Mindspace Business Parks REIT · NSE:MINDSPACE.RR
Mindspace Business Parks REIT — IPO Roadshow (August 2020)
38 slides from Mindspace Business Parks REIT's IPO roadshow presentation, August 2020
Slide 1: Mindspace Business Parks REIT
Mindspace Business Parks REIT s August 2020 mindspacereit.com 1
Slide 2: Disclaimer
Disclaimer By attending the meeting where this presentation (the “Presentation”) is made, or by reading the Presentation materials, you agree to be bound by the following limitations: This Presentation is strictly private and confidential and is intended exclusively for the intended recipients. This
Slide 3: Presenters
Presenters Ravi Raheja Neel Raheja Vinod Rohira Preeti Chheda • Group President at K Raheja • Group President at K Raheja • CEO, K Raheja Corp Investment • CFO, K Raheja Corp Investment Corp (KRC group) Corp (KRC group) Managers LLP Managers LLP • 23+ years of experience • 21+ years of experience •
Slide 4: Sponsored by one of India's leading real estate players
Sponsored By One Of India’s Leading Real Estate Player 4 Pan India 9,300+ Decades of Expertise Presence Employees Office Hospitality Malls Residential Retail 2,554 operational Hotel Developed residential Operates 278 retail outlets Developed >28.5 msf 6 operational malls keys projects across 5 citie
Slide 5: Portfolio Overview
Portfolio Overview Mindspace REIT is one of the largest Grade-A office portfolios in India 29.5 msf 3.3 msf Total Leasable Area (1) Completed since Jun’19 92.0% 96.5% Committed Occupancy Same Store Committed (On Completed Area) Occupancy Pune (16.9%) Mumbai Region (41.1%) Hyderabad (39.3%) 94.0% 22.
Slide 6: Five Integrated Business Parks
Five Integrated Business Parks Mindspace Madhapur Mindspace Airoli East Hyderabad | 10.6 msf Mumbai Region | 6.8 msf Largest Business Park Largest Business Park in Hyderabad in Mumbai Region Mindspace Airoli West Gera Commerzone Kharadi Commerzone Yerwada Mumbai Region |4.5 msf Pune| 2.6 msf (1) Pun
Slide 7: Five Quality Independent Office Assets
Five Quality Independent Office Assets Commerzone Porur Paradigm, Mindspace Malad Chennai | 0.8 msf (1) Mumbai Region | 0.7 msf The Square, BKC The Square, Nagar Road Mindspace Pocharam Mumbai Region | 0.1 msf Pune | 0.7 msf Hyderabad | 1.0 msf Note: Above areas include Under-Construction Area and F
Slide 8: Portfolio of Market Leading Office Assets With Significant Embedded Growth
Portfolio of Market Leading Office Assets With Significant Embedded Growth Strong industry fundamentals • Located in India, a leading hub for corporate & technology services • Multinational corporates drawn to highly skilled, English speaking workforce and cost advantage • Track record of robust off
Slide 9: Covid-19 Impact and Drivers of Medium / Long Term Demand
Covid–19 Impact and Drivers of Medium / Long Term Demand Large consolidations will get deferred due to Preference to operate from secured office restricted capex allocation environments; Concerns on data security in Work from Home MEDIUM TO LONG TERM POSITIVES Uncertainty of demand for larger space
Slide 10: Resilience To Impact Of Covid-19
Resilience To Impact Of Covid-19 Mindspace Resilience Maintained operational efficiency throughout the lockdown to ensure business continuity & safety for tenants 97.5% Average Gross Contracted Rentals collected for March, April & May 2020 1.0% Gross Contracted Rentals from industries severely (1) i
Slide 11: High Standards of COVID-19 protocol at our Parks
High Standards of COVID-19 protocol at our Parks Strong commitment to provide a safe working environment for our tenants • Screening - Thermal cameras / Infrared Thermometers • Status check from Aarogya Setu App for all entering the Parks • Regular Cleaning & sanitization - common areas & touchpoint
Slide 12: Reforms and monetary easing to revive growth
Reforms and monetary easing to revive growth Government focus on reforms and supportive monetary policy augur well for long term growth Services sector remains largest growth contributor Reducing policy rates and surplus liquidity in banking system(2) % split of GVA (1) (FY 19) Since Mar’ 2015 (USD
Slide 13: Making India World Leader in Technology Services
Competitive Advantage Making India World Leader in Technology Services Due to the availability of skilled talent and significant cost advantage, India has attracted high value added service providers Young population Stem Workforce Skilled talent pool Cost advantage 333 MM+ 2.6 MM 2nd 81% Population
Slide 14: Favorable Long Term Demand Supply Dynamics in Portfolio Markets
Favorable Long Term Demand Supply Dynamics in Portfolio Markets Contraction in supply to partially offset any near term impact on the demand Trends msf / (%) Supply and Absorption in 2019 have been the highest in last 10 years 17.2% 25.8 25.5 23.2 22.4 21.3 13.1% 20.0 13.0% 12.2% 12.5% 18.4 11.8% 17
Slide 15: Multinational Tenant Base
Multinational Tenant Base Mindspace REIT is a partner of choice for leading MNCs and Fortune 500 companies Technology Financial Services Diversified Accenture Facebook Fiserv Continuum Barclays Qualcomm 84.9% 41.6% 39.4% Share of foreign MNCs in Share of top 10 tenants in Share of Fortune 500 (1) re
Slide 16: Diversified quality tenant base
Diversified quality tenant base Credible tenant base with low concentration (no single tenant has more than 7.7% share) Diversified tenant mix across sectors Top 10 tenants Gross Contracted Rentals contribution (41.6%) % split by Gross Contracted Rentals ‘% of total Gross Contracted Rentals (1) # of
Slide 17: Growth Through Repeat Business And Focused Addition Of New Tenants
Growth Through Repeat Business And Focused Addition Of New Tenants 7.6 msf leased since April’17, including 3.0 msf at 28.9% Re-leasing Spread New Area Leased Existing Area re-leased % split by area (1) % split by area (2) (3) 0.7 msf leased since April 01, 2020 New Tenant 15.4% Existing 4.6 msf Ten
Slide 18: Long Term Tenant Relationships
Long Term Tenant Relationships Our tenants have grown multi-fold within our portfolio Increase in leased area (1) occupied by certain key tenants (msf) Business and technology Accenture services company Qualcomm 1.88 1.25 1.02 0.12 0.16 0.03 2005 Mar-20 2010 Mar-20 2006 Mar-20 IT Solutions and servi
Slide 19: High Tenant Stickiness
High Tenant Stickiness Significant Tenant Improvement capex by tenants and upfront security deposits improve tenant stickiness and cash flow from the assets Tenant Improvements paid by landlord Examples of fit outs by our tenants as % of rental revenues 10%-20% 75% – 95% lower TI capex 2%-5% US Real
Slide 20: Integrated Business Parks Offering Efficient Work Environment
Integrated Business Parks Offering Efficient Work Environment Mindspace’s optimal density, well amenitized, transit-linked parks provide a socially distanced environment for its tenant base Building ecosystems catering to the needs of quality workforce Occupier focused management initiatives Outdoor
Slide 21: Focus On Sustainability and Safety
Focus On Sustainability and Safety Sustainable Development High Safety and Quality Standards(2) 32 16.2 100% of the green buildings are Green Gold or Platinum Rated Msf (1) Buildings (1) Organic Farming Solar Captive Power Generation ✓ Mindspace Airoli East ✓ Mindspace Airoli West ✓ Mindspace Madhap
Slide 22: Portfolio With Stability In Cash Flows And Strong Embedded Growth
Portfolio With Stability In Cash Flows And Strong Embedded Growth Contracted Revenue Embedded Growth Inorganic Growth ✓ Same Store Committed ✓ MTM Potential of 22.6% ✓ Identified ROFO assets (8.6 Occupancy of 96.5% with msf across 3 assets) strong tenant retention ✓ Well spread lease expiry profile
Slide 23: Stable NOI Growth
Stable NOI Growth Visible NOI growth primarily driven by contracted occupancy in the Portfolio NOI bridge INR MM 59.2% Increase 1,724 1,072 1,544 2,917 19,514 12,257 FY20 Contracted(1)(2) Lease-up of MTM opportunity Lease-up of under FY23 & Others vacant area construction area USD MM(3) $163 $39 $20
Slide 24: Snapshot of Key Under Construction Buildings to be Completed by FY 2022
Snapshot of Key Under Construction Buildings to be Completed by FY 2022 Construction completed since Jun’19 (1) Mindspace Madhapur B12D, Hyderabad Gera Commerzone Kharadi (B3), Pune Gera Commerzone Kharadi (B6), Pune Leasable area: 1.2 msf Leasable area: 0.5 msf Leasable area: 0.8 msf In addition, r
Slide 25: ROFO Assets To Add Further Scale And Growth
ROFO Assets To Add Further Scale And Growth Strong pipeline spread across Mumbai Region, Chennai and Hyderabad Mumbai Region | 5.0 msf 3 currently Mindspace Juinagar identified assets Status: • Completed: 0.8 msf(1) • UC/Future Development: 4.2 msf Current Perspective 8.6 msf Chennai | 1.8 msf total
Slide 26: Our Assets Have Outperformed The Markets
Our Assets Have Outperformed The Markets Portfolio has achieved robust rent growth and stable committed occupancy Completed area & Committed Occupancy In-place rents Area (msf) / Committed Occupancy (%) (1) INR psf 99.1% 95.7 99.1 96.7 96.5% 51.8 96.7% 23.0 96.8% 48.3 95.9% 19.7 92.0% 19.4 45.4 18.1
Slide 27: Well Spread Lease Expiry Profile With Significant MTM Potential
Well Spread Lease Expiry Profile With Significant MTM Potential Diversified lease expiry with prospective inroads for higher rents in future Area expiry – YoY In-place rent vs Market Rent (3) msf INR psf 54.9 1.8[1] 63.5 48.5 45.2 54.9 2.0 51.8 (1) 1.8 1.8 FY21 FY22 FY23 In-place rent Market Rent Ex
Slide 28: Demonstrated Track Record Of Achieving Higher Rentals At Renewals
Demonstrated Track Record Of Achieving Higher Rentals At Renewals Achieved 28.9% average re-leasing spreads on 3.0 msf area re-leased since April’17 Area Re-leased Re-leasing spread at Commerzone Yerwada, Pune msf INR psf (322k sf re-leased since April’17) 1.2 69.5 1.1 52.4 0.7 Rent at expiry Rent o
Slide 29: De-Risked Portfolio with Staggered Development Pipeline
De-Risked Portfolio with Staggered Development Pipeline 94.0% of the Market Value derived from Completed Area and OC Applied Area(1) Historical development and expansion potential of our Portfolio (FY 2016-FY2022E) Completed Assets forming > 90% of msf the Market Value of Real Estate(1)(2) Split by
Slide 30: Snapshot Of Financial Estimates
Snapshot Of Financial Estimates Delivered on Projected NOI of INR 12.0 Bn for FY 2020 CAGR INR MM FY 2018A FY 2019A FY 2020A FY 2021E FY 2022E FY 2023E (FY20-23) Revenue from Operations (1) 12,616 14,103 15,501 17,141 21,080 24,023 16% NOI 9,867 11,083 12,257 13,487 17,074 19,514 17% % of total reve
Slide 31: Strong Balance Sheet with Significant Headroom for Debt
Strong Balance Sheet with Significant Headroom for Debt Capital structure with all interest bearing debt with no immediate refinancing requirement Significant debt headroom CRISIL Corporate Credit Rating of Debt to Market Value post listing (2) (%) “Provisional CCR AAA/Stable” (1) All debt to be int
Slide 32: Focus On Keeping Low Management Fees
Focus On Keeping Low Management Fees Embassy CapitaLand Suntec Keppel Maple Ascendas REIT(1) Commercial Tree(2) REIT(2) REIT(2) (2) India Trust(3) 0.1% of 0.25% of 0.3% of 0.5% of 0.5% of Base Fees Nil Nil Gross Asset Gross Asset Gross Asset Gross Asset Gross Asset Value Value Value Value Value REIT
Slide 33: Focus On High Corporate Governance Standards
Focus On High Corporate Governance Standards Strong governance framework complemented by partnership with leading institutional investors Regulatory Requirements Mindspace REIT: Top-Notch Standards Six Member Board and Independent Chairman • 50% independent directors on the Board Manager • Manager c
Slide 34: Governing Board Of The Manager
Governing Board Of The Manager Deepak Ghaisas Manisha Girotra Bobby Parikh Chairman Independent Director Independent Director Experience Experience Experience • Director of Gencoval Strategic Services Pvt Ltd • Chief Executive Officer of Moelis India • Chartered Accountant and graduation from Univer
Slide 35: Longstanding Execution Track Record and Institutional Experience
Longstanding Execution Track Record and Institutional Experience Partnerships with leading Experience of 2 listed companies institutional investors • Listed Shoppers Stop in 2005 • Strong experience of working with Blackstone institutional investors across multiple • Listed Chalet Hotels in 2019 off
Slide 36: Investment Summary
Mindspace REIT | Investment Summary One of the Largest Grade A Office Portfolios in India Stability in Cash flows, High Quality, Large Scale Embedded Growth 29.5 msf Total Leasable Area across key Indian office markets 22.6% MTM, contracted escalations, strong development pipeline Long-term Tenant R
Slide 37: Experienced Management Team
Experienced Management Team Vinod Rohira Preeti Chheda Shivaji Nagare Sudarshan Malpani(1) Chief Executive Officer Chief Financial Officer Senior VP – Projects Senior VP – Leasing Experience Experience Experience Experience • 20+ years of experience • 20+ years of experience • 27+ years of experienc
Slide 38: Key Definitions
Key Definitions Compounder Annual Growth Rate (CAGR) (Last Period Value/Start Period Value)^(1/no. of years)-1 Occupied Area + Committed Area Committed Occupancy (%) Completed Area Same store occupancy represents committed occupancy of the portfolio as at respective period-ends for areas where occup
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