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ICICI Securities Report
The real estate investment trust (REIT) has a stabilised rent yielding office portfolio spread across Hyderabad, Mumbai Metropolitan Region, Pune and Chennai.
With 92% committed occupancy and in-place rent of just Rs 52/per square feet/month, we like Mindspace Business Parks REIT given 16% net operating income compound annual growth rate over FY20-23E, a resilient leasing cycle for office assets in India’s tier-I cities and low leverage of 0.2 times net debt/equity which leaves headroom for injection of new assets in the REIT portfolio.
At current market price of Rs 302, we estimate net distributable cash-flow yield of approximately 7% over FY22-23E of which over 90% is estimated to consist of tax-free dividends.
Key risk to our thesis is the large-scale adoption of Work-from-Home by occupiers over the long term.
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