unit to further enhance the air quality and ultra violet surface disinfection in our properties. We have also equipped our maintenance staff with personal protective equipment and trained them in COVID-19 safety protocols. We are constantly working towards solutions that could further strengthen our COVID-19 containment measures and provide stakeholders at our properties with a safe working environment.


Our Portfolio comprises five integrated business parks and five quality independent offices, totaling 29.5 msf of Total Leasable Area, comprising 23.0 msf of Completed Area (of which 3.3 msf was achieved in fiscal year 2020), 2.8 msf of Under Construction Area and 3.6 msf of Future Development Area, as of March 31, 2020. Our park infrastructure, amenities, environment-friendly initiatives, and active asset management enable our tenants to provide their employees with a safe and efficient working environment. We believe this has resulted in Committed Occupancy of 92.0%, Same Store Committed Occupancy (that represents Committed Occupancy for the Portfolio for areas where occupancy certificate was received on or before March 31, 2019) of 96.5%, and growth of InPlace Rent across our Portfolio to ₹ 51.8 psf, as of March 31, 2020. In addition, over the last five fiscal years, we have added 7.5 msf of area, of which 3.3 msf was added in the fiscal year 2020, which includes 1.2 msf in Mindspace Madhapur, 1.3 msf in Gera Commerzone Kharadi, 0.7 msf in Mindspace Airoli East and Mindspace Airoli West and 0.1 msf of The Square, BKC.

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We provide core office-building infrastructure that includes dual source power supply with 24×7 power back up, building management systems, fire-fighting and security mechanisms and landscaped surroundings. The building amenities are designed to cater to the needs of our tenants and their employees and include food plazas, restaurants, crèches and several health and recreation facilities such as cafes, clubhouses, amphitheaters, gyms, outdoor sports arenas, recreational gardens and ambulance service.


Profit & Loss

Balance Sheet

Cash Flows

Experienced Management Team Backed by the KRC group

Mindspace REIT will be managed by the Manager led by Mr. Vinod Rohira, chief executive officer, and Ms. Preeti Chheda, chief financial officer. Mr. Vinod Rohira has been instrumental in leading the development of approximately 25.0 msf of commercial real estate for the KRC group, across India. Ms. Preeti Chheda has approximately 20 years of
experience, including 12 years with the KRC group, in equity and debt fund raising, acquisitions, overseeing the management of commercial real estate assets, raising private equity for real estate projects, investor relations and financial reporting.

Sponsors – Anbee Constructions LLP and Cape Trading LLP, which form part of the KRC group are one of the leading and reputed real estate developers in India with significant experience and knowledge of undertaking large-scale real estate developments across India. As of March 31, 2020, the KRC group has acquired and/or developed properties across various businesses (approximately 28.5 msf area of commercial projects, six operational malls, 2,554 operational hotel keys and residential projects across five cities in India). In addition, KRC group operates 278 retail outlets across India, as of March 31, 2020. The KRC group has approximately 40 years of real estate experience, and has a dedicated multi-skilled workforce of approximately 9,300 employees across its various real estate and retail businesses, as of March 31, 2020.

Projected Net Distributable Cash Flows (NDCF)


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JST Investments

JST Investments is a Mumbai-based investment firm that believes in long-term wealth creation. It's a brainchild of Aditya Kondawar, Aditya Shah, and Anish Moonka.
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