Mindspace Business Parks REIT has acquired three major commercial buildings located in Mumbai’s Worli and Bandra Kurla Complex business districts and in Pune’s Kalyani Nagar for Rs 2916 crore. The assets were purchased from its sponsor K Raheja Corp Group. The listed REIT plans to fund the deal partly through a preferential issue of units worth up to Rs 1820 crore, subject to approvals. It will also assume debt and liabilities of Rs 1090 crore linked to the properties.
The newly acquired buildings together offer about 0.8 million square feet of leasable office space. Independent valuers have placed their combined Gross Asset Value at Rs 3106 crore. With this acquisition, Mindspace REIT’s total portfolio will grow to nearly 39 million square feet.
Ramesh Nair, managing director and chief executive officer of Mindspace REIT, said the acquisition strengthens the scale and stability of the portfolio and reinforces its presence in Mumbai’s key commercial districts. He said the assets are high quality and have strong cash flows, with several large global tenants already in place.
As part of the transaction, the REIT will acquire Pramaan Properties, which owns around 0.45 million square feet at Ascent in Worli and about 0.1 million square feet in Kalyani Nagar. It will also acquire Sundew Real Estate, the owner of nearly 0.2 million square feet at The Square Avenue 98 in the BKC Annexe. The purchase price reflects a discount of around 6.1 percent to the average of two independent valuations.
Mindspace REIT expects the acquisition to add nearly Rs 226 crore to its net operating income for financial year 2025 to 2026 on a proforma basis, representing growth of about 9 percent. The proforma distribution per unit is estimated to rise by around 1.7 percent. The front office portfolio value contribution is expected to increase to almost 7.9 percent.
Committed occupancy for the acquired properties stands at around 86 percent for the Worli building and 100 percent for both the BKC Annexe and the Pune asset. The combined portfolio has an estimated weighted average lease expiry of nearly seven years. The REIT said the BKC Annexe building offers additional value through mark to market opportunities and area enhancement.
Mindspace REIT has completed several acquisitions in the past, including Commerzone Raidurg, consolidation at Commerzone Porur, expansions at Commerzone Yerwada and the purchase of The Square, 110 Financial District in Hyderabad. This latest deal is its second sponsor acquisition and brings total acquisitions since listing to nearly 3.2 million square feet. The REIT, listed in August 2020, owns office parks and standalone assets across the Mumbai region, Pune, Hyderabad and Chennai, with a total leasable area of 38.2 million square feet as of late September.
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