Mindspace REIT Q1 Review - Leasing Momentum Uptick To Flow Into Distributions Over FY25–26E: ICICI Securities

ICICI Securities Report

Mindspace Business Parks real estate investment trust delivered a stable Q1 FY25 performance as revenue/net operating income grew 4% QoQ to Rs 6.2 billion and Rs 5.0 billion respectively. While physical occupancy dipped 50 basis points QoQ to 83.3%, the REIT manager achieved gross leasing of 1.1 million square feet in Q1 FY25 (0.6 msf of re-leasing and 0.5 msf of new leasing).

This led to portfolio committed occupancy rising 50 bps QoQ to 89.1%, as of June 2024. The manager is targeting an overall portfolio committed occupancy of ~92–93%/~94–95% by March 2025/FY26E given leasing demand from Global Captive Centres, increased workforce attending office physically and SEZ de-notification benefits.

We maintain Add and our discounted cash flow based target price of Rs 393/unit, based on 1 times March 25E Net Asset Value.

Key risks to our call are further rise in vacancies across assets and fall in lease rentals.

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