Mindspace Business Parks REIT has acquired the 22% ownership interest it didn’t already own in a commercial real estate project in Chennai for Rs 181.6 crore (about $22 million).
The Mumbai-listed real estate investment trust, which is sponsored by Indian developer K Raheja Corp and counts Singapore sovereign wealth fund GIC as well as Abu Dhabi Investment Authority as its investors, said over the weekend it bought about 240,000 square feet of leasable area at Commerzone Porur.
With this transaction, the REIT owns the entire 1.1 million square feet of leasable area of the commercial project. The acquisition was funded via debt.
The REIT, through Horizonview Properties Pvt. Ltd, previously owned 78% of the project while the erstwhile landowner, RPIL Signalling Systems Ltd, owned 22% interest in the project.
“This strategic acquisition aligns perfectly with our overarching strategy to exercise complete and comprehensive control of our assets, enabling holistic planning and decision making across the portfolio,” Vinod Rohira, manager to Mindspace REIT said on the acquisition.
Rohira said the REIT is well-positioned to explore more inorganic growth opportunities, helped by its low loan-to-value ratio.
Listed on stock exchanges in August 2020, Mindspace REIT’s leasable office parks portfolio now has an area of about 32.3 million square feet. This includes 26.1 million square feet of completed area, 2.5 million square feet of area under construction, and 3.7 million square feet of future development. Its Grade-A office portfolio is located in Mumbai, Pune, Chennai and Hyderabad with over 200 tenants as of June.
Some of Mindspace’s other commercial assets include Mindspace Airoli East, Mindspace Airoli West in Mumbai, Mindspace Madhapur and Mindspace Pocharam in Hyderabad, Commerzone Yerawada and Gera Commerzone Kharadi in Pune, among others.
In March, the REIT raised about Rs 550 crore through its debut green bond issue maturing in three years and one month since the time of its launch. This was the first such offering by any REIT in India, according to Reuters.
While it is unclear whether the funds raised from this bond issue were utilised for the latest acquisition, the proceeds from the issue were to be used to provide loans to the special purpose vehicles of the REIT for refinancing existing loans and construction and development of relevant green projects, according to the term sheet.
Credit ratings firm ICRA said in a report published in February that it expected the REIT’s overall credit profile to “remain stable on the back of the large, diversified and stable operational portfolio, the anticipated growth from assets currently under development and the low leverage at the consolidated level.”
Among other key REIT-related acquisitions in India, Singapore's GIC and Brookfield India REIT partnered to acquire two commercial properties from Brookfield Asset Management Inc. in May for about $1.4 billion. The deal added about 6.5 million square feet to Brookfield REIT’s portfolio.