Mindspace REIT will be the second REIT (after Embassy Office Parks REIT) to come out with in IPO after SEBI liberalised the rules regarding the REIT operations in 2018. Belonging to K Raheja group, Mindspace REIT will utilise part of the IPO proceeds for partial or full repayment or pre-payment of certain debt facilities of the Asset SPVs availed from banks/financial institutions.
Mindspace portfolio consists of five integrated business parks with superior infrastructure and amenities and five quality independent offices aggregating to 29.5 msf of total leasable area. Portfolio assets of Mindspace are well diversified across 172 tenants with no single tenant contributing more than 7.7% of the Gross Contracted Rentals. As of March 31, 2020, approximately 84.9% of the Gross Contracted Rentals were derived from leading multinational corporations and approximately 39.4% from Fortune 500 companies.
Between period April 2017 to March 2020, Mindspace leased 7.6 msf of office space and achieved average re-leasing spreads of 28.9% on 3.0 msf of re-leased space, leased 4.6 msf of new area (including Pre-Leased Area and Committed Area, as of March 31, 2020) to 60 tenants; achieved re-leasing spread of 23.1% for 1.1 msf of area are leased during fiscal year 2020. During this period Mindspace has also undertaken strategic renovations, such as lobby and facade upgrades and addition of cafes, food courts and boardwalks, at certain assets, to improve tenant experience – cumulatively invested Rs 737.0 million to renovate its Portfolio.
Interestingly, Mindspace REIT did not face significant disruptions in its operations from COVID-19 during the financial year ended March 31, 2020 and collected 99.4% of its Gross Contracted Rentals for the month of March 2020. Though the properties were not fully occupied by the tenants for the months of April and May 2020, it maintained and managed the properties throughout the lockdown to ensure business continuity and safety of tenants. Further, there was no significant decline in the rent receipts during these two months (collected 97.8% and 95.2% of the Gross Contracted Rentals for the months of April and May 2020, respectively). Committed Occupancy of the Portfolio was 92.4% and In-place Rent across Portfolio was Rs 52.5 psf as of May 31, 2020.