Brookfield India Real Estate Trust has announced its Q4 and Annual FY23 results and strategic partnership to acquire two Grade-A assets for a combined enterprise value of US$1.4 billion (Rs 112,250 million).
It achieved gross leasing of 2.1mn sq ft in FY2023, which includes 0.9 mn sq ft of new leasing and 1.3 mn sq ft of renewals. Additionally, it signed 0.4 mn sq ft of expansion options. It achieved 11% average escalation on 4.1 mn sq ft of leased area.
The adjusted net operating income grew by 38% YoY to Rs 9,608 million (from Rs 6,958 million in FY2022). The increased income from operating lease rentals by 28% YoY to Rs 8,268 million (from Rs 6,476 million in FY2022). It announced distributions totalling to Rs 6,769 million (Rs 20.20 per unit).
Recognized as Sector Leader by GRESB for Sustainable Office Development in Asia and received a 5-star rating from GRESB in the first year of submission. It is committed to accelerate renewable energy procurement and ensure the transition to clean energy as part of advancement of Net Zero goals to 2040. It signed a 1-year Power Purchase Agreement for the two office campuses in Noida, Candor TechSpace (N1 and N2) to procure 60% Green Energy via IEX Platform.
Some of the key highlights for Q4 FY2023 includes it achieved gross leasing of 1.2M sf in Q4 FY2023, which includes 0.3M sf of new leasing and 0.9M sf of renewals. Additionally signed 0.3M sf of expansion options. It achieved 13% average escalation on 0.6M sf leased area. The adjusted Net Operating Income grew by 15% YoY to Rs 2,444 million (from Rs 2,132 million in Q4 FY2022). Increased Income from Operating Lease Rentals by 14% YoY to Rs 2,109 million (from Rs 1,852 million in Q4 FY2022). Announced distributions of Rs 1,675 million (Rs 5.0 per unit).
Achieved a 15% YoY growth in the Net Operating Income run rate (versus Q4 FY2022) with an embedded headroom of further 13% growth, demonstrating significant organic growth potential. Continue to maintain a robust balance sheet with 32% LTV. Long-duration borrowings with a AAA credit rating act as enablers to attract competitive costs and carry a low refinancing risk.
In a first-of-its-kind partnership in India between a listed REIT and a global institutional investor, Brookfield India REIT (BIRET) and GIC have announced the acquisition of two large commercial assets (totaling 6.5 million square feet) from Brookfield Asset Management’s private real estate funds in an equal partnership. The acquisition includes commercial properties in Brookfield’s Downtown Powai, Mumbai and Candor TechSpace (G1) Gurugram, for a combined enterprise value of Rs 112,250 million. These transactions will be transformative to the growth of BIRET, further increasing its operating area by 44% and consolidated gross asset value by 73%.
Attractive acquisitions at a 5.8% discount to consolidated GAV and 4.5% proforma NDCF accretion. Strengthening BIRET’s presence in Mumbai and Gurugram, and diversifying tenant roster through increased BFSI occupier base and reduction in top 5 tenant concentration from 52% to 32%.
Effective BIRET pro-forma portfolio occupancy of 91% inclusive of Income Support of Rs 2,000 million committed by the Brookfield Group for 2 years from completion of Candor TechSpace (G1), Gurugram acquisition. Strong corporate governance framework for the acquisitions, including approval from independent directors of the Board and approval from majority of unrelated unitholders. The Board of the Manager proposes to fund the acquisitions through an Institutional Placement of up to Rs 35 billion and may also consider other forms of fundraising, including preferential allotment of units.