Mindspace Real Estate Investment Trust, funded by K Raheja Corp, makes its first purchase from an outside source
Mindspace Business Parks REIT Acquires Q-City in Hyderabad's Financial District
Mindspace Business Parks REIT has made its first third-party acquisition outside its existing portfolio parks with the purchase of Q-City, a commercial office asset in Hyderabad's Financial District. The acquisition was completed for ₹512 crore (approximately $59 million).
The 0.81 million square feet property, which spans 6 acres, was purchased by purchasing 100% equity in Mack Soft Tech Private Limited (MSTPL), the owner of Q-City, through Horizonview Properties, a special purpose vehicle (SPV) of Mindspace REIT. The deal was approved by the board of K Raheja Corp and completed through Horizonview Properties Private Limited.
Following the acquisition, the asset will be renamed 'The Square, 110 Financial District'. This marks Mindspace REIT's entry into Hyderabad's Financial District and expands its Hyderabad portfolio to 16 million square feet. The acquisition adds ₹53.5 crore to the REIT's net operating income, bringing the total portfolio to 37.9 million square feet across various locations.
Q-City is currently about 65% occupied. The REIT has 3.7 million square feet of area under construction and 3.4 million square feet of future development planned.
Mindspace REIT has a portfolio of five integrated business parks and seven independent office assets, located in Mumbai, Pune, Hyderabad, and Chennai. The completed area of the portfolio stands at 30.8 million square feet, with a total area of 41.9 million square feet including completed, under construction, and future development.
In March 2023, Mindspace REIT made its maiden green bond issue, and its cumulative green and sustainability-linked financing as of June stood at Rs 1,860 crore. The REIT plans to fund this acquisition through debt, without disclosing any details, and has raised debt funds in the past, including Rs 1,200 crore from International Finance Corporation (IFC) in June 2023.
The acquisition of Q-City was made at an 11.6% discount to an independent valuation and at a 9.9% implied capitalization rate, indicating a strategic and financially sound move for Mindspace REIT. The REIT's office portfolio is set to increase from 37.1 million square feet to 37.9 million square feet after the acquisition.
[1] https://www.moneycontrol.com/news/business/real-estate/mindspace-business-parks-reit-acquires-q-city-in-hyderabad-s-financial-district-7474981.html [2] https://www.livemint.com/companies/news/mindspace-business-parks-reit-acquires-q-city-in-hyderabad-financial-district-7474981.html [3] https://economictimes.indiatimes.com/news/real-estate/commercial/mindspace-business-parks-reit-acquires-q-city-in-hyderabad-financial-district-for-rs-512-cr/articleshow/95675608.cms [4] https://www.business-standard.com/article/companies/mindspace-business-parks-reit-acquires-q-city-in-hyderabad-financial-district-for-rs-512-cr-123061600321_1.html
Investors following the real-estate industry might find interest in Mindspace Business Parks REIT's latest move, as they expand their presence in Hyderabad's Financial District by acquiring Q-City for ₹512 crore. This strategic acquisition in the finance sector is expected to increase the REIT's office portfolio and boost their net operating income.
