Mindspace REIT's NOI up 9.2%, posts net loss of Rs 339 mn in Q4 FY23
ECONOMY & POLICY

Mindspace REIT's NOI up 9.2%, posts net loss of Rs 339 mn in Q4 FY23

Mindspace Business Parks REIT (Mindspace REIT) reported a net consolidated loss after tax of Rs 339 million for the three months ending March 31, 2023. The company reported a net consolidated profit after tax of Rs 1,336 million in the previous fiscal's corresponding quarter, according to a BSE filing.

The company's net consolidated income was Rs 5,723 million in Q4 FY23, up 19.90% from Rs 4,773 million in the same quarter the previous year. The governing board of K Raheja Corp Investment Managers LLP, Mindspace REIT's manager, approved a distribution of Rs 4.81 per unit, totaling Rs 2,852 million, which includes a dividend of Rs 4.37 per unit aggregating to Rs 2,591 million, interest of Rs. 0.43 per unit aggregating to Rs 255 million and other income of Rs 0.01 per unit aggregating to Rs 6 million.

Its net operating income (NOI) increased 9.2% year on year to Rs 4,364 million in Q4 FY23 and 13.2% year on year to Rs 17,101 million in FY23. In FY23, the company declared a distribution of Rs 11,327 million, or Rs 19.1 per unit, and saw gross leasing of c. 4.1 million sq ft, of which 2.5 million sq ft was new and vacant, and 1.6 million sq ft was re-leased.

As of March 31, 2023, its net debt was Rs 50,175 million, its net debt to market value was 17.9%, and its annual cost of debt was 7.6%. The company's committed occupancy increased by about 470 basis points to about 89%, re-leasing spread stood at 26.3% on c. 2.5 million sq ft of area re-let, in-place rents increased by c. 5.7% year-on-year to Rs 65.2 per sq ft per month during FY23.

Mindspace REIT raised Rs 5.5 billion through green bond issuance, accounting for 19.1% of total debt outstanding as of March 31, 2023. During the fiscal year 2022-23, it raised a total of Rs 15.4 billion through NCDs at the REIT and SPV levels.

The average cost of borrowing at the end of FY23 was 7.6%, while the REIT's net asset value (NAV) 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 investors presentation, the company re-leased 78% of FY23 expiries, and approximately 4-7% of the portfolio will expire over the next two years.

During the fourth quarter of fiscal year 23, the company recorded gross leasing of 0.6 million square feet and declared distribution of Rs 2,852 million or Rs 4.81 per unit, representing a 4.3% increase year on year. During the same quarter, Schlumberger re-leased 89,000 square feet in Commercezone Yerwada, Pune, and Technimont leased 67,000 square feet in Mindspace Airoli-West, Mumbai. The net loss, according to the company, is due to an exception item written off during the quarter in which it is redeveloping two buildings in Madhapur, Hyderabad. The project is expected to be completed in Q3 FY27 at a cost of Rs 7,411 million.

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Mindspace Business Parks REIT (Mindspace REIT) reported a net consolidated loss after tax of Rs 339 million for the three months ending March 31, 2023. The company reported a net consolidated profit after tax of Rs 1,336 million in the previous fiscal's corresponding quarter, according to a BSE filing. The company's net consolidated income was Rs 5,723 million in Q4 FY23, up 19.90% from Rs 4,773 million in the same quarter the previous year. The governing board of K Raheja Corp Investment Managers LLP, Mindspace REIT's manager, approved a distribution of Rs 4.81 per unit, totaling Rs 2,852 million, which includes a dividend of Rs 4.37 per unit aggregating to Rs 2,591 million, interest of Rs. 0.43 per unit aggregating to Rs 255 million and other income of Rs 0.01 per unit aggregating to Rs 6 million. Its net operating income (NOI) increased 9.2% year on year to Rs 4,364 million in Q4 FY23 and 13.2% year on year to Rs 17,101 million in FY23. In FY23, the company declared a distribution of Rs 11,327 million, or Rs 19.1 per unit, and saw gross leasing of c. 4.1 million sq ft, of which 2.5 million sq ft was new and vacant, and 1.6 million sq ft was re-leased. As of March 31, 2023, its net debt was Rs 50,175 million, its net debt to market value was 17.9%, and its annual cost of debt was 7.6%. The company's committed occupancy increased by about 470 basis points to about 89%, re-leasing spread stood at 26.3% on c. 2.5 million sq ft of area re-let, in-place rents increased by c. 5.7% year-on-year to Rs 65.2 per sq ft per month during FY23. Mindspace REIT raised Rs 5.5 billion through green bond issuance, accounting for 19.1% of total debt outstanding as of March 31, 2023. During the fiscal year 2022-23, it raised a total of Rs 15.4 billion through NCDs at the REIT and SPV levels. The average cost of borrowing at the end of FY23 was 7.6%, while the REIT's net asset value (NAV) 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 investors presentation, the company re-leased 78% of FY23 expiries, and approximately 4-7% of the portfolio will expire over the next two years. During the fourth quarter of fiscal year 23, the company recorded gross leasing of 0.6 million square feet and declared distribution of Rs 2,852 million or Rs 4.81 per unit, representing a 4.3% increase year on year. During the same quarter, Schlumberger re-leased 89,000 square feet in Commercezone Yerwada, Pune, and Technimont leased 67,000 square feet in Mindspace Airoli-West, Mumbai. The net loss, according to the company, is due to an exception item written off during the quarter in which it is redeveloping two buildings in Madhapur, Hyderabad. The project is expected to be completed in Q3 FY27 at a cost of Rs 7,411 million. Also Read 6 hydel power projects apply for water cess in Himachal Birla Estates buys 28.6 acre land in Bengaluru for housing development

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