Mindspace Business Parks REIT

Mindspace Business Parks REIT has a quality office portfolio in Mumbai, Hyderabad, Pune and Chennai. The business parks in Mumbai are Mindspace Airoli East Business Park, Mindspace Airoli West Business Park, Paradigm Mindspace Malad and The Square, BKC(2). The properties in the Pune include Commerzone Yerwada Business Park, Gera Commerzone Kharadi Business Park and The Square, Nagar Road. The Chennai property of the company is Commerzone Porur. And, the office parks in Hydrabad are Commerzone Pocharam and Mindspace Madhapur. The total leasable area of Mindspace Business Parks are 12.1 msf, 11.6 msf, 5.0 msf and 0.8 msf in Mumbai, Hyderabad, Pune and Chennai, respectively. With total leasable area of 29.5 msf, it is one of the largest Grade-A office portfolios in India. The under-construction area of the company is 2.8 m sq ft. The future construction of Mindspace Business is spread across Hyderabad, Chennai, and Mumbai in a 3.6 m sq ft area. For the last three fiscals, Mindspace REITs has posted total income/net profits of Rs. 1502.20 cr. / Rs. 161.00 cr. (FY18), Rs. 1697.70 cr. / Rs. 514.40 cr. (FY19) and Rs. 2026.20 cr. / Rs. 513.90 cr. (FY20). Thus while it has shown growth in its rental income, its bottom line has seen downtrends for FY20 and is perhaps the precursor of things likely going forward. On BRLM's front, 13 lead managers are managing the REIT. Embassy Parks REIT, listed peer, have managed to give around 8% distribution rewards since listing. But now this sector is having very challenging time as amidst COVID-19 pandemic many IT and service industry have opted for Work from Home model. As per management, the situation is going to be normal, once the pandemic situation eases and hoping for good requirement as social distancing at the workplace will be new normal. Thus views on future prospects are divided among masses. So we give AVOID rating to this REIT for retail investors, but one who wants regular income of 6-10% (near future is not good) and very less risk may opt for this REIT.

• 1 Cape Trading LLP
• 2 Anbee Constructions LLP