Mindspace Busine

The acquisition of Commerzone Raidurg increases Mindspace REIT's footprint in Hyderabad to approximately 15 million square feet. Management emphasized that Madhapur has become the city's 'prime CBD,' accounting for 70% of all absorption in Hyderabad over the last five years. The asset is located very close to the existing Mindspace Madhapur campus, allowing for operational synergies and market leadership.

The acquisition is priced at ₹2,038 crores, which represents a 7.5% discount to independent valuations. It is expected to be DPU-accretive with an estimated distribution yield of 7.2%, higher than the REIT's current yield. The deal adds ₹167 crores to the NOI on a pro-forma basis for FY25, implying an 8.2% growth in total portfolio NOI.

The asset is 100% leased to Qualcomm, a $190 billion company, on a 15-year lease. Management highlighted that this is Qualcomm's second-largest R&D center outside the U.S. Qualcomm has invested approximately ₹11,000 per square foot in fit-outs and technology, which is significantly higher than the standard ₹4,000 per square foot, indicating high stickiness and long-term commitment to the location.

The acquisition will be funded through a mix of equity and debt. A preferential issue of ₹613 crores will be executed via an equity swap, meaning no cash will be used for the equity portion. The remaining balance will be funded by debt, including refinancing existing loans at the SPV level. Post-transaction, the REIT's LTV will rise to 25.3%, which management considers well within the headroom for future growth.

Mindspace REIT will manage the facility through its in-house company, CAMPLUS. While the REIT owns 1.82 million square feet, it will collect CAM revenue on the entire 2.8 million square feet of the office park. The CAM model is structured as 'cost plus 20%,' providing a steady margin and ensuring that the REIT benefits from the scale of the entire development.