Mindspace REIT Expands Portfolio with Acquisition of Office Spaces in Mumbai and Pune for Rs 2,916 Crore

Mindspace Business Parks REIT has expanded its portfolio by acquiring three key commercial properties from K Raheja Corp for Rs 2,916 crore. This acquisition will increase Mindspace REIT's total commercial space from 38.2 million square feet to 39 million square feet. The company announced this acquisition in a regulatory filing, highlighting the strategic importance of these assets.

Acquisition Details and Financial Strategy

The Board of Mindspace REIT's Manager has approved the acquisition and a preferential issue of units worth up to Rs 1,820 crore, pending unitholder and regulatory approvals. Additionally, the company will take on liabilities of nearly Rs 1,100 crore, including Rs 970 crore in debt. These financial moves are part of a broader strategy to enhance their asset base.

Mindspace REIT acquired Pramaan Properties Pvt Ltd, which includes 0.45 million square feet of commercial space in Worli, Mumbai, and an office building covering 0.1 million square feet in Pune. Sundew Real Estate Pvt Ltd was also acquired, adding approximately 0.2 million square feet of premium office space in Mumbai. Together, these acquisitions contribute around 0.8 million square feet of leasable area.

Valuation and Strategic Importance

The gross acquisition price for these properties is Rs 2,916 crore, reflecting a 6.1% discount compared to the average valuation by two independent valuers. Ramesh Nair, MD and CEO of Mindspace REIT, stated that incorporating these assets into their portfolio strengthens their presence in Mumbai's prime CBD office districts. He emphasised the quality and strong cash flows of these institutional assets.

Mindspace REIT's existing portfolio includes five integrated business parks and six independent office assets across Mumbai, Pune, Hyderabad, and Chennai. The company's strategy focuses on investing in prime locations and collaborating with reputable tenants to create lasting value for unitholders.

Financial Performance and Distribution

Earlier this month, Mindspace Business Parks REIT reported a significant rise in net operating income (NOI), reaching Rs 634 crore for the second quarter of this fiscal year—a 26% increase from Rs 504 crore in the same period last year. The company also announced a distribution of Rs 355 crore to unitholders for the second quarter, marking a 16.3% increase from Rs 305 crore in the previous year.

Ramesh Nair highlighted the company's straightforward approach: "For us, it's straightforward - invest in great locations, work with great tenants, and create durable value for our unitholders." This philosophy underpins their recent acquisitions and ongoing growth strategy.

With inputs from PTI