MINDSPACE — earnings call
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Prepared remarks
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Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
TRANSCRIPT OF 4TH ANNUAL MEETING OF UNITHOLDERS OF MINDSPACE BUSINESS PARKS
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
Mr Bharat Sanghavi
Good afternoon, ladies and gentlemen.
Sanghavi, Compliance Officer of K Raheja Corp
Investment Managers Private Limited, Manager
to Mindspace REIT extend a warm welcome to all
unitholders to the 4th Annual Meeting of
Mindspace REIT held through electronic means
in accordance with the SEBI REIT Regulations,
2014 read with relevant circulars issued by SEBI
from time to time.
The facility to join the meeting
through electronic means has been made
available to unitholders.
The unitholders who
have joined this meeting are kept on mute by
moderator to avoid any disturbance during the
Before we proceed further, I would like
to introduce the Board members who have
joined this meeting:
Deepak Ghaisas, Independent Director and
Relationship committee and the Investment
committee and member of the Audit committee.
Ghaisas also will preside over this meeting in
his capacity as the Chairperson.
Bobby Parikh, Independent Director and
Chairperson of Audit committee and the NRC
and member of Risk Management Committee.
Non-Independent,
Non-Executive Director and member of the
Stakeholder Relationship Committee.
Vinod Rohira, Non-Independent, Non-
Executive Director and member of Risk
Management Committee.
Ms Manisha Girotra, Mr Manish Kejriwal and Mr
Raheja, Directors of the Company have
requested leave of absence due to their prior
With us, we also have Mr.
Nair, Chief Executive Officer and Ms.
Chheda, Chief Financial Officer of the Manager.
The representatives of the Trustee, Statutory
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
Auditors, Secretarial auditor and the scrutinizer
have also joined this meeting.
This meeting will
commence with the Chairperson addressing the
unitholders of Mindspace REIT and it will be
followed by a presentation by Mr.
on the operational and financial performance of
Mindspace REIT for the financial year 23-24.
During this meeting, if a unitholder faces any
technical issue, he or she may contact the
helpline number mentioned in the notice which
is 1800 309 4001.
I repeat, the helpline number
for resolving any technical issues is 1800 309
Mindspace Business Parks REIT have
engaged K Fin Technologies Limited for hosting
this meeting through electronic means and also
for providing remote E-voting and E-voting
At this meeting, Aabid & Co., Practicing
Company Secretaries have been appointed as a
scrutinizer to scrutinize the remote E-voting and
E-voting during the meeting to ensure that the
same is carried out in a fair and transparent
The notice of this meeting and annual
report for the financial year 23-24 along with the
login credentials have already been circulated to
the eligible unitholders.
The notice and the
annual report are also available on the website
of Mindspace REIT, BSE Limited and National
Stock Exchange of India Limited.
The cut-off date
fixed for identifying the unitholders who shall be
eligible to vote through the remote E-voting and
for participation and E-voting at this meeting was
Further, the facility of remote E-
voting in respect of the business to be transacted
at this meeting began at 09:00 a.m. on June 17,
2024 and ended at 05:00 p.m. on June 20, 2024
and has now been deactivated.
resolutions mentioned in the notice of the
annual meeting have only been circulated to put
to the vote, there will not be any proposing or
seconding of the resolution by any of the
appointment of a proxy in voting by a show of
hands is also not available for this meeting.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
The facility to express, view or ask questions
during this meeting was provided to unitholders
by registering themselves from 09:00 a.m. on
June 17, 2024 to 05:00 p.m. up to June 19, 2024.
commences, the moderator will announce the
names of the unitholders who have registered as
a speaker unitholders one by one.
who have not registered their names through
speaker registration can raise their queries
through a chat box during the meeting.
I hand over the proceedings of the meeting to
Deepak Ghaisas, Chairperson of this
Mr Deepak Ghaisas
Thank you Bharat.
Since quorum is present, I call
this meeting to order.
I approve and authorize
the commencement of the E-voting during the
meeting, which shall remain open till 15 minutes
after the conclusion of proceedings of this
I would request moderator to confirm
the opening of voting.
Moderator
Sir E-voting is active.
Mr Deepak Ghaisas
A very warm welcome to everyone to the
4th Annual Meeting of Mindspace Business Parks
At the onset on behalf of the Mindspace
REIT Board of directors, I would like to thank you
all for your continued trust, encouragement and
support to the Mindspace REIT and it’s
represented a substantial return to normalcy
deliberations on evolving workplace strategies.
There is a noticeable trend emerging in India
where offices are reclaiming their status as the
preferred work environments.
The shift underscores the increasing confidence
among the businesses and employees of the
benefits of office space for fostering the
nurturing a cohesive corporate culture.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
result, organizations are actively encouraging
their employees to return to the office.
is clearly demonstrated by the significant
increase in physical occupancy at our parks,
rising from under 55% at the end of March 23 to
70% as of March 24.
The upward trend reaffirms
the resurgence of offices as central hub for work
and highlights a positive momentum in the office
sector's recovery.
In financial year 2024, our business delivered a
operations for financial year 2024 excluding one
-offs grew by 13.7% year on year to Rs. 2,351
Our NOI for financial year 2024 grew by
11.9% year on year to Rs 1,896 crore excluding
As a result, for this strong performance,
we have delivered distribution of Rs. 1,136 crores
of Rs. 19.2 per unit for the full year of financial
During the financial year 23-24, we achieved a
gross leasing of 3.6 million Sq. ft.
year with a committed occupancy of 90.6%
excluding our Pocharam asset for which Board
has given approval for a potential divestment.
We added over 50 new tenants in portfolio since
listing, taking the total to over 220 tenants across
sectors like Information Technology, Banking &
Financial services, Telecom & Media, Engineering
& Manufacturing and healthcare amongst
As per reports from International
Property Consultants, calendar year 2023 was
the best year in terms of gross leasing and
second-best year in terms of net leasing for
commercial real estate in India.
western economies where the office demand
remains below pre Covid levels, the Indian office
market has experienced a robust recovery.
competitiveness, strong domestic growth and
positioned India as office to the world where
there has been a strong demand from global
captive centres (GCC) and domestic companies
across sectors.
The new special economic zone
demarcation rules notified by the government in
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
December 2023 have been welcomed by the
This provided a fillip to the sector and
will bring more tenants into the vacant spaces
and boost economic activity.
We continuously upgrade our parks to provide
top notch amenities and an exceptional client
This includes modernizing lobbies,
setting up diverse, high quality food courts and
enhancing facilities to create a welcoming and
productive environment.
Our goal is to meet the
evolving needs and preferences of our tenants,
ensuring their satisfaction and well-being.
Organizations today aim to provide best in class
work environment.
Post pandemic, there is a
shift towards high quality grade A asset managed
by the institutional asset managers who
maintain high safety and health standards with
wellness at work.
As a philosophy, we have
achieved gross leasing of over 3.5 million sq. ft.
to the 3rd consecutive year across our parks.
committed occupancy in 6 out of our 10 parks is
above 96% with Pune, Bandra Kurla Complex and
Malad nearing 100% occupancy.
The new Special
Economic Zone reforms are anticipated to boost
occupancy levels in our Airoli parks as well.
Currently we have 4.4 million sq. ft. under
construction to be completed over the next
three years and 2.5 million sq. ft. designed for
the future development.
During the year, we
made two strategic acquisitions to consolidate
ownership in our existing parks, adding 300,000
I am happy to inform that our REIT has
grown from 29.5 million sq. ft. at the time of
listing to 33.2 million sq. ft. at the end of financial
opportunities both within and outside the
Our sponsors new developments in key
office markets may offer Mindspace REIT further
growth opportunities.
Now let us look at the
financial performance for the financial year 23-
24, our revenue from operations for this year
grew by 13.7% YoY excluding one off to Rs. 2,351
Our Net operating income stood at
Rs. 1,896 crores recording a growth of 11.9% YoY
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
excluding the one-offs.
Our in-place rentals have
grown by 5.8% year on year to Rs. 69 per sq. ft.
We have distributed Rs. 1,136 crores
during the year that is Rs. 19.2 per unit which
translates an annualized distribution yield of
around 5.6% on the unit price as on the 31 March
Due to our prudent debt management strategy,
we have successfully maintained a low loan to
value ratio of 21.1% as of March 2024.
rated credit profile has enabled us to secure low
borrowing costs of around 7.8% as of March
During the financial year, we raised
aggregate of Rs. 1,490 crores through Non-
convertible debentures and Commercial Papers.
We aim to optimize our debt portfolio to
navigate the current interest rate environment
by maintaining a mix of fixed and variable cost
borrowings spread across varied maturities.
prudent approach to deploy capital bolstered by
a strong balance sheet and an optimum capital
structure coupled with ability to generate free
cash flow provides us with ample room for
This positions us well to create a sustainable
At Mindspace REIT, we are committed to
sustainability, creating vibrant spaces that
benefit the environment, communities and
Our dedication to sustainability is
reflected in our achievement with 99.9% of our
completed portfolio achieving atleast gold or
platinum ratings from Indian Green Building
environment design and 28.9% share of energy
from renewable sources.
It gives me immense pleasure to announce that
we became the first Indian commercial real
estate entity to be adjudged global listed sector
leader in 2023 Global real estate sustainability
Benchmark, that is the organization for office
development benchmark.
The REIT also ranked
first in Asia and placed 1/9 in India in the listed
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
company category for commercial business
The REIT has secured a prestigious five-star
rating for the second consecutive year, affirming
its leadership by achieving 100/100 in the
development benchmark.
Moreover, Mindspace
REIT impressively scored 91/100 in the Standing
Investment Benchmark, ranking 6th among real
estate peers across Asia with a 5-star rating.
Mindspace REIT has achieved great place to work
certificate for the third consecutive year.
actively promoting women to assume leadership
supported by initiatives like Sheroes which
provides a platform for women to advance their
careers with us.
I am pleased to announce that
37% of our senior management team is
comprised of women, a figure that stands among
the highest in our industry.
Transparency is a key
predominantly independent board.
publish our third ESG report in late June detailing
our ongoing initiatives and progress.
considering technology, real estate might not
immediately come to mind.
Contrary to this
belief, we at Mindspace REIT are the foremost of
adopting the technology for innovation and
For example, we used cutting edge
implosion technology to strategically demolish
two aging buildings in Madhapur Hyderabad,
achieving in 8 seconds what could have been
done or taken months otherwise.
We continuously explore the technological
advancements to streamline operations and
enhance tenant experiences.
We are looking at
upcoming artificial intelligence and getting ready
to adopt such emerging solutions to improve our
efficiency and the customer experience.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
Before I conclude, I want to express my
appreciation for the Mindspace team who
demonstrated agility and achieved outstanding
Financial Year 2024 marked a strong year
for us and we anticipate a continued and robust
demand that will bolster the industry.
REIT is committed to lead the charge in defining
the future of work, advance sustainability
initiatives, engage with communities and
cultivate rewarding careers for our employees
and deliver value for our stakeholders.
organization, we are united in pursuit of our
vision “to set benchmarks and office real estate
building sustainable ecosystems that prioritize
well-being, making us the first choice for the
On behalf of the board, I would also like to thank
all our valued stakeholders, including customers,
consistent and resolute co-operation and trust.
With a sustained trust in us and our able
leadership, we shall strive to deliver value for our
I seek your support and look
forward to continuing this journey of creating the
value in the times to come.
Now I would like to request
Ramesh Nair to make a short presentation on
the performance of Mindspace REIT for the
financial year 23-24.
Mr Ramesh Nair
Thank you Deepak.
In a snapshot, our total leasable area increased
to 33.2 million sq. ft.
Our in-place rent today is at
Rs. 69 per sq. ft.
Our same store committed
occupancy increased to 91.1%.
occupancy moved to 90.6%.
average lease expiry is at 6.8 years.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
market potential was at 9.2%.
The overall total
portfolio value of us today stands at Rs. 29,900
Crores and the market value of completed area
Now how does this translate to
A higher leasable area basically
means that higher dividends for unitholders.
Higher rentals and diversification also provide
more stable and predictable income.
rents lead to higher revenues and cash flows.
Higher occupancy rate means a greater
proportion of the REIT properties generating
Lower cost of debt means that the
REIT spend less on interest payments, which
leaves more cash flow available for operations &
investments and distribution.
Re-leasing spread
is positive releasing spreads, when a new lease is
done, we fetch higher rentals on that and a
higher portfolio market value which helps
benefiting unitholders because it positively
influences the market perception of the REIT.
Our distribution since listing, we have done a
gross leasing of 15 million sq. ft.
spread has been 20.7% since listing we have
delivered new products, new developments of
2.3 million sq. ft.
Our cost of debt at 7.8% p.a.p.m
is probably the lowest in the industry.
to market value which is 21.1% again probably
the lowest in the industry and since listing, our
in-place rentals have increased 7% CAGR over
This was our financial year 2024
Our occupancy increased to
Gross leasing was highest since listing i.e.
3.6 million sq. ft.
YoY NOI growth was at 11.9%.
Our distribution was at Rs. 11.4 billion and we
also applied for NPA conversion under new SEZ
reform for 1.9 million sq. ft.
This is a snapshot of
our financial performance which was supported
very well by our organic cash flows.
from operations increased by 13.7%.
operating income increased by 11.9% to
Rs. 1,895 Crores.
Distribution was at Rs. 1,136
Distribution per unit was at Rs. 19.2.
to value like I mentioned stands at 21.1% NAV is
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
at Rs. 380 per unit.
The cost of debt is 7.8% and
we are AAA rated.
Some of the key achievements
on strategic initiatives as well as sustainability,
we acquired 240,000 sq. ft. from our landlords
share in Commerzone Porur.
We also acquired
42,000 sq. ft. in Yerwada Commerzone.
redevelopment side, we started 3 million sq. ft.
of projects in Hyderabad.
On the sustainability
front we rank not only best in India but best in
Won various ratings from GRESB rating for
development for listed companies.
developing Mixed-Use asset in Mindspace Airoli
East, which is going to be a new building of
800,000 sq. ft. where we have also leased
300,000 sq. ft.
We also received approval for
selling our non-core asset at Mindspace
Pocharam in Hyderabad.
We also received on the
safety front 9 British Safety Council Sword of
This is some of our under-construction
projects and the progress we have one million
Sq. ft. coming by end of this year in Pune Kharadi
We also very soon will have our 50,000 sq. ft.
high street in Airoli East, our data centre close to
300,000 sq. ft. will be ready by early next year.
We also in Hyderabad have a building 1A-1B and
building 7/8 which would be ready by mid of
2026 and mid of 2027 respectively, and in
Hyderabad we also have state of the art
experience centre which would be ready towards
middle of next year.
This is some of how we have
upgraded our older buildings and this is how the
newer buildings look currently.
of the lobby images, some of the FNB and other
social amenities which we are providing in our
So, where do we see growth happening?
NOI growth can happen in two ways.
organic NOI growth which will happen one from
leasing up of vacant area of 2.4 million sq. ft. out
of which 80% is SEZ area.
The SEZ reforms will
help make this into non processing zones and will
help in leasing given that today the market is 90%
for non SEZ areas.
We also have 4.4 million sq. ft.
under construction and future development.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
We have another 2.5 million sq. ft. which is again
something which we are actively planning and
will soon be announcing development here.
are also selling the 600,000 sq. ft. non-core asset
This has helped to increase our
occupancy by 2%.
In a nutshell, what we believe is the market has
been supportive.
The overall Global Capability
Centres demand in the market and the demand
from domestic firms in the market is high.
SEZ said reforms has again helped us Navi
Mumbai evolving as a data centre hub.
four key markets where the REIT has a presence,
the locations have become very prime over the
years, especially the Hyderabad market and the
Madhapur market which have become in
Hyderabad, ten years back that location used to
international property consultants call that the
CBD of Hyderabad. 80% of all demand happens
in that market.
Nearly all the deals which
happen, 60% of the deals in that market is done
Hyderabad has very clearly emerged as
the second-best market in the country and today
it's the only location, Madhapur, where IT locates
and where the metro also ends.
market, Navi Mumbai, today, have all the
infrastructure initiatives.
Many of you would
have seen how the new airport is coming, the
trans harbour link has already been inaugurated,
all this is helping Navi Mumbai market and in
turn helping us.
We are seeing rental growth in
all the markets.
There is huge consolidation
happening in the industry which is also helping
A couple of years back, the biggest challenge
we had used to be office attendance of
employees of our clients.
That is again working in
Two IPC's put attendance rates in
India at 80% and 76%.
Month back, KPMG came
out with a study on Navi Mumbai and other
satellite cities, comparing them to other large
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
Navi Mumbai was rated amongst the top
three in terms of quality of talent, cost of talent
and also other aspects like cleanliness, traffic,
safety, attrition, cost of living.
On all these fronts,
Navi Mumbai was ranked again quite high.
terms of our parks again, we are re-energizing
our parks by upgrading them proactively.
experience centre which is coming up in
Hyderabad would be one of its kind in the
It will have the best club facilities which
any office park or office building will have in
We are very proactively investing in
landscaping and amenities.
You saw the various
achievements of ours on the ESG front and we
are investing significant amount of money in
employee engagement to make sure our clients
get back all their employees back into their
With that, I will hand it over to
Deepak once again.
Mr. Deepak Ghaisas
I would now request Bharat to
proceed with the meeting.
Mr. Bharat Sanghavi
The report of the auditors for the
financial year 23-24 does not contain any
qualification, observation or comment which
may have any adverse impact on the financial
reporting of the Mindspace REIT.
the said report is not required to be read out
before the meeting.
Now, I would like to appraise
the unitholders present at the meeting about the
resolutions proposed in the notice for the
unitholders approval by simple majority.
resolution- To consider and adopt the audited
standalone financial statement and audited
consolidated financial statement of Mindspace
REIT for the financial year ended March 31, 2024,
together with the reports of the auditors thereon
for the financial year ended March 31, 2024, the
reports on the performance of Mindspace REIT.
Second resolution- To consider and adopt the
valuation report issued by KZEN VALTECH Private
Limited, the valuer for the valuation of portfolio
of Mindspace REIT as of March 31, 2024.
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
consolidate, borrowing and deferred payments
of Mindspace REIT and its asset SPVs in totality
Mindspace REIT group net of cash and cash
equivalent up to 49% of the value of Mindspace
REIT Group assets.
Now I would like to invite the moderator to call
upon the names of the unitholders who have
registered themselves as a speaker for this
In case any questions are posed by
unitholders through ask a question facility or a
chat box, then the management would respond
to such questions after the meeting is over via
email to the respective unitholders.
further clarification is required, unitholders may
reach out to the Compliance Officer or Investor
Relations cell of the Manager of Mindspace REIT.
Moderator
We now call upon all the speakers
who have registered one by one.
our first speaker, Mr.
Gaurav Rozatkar we request
you to unmute your audio, switch on your
camera and proceed please.
Gaurav Rozatkar
we request you to unmute your audio, switch on
your camera and proceed please.
We now move on to our second
Celestian Elizabeth Mascarenhas
Celestian, we request you to unmute your
audio, switch on your camera and proceed
We now move on to our
third speaker, Mr.
Bharat Raj, we request you
to unmute your audio, switch on your camera
and proceed please.
Very good Afternoon Chairman, entire Board of
I am Bharat Raj attending from
Wonderful Chairman speech by
Deepak Ghaisas and Mr.
Nair gave a nice
One question Mr Nair, apart from
Hyderabad and Mumbai, we have plans to
expand our Mindspace in other part of the
Please let me know what is your future
plans in Bengaluru city.
Second question, I thank
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
for secretarial department for sending in time
link and wonderful CSR program.
when can we expect a dividend payout for our
shareholders in this financial year.
Once again Sir,
my best wishes for coming years.
All the best for
the coming years.
Thank you very much for giving
this opportunity.
Mr. Deepak Ghaisas
Thank you Bharat
We already have a significant presence in Pune
In Pune, we are the dominant
We have two of the best business parks in
that city with us and also a standalone project.
Last year, Chennai again saw one of the highest
gross leasing numbers and we were also
beneficiaries there.
Both our parks in Pune and
Chennai are nearly full.
We have roughly just
over 100,000 sq. ft. left to be leased.
bullish on both these markets.
With regards to
Bangalore, we actively look for proposals every
international property consultants, they get us
opportunities and we actively look at these
markets where we can grow.
Moderator
We have completed calling of the speakers.
There is no speakers left for the day I will proceed
with the following meeting, Sir.
Mr. Bharat Sanghavi
The proceedings of the meeting along with the
consolidated results of the remote E-voting and
E-voting during the meeting will be announced
within 48 hours of the conclusion of this
The said result along with the
scrutinizers report will be informed to the Stock
Exchanges as per the applicable law.
also be placed on the website of Mindspace REIT
and the Stock Exchanges.
Further, the transcript
of this meeting shall also be made available on
the website of Mindspace REIT.
I offer a vote of
thanks to the Chairperson on behalf of all the
Transcript of 4th Annual Meeting of Mindspace Business Parks REIT – June 21, 2024
unitholders, members of the board and invitees
present at the meeting, I now request
Deepak Ghaisas, the Chairperson to give his
closing remarks.
Mr. Deepak Ghaisas
The voting facility will remain
open for next 15 minutes to enable unitholders
to cast their vote, who have not yet cast their
vote on the resolution.
Further, I authorize any
one of the CEO, CFO or the Compliance Officer to
accept, acknowledge and counter sign the
Scrutinizers’ report in connection with the
meeting and declare the results of the voting in
accordance with the requirements prescribed
under the applicable laws.
I take this opportunity
to thank all the unitholders for taking the time to
join this meeting.
I thank Board members and
other invitees for attending this meeting.
take care of yourself.
Stay safe and stay healthy.
now announce the meeting as concluded.