Mindspace Business Parks REIT Sets Record with Over 2 Million Sq Ft Leasing in Q4

Mindspace Business Parks REIT has achieved a landmark in its leasing activities, recording gross leasing of over 2 million square feet in the quarter ending March 2024. This achievement marks the highest leasing volume since its initial public offering in August 2020, bringing its annual total to 3.6 million square feet for the financial year 2023-24.

Robust Financial Performance

The REIT reported a net operating income (NOI) increase of 9.3% year-over-year in the fourth quarter, reaching Rs 477 crore, and an annual growth of 11.9%, totaling Rs 1,896 crore for the year. The impressive quarterly figures are reflected in a revenue of Rs 594.8 crore, from which it distributed Rs 282.9 crore to its unitholders at Rs 4.77 per unit.

Strategic Occupancy and Expansion

Ramesh Nair, CEO of K Raheja Corp Investment Managers, which manages Mindspace REIT, explained that the firm's committed occupancy now stands at 90.6%. He highlighted the REIT's strategic initiatives including ongoing expansion projects totaling 4.4 million square feet, future development of 2.5 million square feet, and the potential to lease 2.4 million square feet of vacant area, positioning the REIT for significant growth in net operating income.

Leasing Dynamics and Future Prospects

During the quarter, Mindspace REIT re-leased 1.1 million square feet and leased new and vacant areas. The average monthly lease rent was Rs 65 per square foot. Looking ahead, the REIT has visibility for re-leasing 2 million square feet, or 70% of its expiring portfolio in FY25. The strategic divestment of Mindspace Pocharam, a non-core asset, is expected to improve overall occupancy by 2%.

Inorganic Growth Opportunities

Beyond the growth from its current projects, Mindspace REIT is exploring third-party inorganic opportunities to further enhance its portfolio. This proactive approach aims to leverage potential market opportunities and strengthen its position in the commercial real estate sector.

Conclusion:

Mindspace REIT's record performance in Q4 underscores its strong market position and strategic foresight in commercial real estate. The significant leasing activity, combined with robust financial growth and strategic expansion plans, suggests a promising outlook for the REIT. By focusing on both organic growth through development and potential inorganic opportunities, Mindspace is well-positioned to capitalize on the dynamic real estate market and deliver sustained value to its stakeholders.