Mindspace Business Parks REIT Reports 9.2% Increase in Operating Income, Revenue Up 11% in Q1 FY25

Mindspace Business Parks REIT announced a notable increase in its financial performance for the first quarter of the fiscal year 2025. The company reported a 9.2% rise in net operating income (NOI), reaching ₹496 crore compared to ₹455 crore in the same period last year. Furthermore, the revenue from operations saw an 11% growth, climbing to ₹620 crore from ₹560 crore in Q1 FY24. This impressive performance was largely driven by robust leasing activities, with over one million square feet leased during the April to June quarter.

Financial Highlights and Distribution

In addition to its increased NOI, Mindspace Business Parks REIT declared a distribution of nearly ₹300 crore to unitholders for the April-June period. The distribution per unit grew by 5% year-on-year, amounting to ₹5.04 per unit for Q1 FY25, compared to ₹285 crore in the corresponding quarter of the previous year. This brings the total distribution since the company's listing in August 2020 to ₹4,231 crore, or ₹71.3 per unit.

Leasing and Occupancy

The company's gross leasing activities for Q1 FY25 totaled 1.1 million square feet. Mindspace Business Parks REIT is actively developing an additional 4.4 million square feet of space, with 1.3 million square feet expected to be completed within the fiscal year. This development includes 1 million square feet in Commerzone Kharadi and 0.3 million square feet at the Data Center in Airoli West, Navi Mumbai.

Ramesh Nair, CEO of K Raheja Corp Investment Managers Private Limited, the manager of Mindspace REIT, expressed optimism about the company's future growth. "We've had yet another great quarter, renting out over 1 million square feet and achieving a remarkable committed occupancy of 91.1%. This healthy leasing, especially at our Navi Mumbai Parks post the Special Economic Zone (SEZ) policy reform, has encouraged us to postpone the future development at our Airoli East Park,"  Mr. Nair said. He added that the company plans to build an additional 1.5 million square feet at Mindspace Airoli East over the next three to four years to meet the rising demand.

Occupancy Rates and Future Development

Mindspace Business Parks REIT reported high occupancy levels across its properties. Six out of its nine parks have achieved more than 96% committed occupancy. The company's GERA CommerZone property in Pune, The Square BKC in Mumbai, and The Square Nagar Road in Pune have all reached 100% occupancy. Other properties, such as Mindspace Malad, Mindspace Madhapur, and Commerzone Yerwada in Pune, boast occupancy rates of 99.6%, 97.4%, and 96.4%, respectively.

The company’s portfolio encompasses a total leasable area of 33.6 million square feet, which includes 26.3 million square feet of completed area, 4.4 million square feet under construction, and 2.8 million square feet earmarked for future development.

Strategic Developments and Sustainability Initiatives

Mindspace Business Parks REIT's strategy includes a significant focus on sustainability and future-ready infrastructure. The company recently raised ₹650 crore from the International Finance Corporation (IFC) via sustainability-linked bonds, underlining its commitment to environmentally sustainable growth. Additionally, Mindspace REIT has collaborated with IIT Bombay on a climate risk assessment project, reflecting its dedication to incorporating sustainable practices into its operations.

The company’s proactive approach to development and leasing, combined with its commitment to sustainability, highlights its capacity to meet the evolving demands of the commercial real estate sector.

Image source- mindspaceindia.com