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ICICI Securities Report
Mindspace Business Parks real estate investment trust delivered stable Q4 FY24 performance, as revenue/net operating income remained flat QoQ at Rs 6 billion/Rs 4.8 billion.
While physical occupancy dipped 120 basis points QoQ to 83.8%, the REIT manager achieved gross leasing of 2msf in Q4 FY24 (1.1 msf of re-leasing/0.9 msf of new leasing). This led to portfolio committed occupancy rising 250 bps QoQ to 88.6%, as of March 2024.
With the REIT receiving approval for special economic zone de-notification of 0.4msf in FY24 and a further 1.5msf of SEZ area up for de-notification in FY25, the manager is targeting overall portfolio occupancy of 88– 90% in FY25E and 90% by FY26E.
We lower our rating to 'Add' from 'Buy' with a revised discounted cash flow -based target price of Rs 393/unit (earlier Rs 382) based on 1 times March 2025E net asset value.
Key risks: Further rise in vacancies across assets and fall in lease rentals.
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