Mindspace REIT acquires Hyderabad office space for ₹2,038 crore | Mint

Bengaluru: Mindspace Business Parks REIT has acquired 1.82 million sq. ft of office space at Commerzone Raidurg, a Grade A commercial asset in Hyderabad’s Madhapur locality, for ₹2,038 crore to expand its rent-yielding portfolio.

The real estate investment trust (Reit) acquired 100% equity shareholding in Sustain Properties Pvt. Ltd, a subsidiary of its sponsor K Raheja Corp. The office space in the building is currently leased to Qualcomm’s global capability centre (GCC).

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The acquisition follows the right of first offer (ROFO) agreement between Mindspace REIT and the sponsors.

A Reit is a trust that owns a pool of income-generating commercial real estate assets, such as office parks and shopping malls, held in a special purpose vehicle (SPV). It generates revenue by leasing out these properties and collecting rent from tenants.

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“Located in Hyderabad’s prime central business district, this Grade-A+, fully leased asset enhances our portfolio, boosts income stability, and aligns with our growth strategy,” Mindspace REIT said in a statement.

The addition of the property strengthens Mindspace REIT’s presence in Hyderabad, taking its portfolio size to 15 million sq. ft. 
Mindspace REIT on Friday reported a 8.3% year-on-year rise in net operating income to ₹521.8 crore for the quarter-ended December. It recorded 1.7 million sq. ft of gross leasing during the period. 

The company is also evaluating another potential third-party acquisition opportunity in Hyderabad, it said.

Gross leasing of commercial office space touched a historic high of 79 million sq. ft last year, according to property advisory CBRE India, and GCCs emerged as the highest contributor in office space leasing.

India has only three listed office Reits: Embassy REIT, Mindspace Business Parks REIT, and Brookfield India REIT. It also has one listed retail Reit: Nexus Select Trust.

Reits have faced their share of challenges in recent years, many of them pandemic-induced. But now, with the office market turning around and higher acceptance of the product, growth is on the anvil.