Mindspace Business Parks REIT, a leading real estate investment trust (REIT) in India, has disclosed its acquisition of Commerzone Raidurg, an advanced Grade-A commercial asset situated in Hyderabad’s Madhapur micro-market. The transaction, valued at INR 2,038 crore, further fortifies Mindspace REIT’s strategic expansion within India’s most dynamic business corridors. This acquisition is anticipated to substantively augment Mindspace REIT’s asset base and revenue trajectory, solidifying its stature as a dominant entity within the commercial real estate sector.
Strategic Expansion in Hyderabad
The acquisition entails 100% equity shareholding in Sustain Properties, the entity that holds ownership of Commerzone Raidurg, a 1.82 million square feet (MSF) commercial property that is fully leased to a premier Fortune 500 Global Capability Center (GCC)—Qualcomm. This transaction was consummated pursuant to the Right of First Offer (ROFO) agreement with the REIT’s sponsors, underscoring Mindspace REIT’s commitment to acquiring premium, income-generating assets that align with its long-term investment philosophy.
Hyderabad has evolved into a pivotal global technology nucleus, consistently attracting substantial capital influx from multinational enterprises and GCCs. The Madhapur micro-market, a prominent IT and business enclave, is characterized by robust infrastructure, seamless connectivity, and a high concentration of blue-chip corporate tenants.
Elaborating on the strategic importance of the acquisition, Mr. Ramesh Nair, CEO of Mindspace REIT, stated, “The acquisition of Commerzone Raidurg marks a significant milestone in our endeavour to deliver sustainable value and growth for our unitholders. Situated in Hyderabad’s central business district, this Grade-A+, fully leased asset not only strengthens our portfolio but also enhances income stability. With an esteemed tenant in place and substantial mark-to-market potential, this acquisition reinforces our preeminence in India’s commercial real estate domain and affirms our strategic focus on acquiring high-calibre, revenue-generating assets.”
Mindspace REIT Acquisition – Key Transaction Highlights
Asset Overview
- Total Leasable Area: 1.82 MSF, forming part of a broader 2.8 MSF development
- Occupancy: 100% leased to Qualcomm, ensuring predictable rental inflows
- Location: Madhapur, Hyderabad’s most significant commercial hub
- Sustainability Credentials: Designed in accordance with stringent green building standards, reinforcing energy efficiency and environmental sustainability
Portfolio Enhancement
- Reinforces Mindspace REIT’s foothold in Hyderabad, expanding the portfolio to approximately 15 msf
- Weighted Average Lease Expiry (WALE): 12 years, ensuring prolonged revenue visibility
- Monthly Rental Rate: INR 69 per square foot, signifying marked upward rental reversion potential
- Enhanced Occupancy Rate: The acquisition marginally elevates Mindspace REIT’s committed occupancy, substantiating its strategic emphasis on stable, income-generating properties
Financial Highlights
- Acquisition Consideration: INR 2,038 Crore, secured at a 7.5% discount to the average of two independent valuations
- Purchase Consideration: INR 613 Crore, financed via a preferential issue of units
- Projected Incremental NOI (Net Operating Income) for FY25: INR 167 Crore, reflecting an anticipated 8.2% growth
- Strengthened Cash Flow Predictability: The acquisition augments cash flow stability, bolstering Mindspace REIT’s financial fortitude
Post-Acquisition Mindspace REIT Portfolio Metrics
- Total Portfolio Size: Expansion from 34.8 MSF to 36.6 MSF
- Committed Occupancy Rate: Increase from 91.5% to 92%
- Gross Asset Value (GAV): Expected augmentation to INR 33,550 Crore
- Loan-to-Value (LTV) Ratio: Marginal rise to 25.3%, preserving ample leverage capacity for future growth initiatives
- Fortified Market Position: Strengthens Mindspace REIT’s dominance in the commercial real estate landscape of India
Strategic Rationale
This acquisition aligns with Mindspace REIT’s overarching strategy to consolidate its presence in high-demand commercial hubs. Hyderabad, and specifically Madhapur, continues to be one of the most sought-after locations for multinational corporations and technology firms seeking high-quality office spaces. With a premier tenant such as Qualcomm and a long WALE, this acquisition ensures sustained income visibility and significant rental appreciation prospects.
Additionally, the transaction has been unanimously approved by the Board of the Manager to Mindspace REIT, pending requisite regulatory and unitholder approvals. This acquisition further optimizes portfolio diversification, reinforcing revenue resilience across multiple commercial real estate markets in India.
About Mindspace Business Parks REIT
Mindspace Business Parks REIT, publicly listed since August 2020, is backed by the K Raheja Corp Group and holds a preeminent office portfolio across India’s key metropolitan markets, including Mumbai, Pune, Hyderabad, and Chennai. The REIT has successfully cemented itself as one of the leading proprietors of Grade-A commercial office spaces, catering to an elite clientele comprising both multinational and domestic corporations.
The REIT’s extensive portfolio spans 34.8 MSF of leasable space, comprising 26.8 MSF of completed assets, 4.6 MSF under development, and 3.4 MSF earmarked for future growth. Housing over 225 premium tenants, Mindspace REIT upholds a strong commitment to sustainability, with a majority of its assets accredited with Gold and Platinum Green Building Certifications (IGBC/LEED). Its properties are meticulously designed to accommodate the evolving infrastructural and operational requisites of leading multinational enterprises.
Future Growth Trajectory
This acquisition not only deepens Mindspace REIT’s footprint within Hyderabad but also signals its intention to pursue further acquisitions within other high-demand commercial corridors. The REIT remains steadfast in identifying high-yield, strategically positioned commercial assets that augment long-term unitholder value. Given the increasing demand for premium office spaces amidst sustained economic expansion, Mindspace REIT is poised for continued scalable growth and portfolio diversification.