Q1 2027 Mindspace Business Parks REIT Earnings Call

August 6, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to Mindspace Business Parks REIT earnings call for Q1 FY27 financial results. We request participants to please remain connected.

Operator: Ladies and gentlemen, good day. Welcome to Mindspace Business Parks REIT earnings call for Q1 FY27 financial results. We request participants to please remain connected. We have a little technical glitch. We shall be back in another minute. Requesting all participants to please remain connected. Requesting all participants to please stay connected. We'll begin the earnings call shortly. Hi, everyone. Good evening. I hope I am audible. Requesting all the participants to please stay connected. We'll begin the call shortly. Hello, everyone within the boardroom. Please let me know if I'm audible there.

Speaker #1: We have a little technical glitch; we shall be back in another minute. Requesting all participants to please remain connected. Requesting all participants to please stay connected.

Speaker #1: We'll begin the earnings call shortly.

Speaker #2: Simon, can you speak again?

Speaker #1: Hi everyone, good evening.

Speaker #3: Thanks for keeping up.

Speaker #1: I hope I'm audible. Requesting all the participants to please stay connected. We'll begin the call shortly. Hello everyone. Within the boardroom, please let me know if I'm audible there.

Speaker #2: Yeah, can you hear us?

Preeti Chheda: Yeah. Can you hear us?

Speaker #1: Yes, I can hear you clearly.

Operator: Yes. I can hear you clearly.

Speaker #2: It's clear.

Preeti Chheda: It's clear?

Speaker #1: Yes, I hope I'm audible within the boardroom.

Operator: Yes. I hope I am audible within the boardroom.

Speaker #2: Yeah, you're audible. Yeah, you're audible.

Preeti Chheda: Yeah, you are audible.

Speaker #1: Thank you so much.

Operator: Thank you so much.

Speaker #2: Okay, let's get started.

Preeti Chheda: Okay. Let's get start.

Speaker #1: Ladies and gentlemen, good day, and welcome to Mindspace Business Parks REIT earnings call for Q1 FY27 financial results. Please note, all participant lines will be in listen-only mode.

Operator: Ladies and gentlemen, good day, and welcome to Mindspace Business Parks REIT earnings call for Q1 FY2027 financial results. Please note all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. With that, I hand over the call to Mr. Shravan Kailasa from Mindspace Business Parks REIT. Thank you, and over to you. Please go ahead, Shravan.

Operator: Ladies and gentlemen, good day, and welcome to Mindspace Business Parks REIT earnings call for Q1 FY 2027 financial results. Please note all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. With that, I hand over the call to Mr. Shravan Kailasa from Mindspace Business Parks REIT. Thank you, and over to you. Please go ahead, Shravan.

Speaker #1: And there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. With that, I hand over the call to Mr. Shravan Kailasa from Mindspace Business Parks REIT.

Speaker #1: Thank you, and over to you. Please go ahead, Shravan.

Speaker #4: Good afternoon, everyone, and thank you for joining the earnings call for Q1 of financial year 2027 for Mindspace Business Parks REIT. At this point, we'd like to highlight that the management may make certain statements that are forward-looking in nature.

Shravan Kailasa: Yeah. Good afternoon, everyone, and thank you for joining the earnings call for Q1 FY2027 for Mindspace Business Parks REIT. At this point, we'd like to highlight that the management may make certain statements that may be forward-looking in nature. Please be advised that our actual results may differ materially from these statements. We do not guarantee these statements or results and are not obliged to update them at any point of time. I would now like to welcome our CEO and MD, Mr. Ramesh Nair, CFO, Ms. Preeti Chheda, and Mr. Govardhan Gedela, Head, Corporate Finance, who will take you through the business updates and the financial performance during this quarter. We will then open the call to a round of Q&A. I will now hand over the call to Ramesh.

Speaker #4: Please be advised that our actual results may differ materially from these statements. We do not guarantee these statements or results and are not obliged to update them at any point in time.

Shravan Kailasa: We do not guarantee these statements or results and are not obliged to update them at any point of time. I would now like to welcome our CEO and MD, Mr. Ramesh Nair, CFO, Ms. Preeti Chheda, and Mr. Govardhan Gedela, Head, Corporate Finance, who will take you through the business updates and the financial performance during this quarter. We will then open the call to a round of Q&A. I will now hand over the call to Ramesh.

Speaker #4: I would now like to welcome our CEO and MD, Mr. Ramesh Nayar, our CFO, Ms. Preeti Cheda, and Mr. Govindan Gedla, Head of Corporate Finance, who will take you through the business updates and the financial performance during the quarter.

Speaker #4: We will then open the call to a round of Q&A. I will now hand over the call to Ramesh.

Speaker #5: Thank you, Shravan. Sorry for the slight delay in starting this call. Good afternoon, everyone. Thank you for joining us today. Q1 FY27 has been a very strong quarter for us.

Ramesh Nair: Thank you, Shravan. Sorry for the slight delay in starting this call. Good afternoon, everyone. Thank you for joining us today. Q1 FY2027 has been a very strong quarter for us. We achieved gross leasing of 0.9 million square feet during this quarter. The portfolio's committed occupancy stood at 95.8% on a like-to-like basis, and including the new acquisition, it stands at 92.1%. The strong growth momentum is reflected in our financials. Net operating income grew by 27.8% year-on-year to INR 788 crore for the quarter. Distribution for the quarter increased by 25.2% year-on-year. Distribution per unit for Q1 FY2027 stood at INR 6.67, the highest ever. This is a year-on-year growth of 15.2%. Building on this momentum, happy to share that we have launched two new office projects and two new hotels.

Speaker #5: We achieved gross leasing of 0.9 million square feet during this quarter. The portfolio's committed occupancy stood at 95.8% on a like-to-like basis, and including the new acquisition, it stands at 92.1%.

Speaker #5: The strong growth momentum is reflected in our financials. Net operating income grew by 27.8% year-on-year to ₹788 crore for the quarter. Distribution for the quarter increased by 25.2% year-on-year. Distribution per unit for Q1 FY27 stood at ₹6.67, the highest ever.

Ramesh Nair: The strong growth momentum is reflected in our financials. Net operating income grew by 27.8% year-on-year to INR 788 crore for the quarter. Distribution for the quarter increased by 25.2% year-on-year. Distribution per unit for Q1 FY 2027 stood at INR 6.67, the highest ever. This is a year-on-year growth of 15.2%. Building on this momentum, happy to share that we have launched two new office projects and two new hotels.

Speaker #5: This is a year-on-year growth of 15.2%. Building on this momentum, I'm happy to share that we have launched two new office projects and two new hotels.

Speaker #5: We have 4.7 million square feet of under-construction office assets due for delivery over the next 12 months. Most of this is pre-committed. I'm happy to also announce that we are launching a new building, Building B12, in our Iroli West Park.

Ramesh Nair: We have 4.7 million square feet of under-construction office assets due for delivery over the next 12 months. Most of this is pre-committed. Happy to also announce that we are launching a new building B12, in our Mindspace Airoli West. The park is currently at 98% occupancy, and this will add another 1.1 million square feet to the park. Similarly, we are adding another 0.4 million square feet of office in Commerzone Yerwada, where we have a vacancy of only 54,000 square feet. Very happy to announce that we are adding two new hotels in Hyderabad and Pune, which are pre-committed. The Pune hotel is a greenfield development, while in Hyderabad we are repurposing an office block. This is in line with our strategy to create integrated campus ecosystems.

Speaker #5: The park is currently at 98% occupancy, and this will add another 1.1 million square feet to the park. Similarly, we are adding another 0.4 million square feet of office in Commerce Zone Yerawada, where we have a vacancy of only 54,000 square feet.

Speaker #5: Very happy to announce that we are adding two new hotels, in Hyderabad and Pune, which are pre-committed. The Pune hotel is a greenfield development, while in Hyderabad we are repurposing an office block.

Speaker #5: This is in line with our strategy to create integrated campus ecosystems. With this, our portfolio expands to 46.2 million square feet, with 10 million square feet at various stages of approvals and development.

Ramesh Nair: With this, our portfolio expands to 46.2 million square feet with 10 million square feet at various stages of approvals and development. We are also on the lookout for more redevelopment opportunities in Hyderabad and data center development opportunities in Navi Mumbai. This quarter, we also concluded the acquisitions of Commerzone, Pallikaranai, and International Tech Park Chennai, Radial Road, which we have now rebranded as One Radial. We have already signed a deal at 87 at One Radial and are currently in final stages of closing multiple deals between 85 and 90 in both these parks. We are also in advanced discussions for closing 450,000 square feet with a global BFSI GCC. Coming to Madhapur, rentals continue to trend upward. We've been negotiating deals at almost 130 as of last quarter. The average rent of the park is INR 80.

Speaker #5: We are also on the lookout for more redevelopment opportunities in Hyderabad, and data center development opportunities in Navi Mumbai. This quarter, we also concluded the acquisitions of Commerce Zone, Pallikaranai, and International Tech Park, Chennai, Radial Road, which we have now rebranded as One Radial.

Speaker #5: We have already signed a deal at 87 at One Radial, and are currently in the final stages of closing multiple deals between 85 and 90 in both these parks.

Speaker #5: We are also in advanced discussions for closing 450,000 square feet with a global BFSI GCC. Coming to Madhapur, rentals continue to trend upward. We've been negotiating deals at almost ₹130 as of last quarter; the average rent of the park is ₹80. This shows the mark-to-market potential sitting in our portfolio.

Ramesh Nair: This shows the mark to market potential sitting in our portfolio. We are very optimistic about the path ahead as we continue to buy well, as we build and enhance our existing portfolio. Now I'd like to share highlights from various IPC and other research reports. JLL stated that India's office net absorption in H1 2026 rose to nearly 27 million square feet, up nearly 12% year on year. For the quarter, net absorption stood at 13.2 million square feet. New completions totaled nearly 23 million square feet in H1. Relevant vacancy fell to 9.9%. Mumbai posted its lowest vacancy levels in 15 plus years. The CBRE report talked about how gross office absorption reached a record 45.5 million square feet, absorption increasing nearly 10% year on year. GCCs accounted for 43% of leasing. GCC deal volumes increased 30% year on year.

Speaker #5: We are very optimistic about the path ahead, as we continue to buy well and as we build and enhance our existing portfolio. Now, I'd like to share highlights from various IPC and other research reports.

Speaker #5: JLL stated that India's office net absorption in H1 2026 rose to nearly 27 million square feet, up nearly 12% year-on-year. For the quarter, net absorption stood at 13.2 million square feet.

Speaker #5: New completions totaled nearly 23 million square feet in H1, and relevant vacancy fell to 9.9%. Mumbai posted its lowest vacancy levels in over 15 years.

Speaker #5: The CBRE report talked about how gross office absorption reached a record 45.5 million square feet, with absorption increasing nearly 10% year-on-year. GCCs accounted for 43% of leasing, and GCC deal volumes increased 30% year-on-year.

Speaker #5: GCCs drove 53% of deals above 100,000 square feet. India's office stock surpassed the 1 billion square feet mark, and institutional Grade A constitutes around 30% of the stock.

Ramesh Nair: GCCs drove 53% of deals above 100,000 square feet. India's office stock surpassed the 1 billion square feet mark, and institutional Grade A constitute around 30% of this stock. I'd also like to highlight an interesting report that I came across from CRE Matrix on the Chennai market, which spoke about how Chennai is the fastest growing GCC hub among Tier 1 cities. The city having 400 plus GCC units employing 2.1 lakh plus professionals. Demand supply ratio of 1.8x, the healthiest among South India's major office markets, meaning new supply is backed by real absorption, not just speculation. Office rentals, also in Chennai, are nearly 20% below Bangalore, which, while remaining institutional Grade, are durable cost to quality propositions for GCCs to scale up. Chennai also has the lowest attrition of any Tier 1 city. This means tenant workforces are stable and less likely to churn or downsize space.

Speaker #5: And I'd also like to highlight an interesting report that I came across from CRE Matrix on the Chennai market, which spoke about how Chennai is the fastest-growing GCC hub among Tier 1 cities, the city having 400-plus GCC units, employing over 210,000 professionals, a demand-supply ratio of 1.8x—the healthiest among South India's major office markets—meaning new supply is backed by real absorption, not just speculation.

Speaker #5: Office rentals, also in Chennai, are nearly 20% below Bangalore, which, while remaining institutional grade, are durable cost-to-quality propositions for GCCs to scale up. Chennai also has the lowest attrition of any Tier 1 city. This means tenant workforces are stable and less likely to churn or downsize pace.

Speaker #5: There's a ₹63,000 crore metro investment in Chennai, which is the highest among all Tier 1 cities, with Phase 2 set to unlock the next wave of GCC campus development.

Ramesh Nair: There's INR 63,000 crore of metro investment in Chennai, which is the highest among all Tier 1 cities, with phase II set to unlock the next wave of GCC campus development. Chennai is also now India's second largest data center market, with landing point for six submarine cables diversifying the demand base beyond traditional office. All this augurs well for us given our growing interest in recent investments in this market. While the quarter started with some volatility, it improved during the latter half of the quarter. Geopolitical tension in the Gulf and pressure on oil resulted in costs moving upward. In spite of that, on ground, this was the strongest H1 the Indian office market has ever recorded. The demand did not disappear post announce back. Global companies have come and demand for GCCs grew close to 40%. A weaker Indian rupee is also part of the story.

Speaker #5: Chennai is also now India’s second-largest data center market, with a landing point for six submarine cables, diversifying the demand base beyond traditional office. All this augurs well for us, given our growing interest and recent investments in this market.

Speaker #5: While the quarter started with some volatility, it improved during the latter half of the quarter. Geopolitical tension in the Gulf and pressure on oil resulted in costs moving upward. In spite of that, on the ground, this was the strongest first half the Indian office market has ever recorded.

Speaker #5: The demand did not disappear; it paused, and now it's back. Global companies have come in, and demand for GCCs grew close to 40%. A weaker rupee is also part of the story.

Speaker #5: For a company earning in dollars, India has become even cheaper, and our infrastructure and talent have only improved. Mindspace Madhapur has maintained a consistently healthy committed occupancy rate of 99% plus. At Mindspace Airoli West, we have stabilized occupancy at 98% plus. These two are the largest assets in our portfolio, and they are essentially full.

Ramesh Nair: For a company earning in dollars, India has become more cheaper. As our infrastructure and talent have only improved, Mindspace Madhapur committed occupancy stayed consistently at a very healthy 99% plus. At Mindspace Airoli West, we stabilized occupancy at 98% plus. These two are the largest assets in our portfolio, and these are essentially full. Out of the 68 buildings in our portfolio, 45 have an occupancy over 99%, 49 over 96%, and 55 buildings over 90%. Let's look at a little bit of our development update of our assets. In Airoli East, committed occupancy has risen to 84.5%. Upgrade work in buildings B1, 9, 10, 11, 12 has made much progress and will conclude this quarter. Amongst other things, the lobbies will be a lot more sophisticated, functional, suited to best-in-class parks across the country. Client feedback has also helped shape our infrastructure plans.

Speaker #5: Out of the 68 buildings in our portfolio, 45 have an occupancy over 99%, 49 over 96%, and 55 buildings over 90%. Let's look at a little bit of our development update, of our assets.

Speaker #5: In Iroli East, committed occupancy has risen to 84.5%. Upgrade work in buildings B1, 9, 10, 11, and 12 has made much progress, and we'll conclude this quarter.

Speaker #5: Among other things, the lobbies will be a lot more sophisticated, functional, and suited to best-in-class parks across the country. Client feedback has also helped shape our infrastructure plans. We're building covered walkways across the park to create a more comfortable, connected experience for our occupiers.

Ramesh Nair: We're building covered walkways across the park to create more comfortable, connected experience for our occupiers. There's also the foundation work, which has commenced for our B17, our 9 lakh sq ft mixed-use development. This comprises a 3 lakh sq ft Hyatt Regency Hotel and a 6 lakh sq ft office building. At Mindspace Airoli West, we have submitted plans to construct a new building spread across 1.1 million sq ft. We are calling this B12. Recent deals in Airoli are being signed at INR 75 plus. This progress strengthens our confidence in Navi Mumbai's growth and our long-term plan for this micro market. As you're aware, Mindspace is the only Indian-listed REIT with a data center portfolio. Two data centers are operational as already operational, and the next one gets ready in Q4 FY27 and the other in Q2 FY28.

Speaker #5: This is also the foundation work, which has commenced for B17, our 9 lakh square feet mixed-use development. This comprises a 3 lakh square feet high three-agency hotel and a 6 lakh square feet office building.

Speaker #5: At Mindspace Iroli West, we've submitted plans to construct a new building, spread across 1.1 million square feet. We're calling this B12. Recent deals in Iroli are being signed at ₹75-plus.

Speaker #5: This progress strengthens our confidence in Navi Mumbai's growth, and our long-term plan for this micro market. As you're aware, Mindspace is the only Indian listed REIT with a data center portfolio, two data centers are operational as already operational, and the next one gets ready in Q4, FY 27, and the other in Q2, FY 28.

Speaker #5: Upon completion, our data center portfolio will span approximately 1.7 million square feet. In Mindspace Madhapur, our business park spans nearly 10 million square feet, and the occupancy levels are 99%.

Ramesh Nair: Upon completion, our data center portfolio will span approximately 1.7 million sq ft. In Mindspace Madhapur, our business park stands nearly 10 million sq ft and the occupancy levels are 99%. This just means 115,000 sq ft of vacancy, and Madhapur is operating at near full capacity. We have also begun trials at The Pearl Club, our flagship members-only exclusive club, which will soon open for membership. Also happy to report that The Pearl Club in Hyderabad has become India's first project to achieve platinum certification under the IGBC New Buildings Version 4 rating system. This positions it as a benchmark for sustainable ESG-led development in the country. For B1, we have applied for part OC. This is the building which has been fully leased to a global banking GCC, while the terrace work for B8 has been completed. This again has been fully pre-let.

Speaker #5: This just means 115,000 square feet of vacancy, and Madhapur is operating at near full capacity. We have also begun trials at the Pearl Club, our flagship members-only exclusive club, which will soon open for membership.

Speaker #5: Also happy to report that Pearl Club in Hyderabad has become India's first project to achieve Platinum certification under the IGBC New Buildings Version 4 rating system.

Speaker #5: This position has set a benchmark for sustainable, ESG-led development in the country. For B1, we have applied for part OC; this is the building which has been fully leased to a global banking GCC.

Speaker #5: While the terrace work for B8 has been completed, this again has been fully pre-let. At B18, which is again pre-let for a Ritz-Carlton, foundation work has begun, and we've implemented pre-cast construction technology.

Ramesh Nair: At B18, which is again pre-let for a Ritz-Carlton, foundation work has begun, and we've implemented precast construction technology. We are excited that we are pouring concrete in the supply-starved market, backed by confidence to build more. In Pune, we renewed a 350,000 sq ft lease at The Square on Nagar Road with a leading global Fintech GCC, highlighting the strong occupier satisfaction and longstanding relationship we have built with our tenants. Separately, we have also purchased 52,000 sq ft in Commerzone Yerwada, taking the total acquisitions in the park during the last one year to 140,000 sq ft. On the client centricity front, in Q1, we continued to strengthen tenant engagement through various B2C activities under the Mindspace Delightful Days. Our Hyderabad assets cleared the British Safety Council Fire Safety Audit for 2026. We have also been pushing carpooling hard in all our campuses.

Speaker #5: We're excited that we are excited that our that we are pouring concrete in the supply start market, backed by confidence to build more. In Pune, we renewed a 350,000 square feet lease at the Square Nagar Road, with the leading global fintech GCC, highlighting the strong occupiers' satisfaction and longstanding relationship we have built with our tenants.

Speaker #5: Separately, we have also purchased 52,000 square feet in the commerce zone, Yerwada, taking the total acquisitions in the park during the last one year to 140,000 square feet.

Speaker #5: On the client centricity front, in Q1 we continued to strengthen tenant engagement through various B2C activities under the IP Mindspace Delightful Days. Our Hyderabad assets cleared the British Safety Council Fire Safety Audit for 2026.

Speaker #5: We have also been pushing carpooling hard on all our campuses, our EV charging network is live across all our Hyderabad assets, and we're ensuring greener mobility is built in.

Ramesh Nair: Our EV charging network is live across all our Hyderabad assets, we are ensuring greener mobility is built in. On the people front, happy to share that Mindspace REIT has been recognized amongst the 100 Great Place to Work. This is an outcome of our people first policies. On the ESG and sustainability front, we closed FY2026 GRESB assessment, published our FY2026 ESG report, and secured BRSR Core Assurance. Happy to share that we've been accepted as a UN Global Compact participant, reaffirming our commitment to its 10 principles on human rights, labor, environment, and anti-corruption. Seven buildings across Commerzone Yerwada and Kharadi have earned WELL Gold certification. Mindspace Madhapur B8 achieved WiredScore Platinum, recognizing best-in-class digital connectivity and smart infrastructure.

Ramesh Nair: Our EV charging network is live across all our Hyderabad assets, we are ensuring greener mobility is built in. On the people front, happy to share that Mindspace REIT has been recognized amongst the 100 Great Place to Work. This is an outcome of our people first policies. On the ESG and sustainability front, we closed FY 2026 GRESB assessment, published our FY 2026 ESG report, and secured BRSR Core Assurance. Happy to share that we've been accepted as a UN Global Compact participant, reaffirming our commitment to its 10 principles on human rights, labor, environment, and anti-corruption. Seven buildings across Commerzone Yerwada and Kharadi have earned WELL Gold certification. Mindspace Madhapur B8 achieved WiredScore Platinum, recognizing best-in-class digital connectivity and smart infrastructure.

Speaker #5: On the people front, I'm happy to share that Mindspace REIT has been recognized among the 100 great places to work. This is an outcome of our people-first policies.

Speaker #5: On the ESG and sustainability front, we closed the FY26 GRESP assessment, published our FY26 ESG report, and secured BRSR Core assurance. Happy to share that we've been accepted as a UN Global Compact participant, reaffirming our commitment to its ten principles on human rights, labor, environment, and anti-corruption.

Speaker #5: Seven buildings across Commerce Zone, Yerwada, and Kharadi have earned WELL Gold certification. Mindspace Madhapur B8 achieved WiredScore Platinum, recognizing best-in-class digital connectivity and smart infrastructure.

Speaker #5: In partnership with Navi Mumbai Municipal Corporation and Project Mumbai, our plastic and e-waste recyclathon engaged employees, tenants, and the local community through multiple initiatives this quarter.

Ramesh Nair: In partnership with Navi Mumbai Municipal Corporation and Project Mumbai, our plastic and e-waste Recyclathon engaged employees, tenants, and the local community through multiple initiatives this quarter. Let's talk something increasingly critical to our business, artificial intelligence. First on the business and what we believe is the impact on the real estate portfolio. We are strategically investing in AI to strengthen operational efficiency, regulatory compliance, and investor communications. We're not chasing technology, but solving real business problems. These initiatives reduce manual effort, minimize errors, and free our teams for high-value strategic work. On the financial side, we have automated rent roll data conversion into leasing cash flow numbers. We are validating our filings against all REIT regulations before publishing, catching errors and regulatory gaps early. On legal and compliance, we have deployed an AI platform for document review and regulatory analysis. We automated our quarterly SEBI compliance validation.

Speaker #5: Let's talk about something increasingly critical to our business: artificial intelligence. First, on the business—what we believe is the impact on the real estate portfolio.

Speaker #5: We're strategically investing in AI to strengthen operational efficiency, regulatory compliance, and investor communications. We're not chasing technology, but solving real business problems, these initiatives reduce manual effort, minimize errors, and free our teams from high-value and free our teams for high-value strategic work.

Speaker #5: On the financial side, we have automated rent roll data conversion into leasing cash flow numbers. We have validated our findings, we are validating our filings, and we can install REIT regulations. Before publishing, we are catching errors and regulatory gaps early.

Speaker #5: On legal and compliance, we have deployed an AI platform for document review and regulatory analysis. We automated our quarterly SEBI compliance validation—the system now flags what's required and what's satisfied.

Ramesh Nair: The system now flags what's required and what's satisfied. We also monitor SEBI and MCA updates automatically, alerting teams to changes without manual surveillance. Together, these initiatives free our teams from routine work to focus on strategic analysis, stakeholder engagement, and value creation, always with the highest standards of accuracy and governance. On the impact of AI on office leasing, we've been tracking that the lease tenures are definitely not shortening, there's not been an impact there. Lease pre-commitments, again, have not reduced. India's cost advantages of talent and real estate continues. We believe AI will increase demand for higher value human work, not less office demand. Companies still need teams collaborating, innovating, managing clients, making decisions, and training younger talent. All these activities are office intensive. We also believe that AI will create new office occupiers.

Speaker #5: We also monitor SEBI and MCA updates automatically, alerting teams to changes without manual surveillance. Together, these initiatives free our teams from routine work to focus on strategic analysis, stakeholder engagement, and value creation, always with the highest standards of accuracy and governance.

Speaker #5: On the impact of AI on office leasing, we've been tracking that lease tenures are definitely not shortening, so there's not been an impact there.

Speaker #5: Lease pre-commitments, again, have not reduced. India's cost advantages of talent and real estate continue. We believe AI will increase demand for higher-value human work, not reduce office demand.

Speaker #5: Companies still need teams—collaborating, innovating, managing clients, making decisions, and training younger talent. These activities are all office-intensive. We also believe that AI will create new office occupiers, just as SaaS created new office demand over the last decade. AI companies and AI-enabled services firms will become incremental office tenants.

Ramesh Nair: Just as SaaS created new office demand over the last decade, AI companies and AI-enabled service firms become incremental office tenants. AI is also driving productivity, which supports business expansion. More productive firms often grow faster, win more business, and eventually employ more people despite automation. AI adoption itself will require office-based teams. Large organizations will need cross-functional teams working together to redesign processes, train models, and govern data. That often increases collaboration needs. Office work is becoming more collaborative, not less. The office is shifting from a place where individual processing to a place for collaboration, culture, mentoring, and innovation. This strengthens the case for quality offices. AI will actually increase demand for premium offices. Companies will concentrate talent into better workplaces that attract and retain top performers. Flight to quality could accelerate. We are already seeing this in many Western markets. AI is heavily data dependent.

Speaker #5: AI is also driving productivity. With support for business expansion, more productive firms often grow faster, win more business, and eventually employ more people, despite automation.

Speaker #5: AI adoption itself will require office-based teams. Large organizations will need cross-functional teams working together to redesign processes, train models, and govern data. That often increases collaboration needs.

Speaker #5: Office work is becoming more collaborative, not less. The office is shifting from a place for individual processing to a place for collaboration, culture, mentoring, and innovation. This strengthens the case for quality offices.

Speaker #5: AI will actually increase demand for premium offices. Companies will concentrate talent into better workplaces that attract and retain top performers. Flight to quality could accelerate; we're already seeing this in many Western markets.

Speaker #5: AI is heavily data dependent. This supports growth for data centers, cloud infrastructure, and various technology teams, and we've been beneficiaries of this with data centers in our portfolio.

Ramesh Nair: This supports growth for data centers, cloud infrastructure, and various technology teams. We've been beneficiaries of this with data centers in our portfolio. AI, we believe, is currently an augmentation technology rather than a replacement technology. In conclusion, before I close, I want to mark a special milestone. Tomorrow, Mindspace Business Parks REIT completes six years since listing. Six years of building trust with our unit holders, six years of disciplined growth, resilient occupancy, and a portfolio that keeps getting stronger. We have grown into one of India's leading office REITs, and we have done it while staying true to our principles of quality, governance, and long-term value creation. Thank you for your continued confidence in Mindspace Business Parks REIT. I'll now hand it over to Preeti for further financial updates of the quarter.

Speaker #5: AI, we believe, is currently an augmentation technology rather than a replacement technology. In conclusion, before I close, I want to mark a special milestone. Tomorrow, Mindspace REIT completes six years since listing—six years of building trust with our unit holders, six years of disciplined growth, resilient occupancy, and a portfolio that keeps getting stronger.

Speaker #5: We have grown into one of India's leading office REITs, and we have done it while staying true to our principles of quality, governance, and long-term value creation.

Speaker #5: Thank you for your continued confidence in Mindspace REIT. I will now hand it over to Preethi for further financial updates for the quarter.

Speaker #1: Thank you, Ramesh. Good afternoon, everyone. We continue to deliver yet another quarter of strong financial performance, backed by strong operating performance. Robust leasing, as explained by Ramesh, increasing occupancies, healthy releasing spreads, contractual escalations, and strong rental growth have all helped a like-to-like NOI for Q1 FY27 grow 16.2% year-on-year.

Preeti Chheda: Thank you, Ramesh. Good afternoon, everyone. We continue to deliver yet another quarter of strong financial performance, backed by strong operating performance. Robust leasing, as explained by Ramesh, increasing occupancies, healthy re-leasing spreads, contractual escalation, strong rental growth, have all helped a like-to-like NOI for a Q1 FY27 growth 16.2% YOY. Our overall Q1 FY27 NOI, which has grown 27.8% year on year to INR 7,880 million. Revenue from operations for Q1 FY27 increased by 26.4% YOY to INR 9,509 million. We have also demonstrated a track record of delivering healthy distribution growth. As you would see, we have delivered double-digit DPU growth over the last seven consecutive quarters. In fact, this quarter, our distribution saw a strong growth of 25% YOY. This translated to a DPU of INR 6.7 per unit, a growth of 15% YOY. On a like-to-like basis as well, the DPU grew 15.6% YOY.

Preeti Chheda: Thank you, Ramesh. Good afternoon, everyone. We continue to deliver yet another quarter of strong financial performance, backed by strong operating performance. Robust leasing, as explained by Ramesh, increasing occupancies, healthy re-leasing spreads, contractual escalation, strong rental growth, have all helped a like-to-like NOI for a Q1 FY 2027 growth 16.2% YOY. Our overall Q1 FY 2027 NOI, which has grown 27.8% year on year to INR 7,880 million. Revenue from operations for Q1 FY 2027 increased by 26.4% YOY to INR 9,509 million. We have also demonstrated a track record of delivering healthy distribution growth. As you would see, we have delivered double-digit DPU growth over the last seven consecutive quarters. In fact, this quarter, our distribution saw a strong growth of 25% YOY. This translated to a DPU of INR 6.7 per unit, a growth of 15% YOY. On a like-to-like basis as well, the DPU grew 15.6% YOY.

Speaker #1: Our overall Q1, FY27 NOI, which has grown 27.8% year on year to 7880 million INR. Revenue from operations for Q1, FY27 increased by 26.4% by a while, to INR 9509 million.

Speaker #1: We have also demonstrated a track record of delivering healthy distribution growth. As you would see, we have delivered double-digit DPU growth over the last seven consecutive quarters. In fact, this quarter our distribution saw a strong growth of 25% year-on-year.

Speaker #1: This translated to a DPU of 6.7 per unit, or growth of 15% year-on-year. On a like-to-like basis as well, the DPU grew 15.6% year-on-year.

Speaker #1: Our portfolio includes rent today stands at INR 81 per square foot per month, with a healthy mark-to-market opportunity of almost 20%, providing visibility for future rental growth.

Preeti Chheda: Our portfolio in place rent today stands at INR 81 per square foot per month, with a healthy mark-to-market opportunity of almost 20%, providing visibility for future rental growth. It's important to note that our portfolio has seen significant expansion since listing through both organic development and inorganic acquisitions. At the time of listing, we started with 29.5 million square feet of portfolio, which has, over the last six years, grown to 46.2 million square feet. Of this, 7.5 million square feet was added organically through redevelopments, optimizing FSI via new buildings, et cetera. We also successfully acquired 9.2 million square feet from both sponsors and third parties.

Speaker #1: It's important to note that our portfolio has seen significant expansion since listing, through both organic development and inorganic acquisitions. At the time of listing, we started with 29.5 million square feet in our portfolio, which has, over the last six years, grown to 46.2 million square feet.

Speaker #1: Of this, 7.5 million square feet was added organically through redevelopments, optimizing FSI via new buildings, etc. We also successfully acquired 9.2 million square feet from both sponsors and third parties.

Speaker #1: As Ramesh mentioned, we have a strong development pipeline within the portfolio of 9.5 million square feet, which, together with vacant area leasing, contractual escalations, and MTM rental growth, shall add almost ₹17 to ₹18 billion to our NOI in the next three years.

Preeti Chheda: As Ramesh mentioned, we have a strong development pipeline within the portfolio of 9.5 million square feet, which together with vacant area leasing, contractual escalations, MTM rental growth, shall add almost INR 17 to 18 billion to our NOI in the next three years. On the debt side, we have maintained a good balance between leverage and growth. Our well-managed balance sheet helped us grow the portfolio through accretive acquisitions, at the same time keeping our LTV at comfortable levels. Our LTV as on 26 June was almost 30% post recent acquisitions. Our cost of debt remains largely flat sequentially at 7.42% p.a. We may see some increase in funding costs depending on how the macroeconomic and interest rate environment evolves over the coming quarters. You all would have seen the recent tax bill proposing amendments to certain REIT tax provision, which is a very positive development for REIT.

Speaker #1: On the debt side, we have maintained a good balance between leverage and growth. A well-managed balance sheet has helped us grow the portfolio through creative acquisitions, while at the same time keeping our LTV at comfortable levels.

Speaker #1: Our LTV as of June 26 was almost 30%, post recent acquisitions. Our cost of debt remained largely flat sequentially at 7.42%. Down the path, we may see some increase in funding cost, depending on how the macroeconomic and interest rate environment evolves over the coming quarters.

Speaker #1: You all would have seen the recent tax bill proposing amendments to certain REIT tax provisions, which is a very positive development for REITs. The proposal enables REITs to move to the new tax regime with an additional surcharge, but without losing the distribution tax exemption in the hands of unit holders, which is crucial to maintain the attractiveness of this instrument.

Preeti Chheda: The proposal enables REITs to move to new tax regime with an additional surcharge, without losing the distribution tax exemption in the hands of unit holders, which is crucial to maintain attractiveness of this instrument. Also, permitting carry forward of MAT credit should help utilization in the new regime. We are thankful to the government for these proposed reforms, which I believe will go a long way in the growth of these instruments in the country. To conclude, Mindspace REIT, as in the last six years, demonstrated healthy long-term returns. Our total unit holder return CAGR of 15.9% over the last six years reflects Mindspace REIT's ability to generate healthy long-term returns for its unit holders.

Speaker #1: Also, promoting carry forward of MAT credit should help utilization in the new regime. We are thankful to the government for these proposed reforms, which I believe will go a long way in the growth of these instruments in the country.

Speaker #1: To conclude, Mindspace REIT has, in the last six years, demonstrated healthy long-term returns. A total unit holder return CAGR of 15.9% over the last six years reflects Mindspace REIT's ability to generate healthy long-term returns for its unit holders.

Speaker #1: We shall work to maximize returns for our investors with efficient management of our operating assets, the right development strategies, and our upgrade programs, which make our assets the preferred choice for our tenants, an optimal capital structure, and a robust governance structure.

Preeti Chheda: We shall work to maximize returns for our investors with efficient management of operating assets, right development strategies, upgrade programs which make our assets preferred choice for our tenants, optimal capital structure, and a robust governance structure. With this, I hand over the call to the operator to open the floor for questions.

Speaker #1: With this, I hand over the call to the operator to open the floor for questions.

Speaker #2: Thank you so much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may click on the 'Raise Hand' icon from the participants tab on your screen.

Operator: Thank you so much. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may click on the raise hand icon from the participants tab on your screen. We request participants to restrict to two questions each, then return to the queue for more questions. To rejoin the queue, you may click on the raise hand icon again. We will wait for a few minutes until the question queue assembles. We are taking our first question now from Karan Khanna of Ambit Capital. Karan, please go ahead.

Speaker #2: We request participants to restrict themselves to two questions each, and then return to the queue for more questions. To rejoin the queue, you may click on the 'raise hand' icon again.

Speaker #2: We'll wait for a few minutes until the question queue assembles. We're taking the first question now from Karan Khanna of Ambit Capital. Karan, please go ahead.

Karan Khanna: Yeah. Am I audible?

Speaker #3: Yes. Am I audible?

Speaker #2: Yes, Karan.

Operator: Yes, Karan.

Speaker #3: Yeah, so thanks for the opportunity. And just a couple of questions from my side. Firstly, Ramesh, in a recent interview, you spoke about GCCs offering stable income visibility as well as longer tenures.

Karan Khanna: Yeah. Thanks for the opportunity. Just a couple of questions from my side. Firstly, Ramesh, in a recent interview, you spoke about GCCs offering stable income visibility, as well as longer tenures. Given that context, can you talk a bit more about GCC contribution in your revenue mix, and more importantly, absolute rental per square feet, how is that different for GCCs versus non-GCCs, and how has that changed the value across your portfolio? As a follow-up, amid all that's going on in West Asia, how are incremental trends that you're seeing in terms of interactions and deal closures, specifically with your MNC tenants?

Speaker #3: So, given that context, can you talk a bit more about GCC contribution in your revenue mix? And, more importantly, absolute rental per square foot—how is that different for GCCs versus non-GCCs, and how has that changed the veil across your portfolio?

Speaker #3: And as a follow-up, amid all that's going on in West Asia, what are the incremental trends that you're seeing in terms of interactions and deal closures, specifically with your MNC tenants?

Speaker #1: So today, GCCs currently contribute around 53.2% of our rentals. We also looked at who the other occupiers within IT services are, and we realized that foreign MNCs today have close to 18% of our rentals.

Ramesh Nair: Today, GCCs, Karan, contribute around 53.2% of our rentals. We also looked at who are the other people within the IT services, and we realized that foreign MNCs today have close to 18% of our rentals. In that foreign MNCs 18%, around 9% is IT services, and the domestic Indian MNCs, again, is around 26%. In that, again, 9%. 9% of foreign third-party IT services and 9% of Indian IT services, that's around 18% of IT services. This used to be late twenties, mid-twenties, a couple of 2, 3 years back. That's kind of come down. For us, we've been big beneficiaries of Hyderabad being the most sought-after GCC destination.

Speaker #1: In that, foreign MNCs are at 18%. Around 9% is IT services. And the domestic Indian MNCs, again, are around 26%. In that, again, 9%. So, 9% of foreign third-party IT services and 9% of Indian IT services.

Speaker #1: That's around 18% of IT services. This used to be in the late 20s, mid-20s, a couple of years back—two or three years back. So that's kind of come down.

Speaker #1: So for us, we've been big beneficiaries of Hyderabad being the most sought-after GCC destination. In the last two years, every data point which has come up—all the IPC reports, various NASSCOM reports—show that in a year, at least 100 new GCCs enter the market, and nearly 46% of them have chosen Hyderabad.

Ramesh Nair: In the last 2 years, every data point which has come up, all the IPC reports, various NASSCOM reports, show that in a year, at least 100 GCCs, new GCCs, enter the market, and nearly 46% of them have chosen Hyderabad. Again, we have benefited there given all the supply we had there. The very fact that both our under-construction buildings, B 1.5 million square feet fully pre-leased to 1 GCC, and B 8, which is again, pre-leased to 4 GCCs. That's on our portfolio. On the West Asia, the war front, April was a little slow month because people were not traveling, decisions were not being taken. That kind of changed from May onwards. It's kind of back to normal.

Speaker #1: So again, we have benefited there, given all the supply we had there. The very fact that both are under construction buildings B1, 1.5 million square feet, fully pre-leased to one GCC.

Speaker #1: And B8, which is again pre-leased to four GCCs. So that's on our portfolio. On the West Asia board front, April was a little slow month because people were not traveling and decisions were not being taken.

Speaker #1: But that kind of changed from May onwards. It's kind of back to normal. A lot of people who had slowed down decisions in April came back and closed those deals in May and June.

Ramesh Nair: A lot of people who had slowed down decisions in April kind of came back and closed those deals, in May and June. There was a few discussions around a little bit of cautious CapEx deployment. That is also now behind us. Whatever little slowdown we saw in decision-making is kind of, like I said, behind us. We saw a little bit of cost increase. Around 6.5% is what our procurement teams tell me in terms of. Most of this cost increase came in RMC, tiles, marbles, paints. These are some of the items which contributed to that 6.5% construction cost increase.

Speaker #1: There was a few discussions around a little bit of cautious capex deployment. That is also now behind us. And whatever little slowdown we saw in decision making, is kind of like I said, behind us.

Speaker #1: We saw a little bit of cost increase, around 6.5% is what our procurement teams tell me, in terms of so most of this cost increase came in RMC, tiles, marbles, paints, these are some of the items which contributed to that, 6.5% construction cost increase.

Speaker #3: Sure. And secondly, Ramesh, if you look at the kind of leasing traction that we've seen over the past year, here in the house, in addition to GCCs, I think two segments have really been driving a lot of the leasing.

Karan Khanna: Sure. Secondly, Ramesh, if we look at the kind of leasing traction that we have seen over the past year and a half. In addition to GCCs, I think two segments have really been driving a lot of the leasing. One is leasing to hotel assets. Today you have about 1.5 million square feet, which is already leased, two hotel assets that Ascendas owns. Secondly, if I look at the 0.9 million square feet of gross leasing during the quarter, including 0.2 million square feet of new leasing, Yeah, it appears most of it is happening to the co-working players. If you can talk a bit about both the hotels and co-working in terms of the IRRs and the lease terms. When you think about future expansion, say, in Chennai, would you also look to scale up hotels in this market?

Speaker #3: One is leasing to hotel assets. So today, you have about 1.5 million square feet, which is already leased to hotel assets that Shelley owns.

Speaker #3: And secondly, if I look at the 0.9 million square feet of gross leasing during the quarter, including 0.2 million square feet of new leasing, it appears most of it is happening with the coworking players.

Speaker #3: So, if you can talk a bit about both the hotels and coworking in terms of the IRRs and the lease terms, and when you think about future expansion—say in Chennai—would you also look to scale up hotels in this market?

Speaker #3: And in terms of all your expansion in hotels, will it be through Shelly itself, or will you be looking to partner with other hospitality players as well?

Karan Khanna: In terms of all your expansion in hotels, will it be through Chalet itself, or will you be looking to partner with other hospitality players as well?

Speaker #1: So, from a leasing traction point of view, Flex last quarter—I was reading various IPC reports—I think around 27% of the demand was in Flex.

Ramesh Nair: From a leasing traction point of view, flex, last quarter I was reading various IPC reports. I think around 27% of the demand was in flex. Although our portfolio currently stands at around 8.5% of the total space we have leased is to flex players. Two, three things on the flex market. Today, a lot of clients are also asking us if we could offer a flex solution for them. We know how to build, we know how to manage, we know how to lease. Those inquiries are coming. We have already been doing fitted-out deals for our clients for many years, so there is no big rocket science around that, we have the internal capabilities to offer those flex leases to our clients.

Speaker #1: Although our portfolio currently stands at around 8.5% of the total space we have leased to Flex players. Two, three things on the Flex market.

Speaker #1: Today, a lot of clients are also asking us if we could offer a flex solution for them. We know how to build, we know how to manage, we know how to lease.

Speaker #1: So, those enquiries are coming. We have already been doing, figured-out deals for our clients for many years, so there's no big rocket science around that.

Speaker #1: And we have the internal capabilities to offer those flex deals to our clients. On the hospitality side, currently, including the announcements, we have close to 1.5 million square feet, totaling the five hotels which we already have in the portfolio.

Ramesh Nair: On the hospitality side, currently, including the announcements, we have close to 1.5 million square feet totaling the 5 hotels which we already have in the portfolio. This will be close to 1,150 keys. We have a very good relationship with Chalet. All these deals are done at arm's length, fully evaluated by various independent valuers and consultants. We are open to doing deals with other players also. Hotel kind of opportunities in Chennai, we still need to evaluate those.

Speaker #1: This will be close to 1,200, 1,150 keys. We have a very good relationship with Shelley. All these deals are done at arm's length, fully valuated by various independent valuers and consultants.

Speaker #1: We are open to doing deals with other players also. Hotel kind of opportunities in Chennai, we still need to evaluate those.

Speaker #3: Sure. So, one more follow-up from Priti, but I can come back in the queue.

Karan Khanna: Sure. I have one more follow-up for PC, but I'll come back in with you for that.

Speaker #2: Thank you so much, Karan. We are taking the next question now from Deepsha of 361 Capital. Deep, would you like to go ahead, please?

Operator: Thank you so much, Karan. We are taking a next question now from Deep Shah of 361 Capital. Deep, would you like to go ahead, please?

Operator: Thank you so much, Karan. We are taking a next question now from Deep Shah of 360 ONE Capital. Deep, would you like to go ahead, please?

Speaker #4: Hi, thanks for the opportunity. So Ramesh, the first question is actually on your opening commentary, where you said that in Madhapur, you are even testing the waters at 130.

Deep Shah: Hi. Thanks for the opportunity. Ramesh, the first question is actually on your opening commentary where you said that Madhapur, you are even testing the waters at 130. Last quarter, we had seen leasing at 120, and I see that there are very little expiries. Is this for that small portion of space which is left, or is this for early renewals? The context is, if this is for early renewals, it just shows so much more confidence in the market that tenants are coming and happy to discuss even at these rates, even when the renewal is not due. If you could give some more color on it, that would be very useful.

Speaker #4: Last quarter, we had seen leasing at 120, and I see that there are very few expiries. So, is this for that small portion of space which is left, or is this for early renewals?

Speaker #4: The context is, if this is for early renewals, it just shows so much more confidence in the market that tenants are coming and happy to discuss even at these rates, even when the renewal is not due.

Speaker #4: So, if you could give some more color on it, that would be very useful.

Speaker #1: Yeah, Deep, you would have heard of those land deals, which the government auctioned at ₹150 crore and ₹240 crore. Anika, these are all land parcels which are less than two minutes away from our park.

Ramesh Nair: Yeah, Deep, you would have heard of those land deals which the government auctioned at INR 150 crore and INR 240 crore an acre. These are all land parcels which are less than 2 minutes away from our park. That market is seeing that kind of traction today, given all the demand. To your question with regards to new deals happening, actually, we are closing one at INR 132 now. Some of our older buildings, we are easily getting rentals of around INR 115. We are able to actually upgrade. Many of the newly upgraded buildings we believe will fetch even more. Like I mentioned in the call, our current average rental throughout the park is INR 80, and whenever any tenant comes up for expiries, we believe we should be able to go to those kind of numbers, ranging from INR 110 to maybe around INR 132.

Speaker #1: So that market is seeing that kind of traction today. Given all the demand, to your question with regards to new deals happening, actually, we're closing one at 132 now.

Speaker #1: Some of our older buildings are easily getting rentals of around ₹115. We are actually able to upgrade many of the newly renovated buildings, and we believe we'll fetch even more.

Speaker #1: So like I mentioned in the call, our current average rental throughout the park is 80. And whenever any tenant comes up for expiry, we believe we should be able to go to those kinds of numbers, ranging from 110 to maybe around 132.

Speaker #4: Right. This is interesting. The second question is on our recent acquisition. So, the first one amongst those—the Financial District Square building—now that we've decided to have Shelly Hotels there, there is very little space left there, right?

Deep Shah: Right. This is interesting. The second question is on our recent acquisition. The first one among those, the Financial District Square building. Now that we have decided to have Chalet Hotels there is very little space left there, right? Is this understanding correct? The follow-up would be that the rentals would start by when for this space? If I can just continue, at Pallikaranai and One Radial, how should I think about occupancy? Last quarter, Pallikaranai was 70%, now it is 74%. What is the idea here? The idea here is to maximize rent? The idea here is to fill up some space, maybe say at 80% to 85%, and then maximize rent? If you could lay out some strategy as to how should we think about occupancy. That's all from my side. Thank you.

Speaker #4: Is this understanding correct? And the follow-up would be: when would the rentals start for this space? And if I may just continue, at Polikarnayan Radial, how should we think about occupancy?

Speaker #4: So last quarter, Polikarnayan was 70. Now it's 74. What is the idea here? The idea here is to maximize rent, the idea here is to fill up some space, and maybe stay at 80, 85%, and then maximize rent.

Speaker #4: If you could lay out some strategy as to how we should think about occupancy? That's all from my side. Thank you.

Speaker #1: So Deep, this deal with Shelley is 260,000 square feet, which means one full tower gets leased. In the other tower, we still have around 100,000 odd square feet vacant, where we are seeing a good amount of enquiries, given that in the other micro market, Madhapur, institutional vacancy rates are less than 2%.

Ramesh Nair: Deep, this deal with Chalet is 260,000 square feet, which means one full tower gets leased. The other tower, we still have around 100,000 odd square feet vacant, which we are seeing some good amount of inquiries, given that the other micro-market, Madhapur, institutional vacancy rates are less than 2%. We should be able to fill that over the next few months. On our Chennai leasing strategy, every time we do a deal, we increase the rentals by around INR 2, 3. That is going to be our strategy. Today's ready space vacancy is around 14.5 lakh square feet, 11 lakh at One Radial, and 3.5 lakh at Commerzone. Very active inquiry. I spoke about where a global BFSI GCC is talking to us for nearly 450,000 square feet. There is another Japanese bank which is talking to us for 100,000 square feet.

Speaker #1: So, we should be able to fill that over the next few months. On our Chennai leasing strategy, every time we do a deal, we increase the rentals by around 2 to 3 rupees.

Speaker #1: So that's going to be our strategy. So today, ready space vacancy is around 14 and a half lakh square feet, 11 lakhs at one radial, and 3 and a half lakh at commerce zone.

Speaker #1: Very active enquiry. I spoke about where a global BFSI GCC is talking to us for nearly 450,000 square feet. There is another Japanese bank which is talking to us for 100,000 square feet.

Speaker #1: Another engineering company talking to us for 100,000. A global Big Four consulting firm talking to us. So, 250,000 square feet. Many, many enquiries. And the team is kept a shade in front of me.

Ramesh Nair: Another engineering company talking to us for 100,000 square feet. A global Big Four consulting talking to us of 250,000 square feet. Many inquiries. The team has kept a sheet in front of me. There are around 14 inquiries right now in the market. We are reasonably confident this vacant space of 14.5 lakh square feet in both these parks will get leased by end of this financial year.

Speaker #1: There are around 14 enquiries right now in the market. And we are reasonably confident this vacant space of 1.45 million square feet in both these parks will get leased by the end of this financial year.

Speaker #4: Great, Ramesh. Thank you so much. Thank you so much, and all the best.

Deep Shah: Great, Ramesh. Thank you so much.

Ramesh Nair: Thank you so much.

Deep Shah: All the best.

Speaker #1: Thanks, Deep.

Ramesh Nair: Thanks, Deep.

Speaker #2: Thank you so much, Deep. We'll allow the next participant. We have Murtaza Arsivala on. Please go ahead.

Operator: Thank you so much, Deep. We'll allow next participant. We have Murtuza Arsiwalla of Kotak. Murtuza, please go ahead.

Murtuza Arsiwalla: Hi, Ramesh. Just want to check on both these deals with Chalet. What is the kind of rental, and what is the kind of capital cost that you will incur? What's the kind of yield on cost that we are looking at? Also, I'm assuming the Hyderabad one being a sort of repurposed building, it essentially forms part of the completed area, whereas Pune will be part of the under-construction portfolio that you have, or future portfolio that you have in Yerwada.

Speaker #5: Hi, Ramesh. I just want to check on both these deals with Shelley. What is the kind of rental, and what is the kind of capital cost that you will incur?

Speaker #5: So what's the kind of deal or on-cost that we are looking at? Also, I'm assuming the Hyderabad one, being a sort of repurposed building, essentially forms part of the—whereas Pune will be part of the under-construction portfolio that you have, or the future portfolio that you have, in Yerwada.

Ramesh Nair: Whenever we do any deal with Chalet, it's always based on market rentals and the amount of construction cost we incur. If it is nearly a INR 4,500 kind of construction cost, we charge them office rental. If it's lesser construction specs because they have their own specs, we charge on a proportionate basis, lesser rentals. We also believe that there's so many extra benefits we get in a park by doing a hotel deal. The overall halo effect we get from the overall premiumization of the entire park. Today, GCCs, there's so many visitors who keep traveling from across the world who come in. They all want to have a hotel close by. F&B from the hotels, helpers, meeting rooms, training rooms. The entire vibrancy of the park goes up. Multiple advantages we get as office tenants by having a hotel in the park.

Speaker #1: So, whenever we do any deal with Shelley, it's always based on market rentals and the amount of construction cost we incur. If it is nearly a ₹4,500 kind of construction cost, we charge them an office rental.

Speaker #1: If it's lesser construction specs, because they have their own specs, then we charge on a proportionate basis—lesser rentals. We also believe that there are so many extra benefits we get in a park by doing a hotel deal.

Speaker #1: The overall halo effect we get from the overall premiumization of the entire park to the GCCs—there are so many visitors who keep traveling from across the world who come in.

Speaker #1: They all want to have a hotel close by. F&B from the hotels helps us with meeting rooms and training rooms. The entire vibrancy of the park goes up.

Speaker #1: So, multiple advantages we get as office tenants by having a hotel in the park.

Speaker #5: Fair, fair. And second, pretty much a question for you now that we've got the government passed the amendment on the tax. Could you just clarify how does Mindspace's taxation sort of get impacted?

Murtuza Arsiwalla: Fair. Second, Preeti, a question for you. Now that we've got the government pass the amendment on the tax, could you just clarify, how does Mindspace's taxation sort of get impacted or otherwise because of the most recent amendment?

Speaker #5: Or otherwise, because of the most recent amendment?

Speaker #6: Right. So I think that's an extremely welcome reform. In fact, we have been representing to the government for the last couple of months for this.

Preeti Chheda: Right. I think that's an extremely welcome reform. In fact, we have been representing to the government for the last couple of months for this. Two things happen. Firstly, it enables us to move to the new tax regime. Today, all our SPVs were in the old regime, where we were paying taxes between 29% to 35%. The SPVs, which had turnover more than INR 400 crore, were all on 35% tax. Most of the SPVs, especially all the larger ones, are at INR 400 crore plus, therefore they were all on 35% tax. They all move now to, of course, this is all subject to when we move to the new tax regime. It moves to 28.6%, as has been proposed. That's a big saving, I would say, for Mindspace REIT.

Speaker #6: So, two things happen. Firstly, it enables us to move to the new tax regime. So today, all our SPVs were in the old regime, where we were paying taxes between 29% to 35%.

Speaker #6: The SPVs which had turnover of more than ₹400 crore were all on 35% tax. So, most of the SPVs, especially all the larger ones, are at ₹400 crore plus.

Speaker #6: So, therefore, they were all on 35% tax. So, they all move now to—of course, this is all subject to when we move to the new tax regime.

Speaker #6: So, it moves to 28.6%, as has been proposed. So, that's a big saving, I would say, for Mindspace REIT. Second is, now while this overall is a very positive impact for us, it's not been very material—which is allowing carry forward of MAT credit.

Preeti Chheda: Second is, now while this overall is a very positive impact for us, it's not been very material, which is allowing carry-forward of mat credit. We did not have too much mat credit accumulated, but whatever little we have, we'll be able to carry that forward in the new tax regime. Otherwise, I think both of these are extremely positive development for REITs in general.

Speaker #6: We did not have too much MAT credit accumulated, but whatever little we have, we'll be able to carry that forward in the new tax regime.

Speaker #6: But otherwise, I think both of these are extremely positive developments for REITs in general.

Speaker #5: Wow, absolutely clear that dividends will remain exempt in the hands of the government.

Murtuza Arsiwalla: Now absolutely clear that dividends will remain exempt in the hands of-

Preeti Chheda: Yes, absolutely. That was the whole premise for this reform.

Speaker #6: Yes, yes. Absolutely. Yeah, yeah. That was the whole premise for this reform.

Speaker #5: Fantastic. Thank you so much, Priti.

Murtuza Arsiwalla: Fantastic. Thank you so much, Preeti.

Speaker #6: All right. Thanks.

Preeti Chheda: All right. Thanks.

Speaker #2: Thank you. We have Yashas Gilganchi of BOB Capital Markets. Yashas, please go ahead.

Operator: Thank you. We have Yashas Gilganchi of BOB Capital Markets. Yashas, please go ahead.

Speaker #3: Good afternoon, team. Thank you for taking my questions. This builds on something a colleague of mine just asked a little earlier. I understand that economic occupancy was down over the quarter, as you expanded total leasable area by upwards of 12%.

Yashas Gilganchi: Good afternoon, team. Thank you for taking my questions. Just building on something a colleague of mine just asked a while earlier. I understand that economic occupancy was down over the quarter as you expanded completely leasable area by upwards of 12%. What I would like to understand is how you think the ramp-up of occupancy is likely to be at the portfolio level. Say, at what level do you expect to be at the end of this financial year? Also, since most of the lease-up is likely to be driven by your assets in Chennai, what pace do you think your in-place rents are likely to grow at over the financial year, and maybe even through FY29?

Speaker #3: What I would like to understand is how you think the ramp-up of occupancy is likely to be at the portfolio level. For example, at what level do you expect to be at the end of this financial year?

Speaker #3: And also, since most of the lease-up is likely to be driven by your assets in Chennai, what pace do you think your in-place rents are likely to grow at over the financial year?

Speaker #3: And maybe even through FY29.

Speaker #1: So, in terms of occupancy, right now, without adding our acquisitions, we're at 95.8%. We believe by the end of this year, we will come closer to around 97%, given the traction which we are seeing in the Chennai market.

Ramesh Nair: In terms of occupancy, right now, without adding our acquisitions, we're at 95.8%. We believe by end of this year, we will come closer to around 97%, given the traction which we are seeing in the Chennai market. The other markets, you all know that we don't have much space available in Pune or in Madhapur, like I mentioned in my opening speech. In-place rentals, where every market we are seeing the market kind of rentals go up. One interesting thing which I started seeing in the last month or so is companies like JLL today are coming out with relevant stock and relevant vacancy data. We always used to track this 950 million square feet data and say vacancy is 15%.

Speaker #1: In the other markets, you all know that we don't have much space available in Pune or in Madhapur, like I mentioned in my opening speech.

Speaker #1: In-place rentals, where in every market we're seeing the market rentals go up. One interesting thing that I started seeing in the last month or so is companies like JLL today are coming out with relevant stock and relevant vacancy data.

Speaker #1: We always used to track this 950 million square feet data and say vacancy is 15%. But when we start looking at relevant vacancy, it drops down to 9%, 8%, 7% in all these markets.

Ramesh Nair: When we start looking at relevant vacancy, it drops down to 9%, 8%, 7% in all these markets, which basically shows why rentals across all the cities are going up. Two years back, we were doing deals at INR 75, INR 78 in Hyderabad, and today, like I mentioned, comfortably doing deals INR 120, INR 130 kind of numbers. We definitely believe in all these markets, rentals will go up. Although our strategy obviously is not to lose any client with high rentals. We still will do the deals and get our occupancies up.

Speaker #1: Which basically shows why rentals across all the cities are going up. Two years back, we were doing deals at 75, 78 in Hyderabad, and today, like I mentioned, we're comfortably doing deals at 120, 130 kind of numbers.

Speaker #1: So we definitely believe that in all these markets, rentals will go up. Although our strategy, obviously, is to not lose any client with high rentals.

Speaker #1: So we will still do the deals and get our occupancies up.

Speaker #3: Okay, that's clear. And with approximately 58% of your debt expiring through FY29, how would you expect your debt composition to change, especially given the volatility in the markets today?

Yashas Gilganchi: Okay. That's clear. With approximately 58% of your debt expiring through FY 2029, how would you expect your debt composition to change? Especially given the volatility in the markets today. Would you expect to lock in a bigger portion of your debt fixed rates?

Speaker #3: Would you expect to lock in a larger portion of your debt at fixed rates?

Speaker #6: So I think that will depend on which deals are coming our way. We are, today, at about 60% fixed cost rate at the REIT level, and 43% is variable.

Preeti Chheda: I think that will depend on which other deals are coming our way. We are today at about 60% fixed cost debt at the REIT level, and 40 is variable. In between, I would say, for the last couple of months, we actually got into a scenario where variable cost was cheaper than the fixed cost rate. At that point in time, it made sense to lock in more of variable cost rate than fixed cost. I think as we move along, we'll have to keep a watch on the interest rate, and if interest rates are actually cooling off, then obviously it makes sense to lock for a fixed cost. We'll keep our strategy flexible to just see what is the most optimum thing for us to do.

Speaker #6: In between, I would say for the last couple of months, we actually got into a scenario where variable cost was cheaper than the fixed cost rate.

Speaker #6: So at that point in time, it made sense to lock in more of the variable cost rate than the fixed cost. But I think as we move along, we'll have to keep a watch on the interest rate.

Speaker #6: And if interest rates are actually cooling off, then obviously it makes sense to lock in for a fixed cost. So we'll keep our strategy flexible to just see what is the most optimum thing for us to do.

Speaker #6: But as I said, we will keep playing between variable and fixed, depending on which is giving us a better term. But overall, I would say, as I highlighted even last time, 60 to 75 percent fixed-cost debt is what we would want to achieve.

Preeti Chheda: As I said, we will keep playing between variable and fixed, depending on which is giving us better term. Overall, I would say, as I highlighted even last time, 60% to 75% fixed cost debt is what we would want to achieve. Then keep 20% to 25% flexible for us to keep playing around.

Speaker #6: And then keep 20 to 25 percent flexible for us to keep playing around.

Speaker #3: Understood. Thank you very much.

Yashas Gilganchi: Understood. Thank you very much.

Speaker #6: Yeah. Thanks.

Preeti Chheda: Yeah. Thanks.

Speaker #2: Thank you, Yashas. We'll take our next question now from the line of Pritesh Sheth of Axis Capital. Pritesh, please unmute your microphone.

Operator: Thank you, Yashas. We will take our next question now from the line of Pritesh Sheth of Axis Capital. Pritesh, please unmute your microphone.

Speaker #5: Yeah, I hope I'm audible. So, thanks for the opportunity. First question on the pre-leasing that we have done in the Hyderabad assets: for the upcoming ones, what are the rentals that we have locked in there, considering that now we are talking about 110 to 130? I just wanted to understand what are the rentals for those pre-leased portions.

Pritesh Sheth: Hope I'm audible.

Operator: Yes.

Pritesh Sheth: Thanks for the opportunity. First question on the pre-leasing that we have done in Hyderabad assets, the upcoming ones. What are the rentals that we have locked there? Considering that now we are talking about 110 to 130. I just wanted to understand what are the rentals for those pre-leased portion. Second question is on the gap in terms of distribution. I think since last 6, 8 quarters, our NDCF is not equal to what we are distributing. This quarter, I think, the NDCF from SPV to REIT, there's a gap of around INR 20 odd crores. Just want to understand the reason for that and how should we think about the trajectory going forward here?

Speaker #5: And second question is on the gap in terms of distribution. I mean, I think since the last six to eight quarters, our NDCF is not equal to what we are distributing.

Speaker #5: And this quarter, I think the NDCF from SPV to REIT, there's a gap of around ₹20-odd crores. So, just wanted to understand the reason for that.

Speaker #5: And how should we think about the trajectory going forward? Yeah.

Speaker #1: So, Hyderabad—with the office buildings, we have a total of close to 3.2 million square feet. That's 1.5 million in one building and 1.7 million in the other.

Ramesh Nair: Hyderabad, with the office buildings, we have a total of close to 32 lakh square feet. That's 15 lakhs in one building and 17 lakhs in the other. We started leasing around 1 and a half years back at around the 82 rupee mark. We have done deals at multiple points, 110, 115, 128, and the last deal is close to 132 rupees. That's the range in which we have done the deals. For the NDCF, I'll let Priya.

Speaker #1: We started leasing around one, one and a half years back at around the 82-rupee mark, and we have done deals at multiple points—110, 115, 128.

Speaker #1: And the last deal is close to ₹132. So that's the range in which we have done the deals. For the NDCF, I'll let Pritesh answer.

Speaker #6: Yeah, hi. So, particularly for this quarter, you would see some amount getting retained for two, three reasons. The first is: in Q City, which is the acquisition we did last year around the same time, we are not able to pull out cash until, of course, we sort out the structure, because it's a cash-positive entity.

Preeti Chheda: Hi. Particularly for this quarter, you would see some amount getting retained for 2, 3 reasons. The first is, in Q-City, which is the acquisition which we did last year, same time. There we are not able to pull out cash till, of course, we sort out the structure because it's a cash positive entity and since there's no debt, we're not being able to do ROC. Because it has accumulated losses, we're not able to pull out PAT. We're already working on a cap reduction and other structuring options to see how we pull out. That's one reason why some NDCF has remained at the SPV level. Second is mainly, I would say, we have consciously kept aside some money. Not that there is any immediate plan, but for any kind of unforeseen working capital movements, et cetera, which sometimes become difficult to predict.

Speaker #6: And since there's no debt, we're not being able to do ROC. And then, because it has accumulated losses, we are not able to pull out that.

Speaker #6: We are already working on a cap reduction and other structuring options to see how we can pull out. So, that's one reason why some debt and some NDCF have remained at the SPV level.

Speaker #6: Second is mainly, I would say we have consciously kept aside some money—not that there is any immediate plan, but for any kind of unforeseen working capital movements, etc., which sometimes become difficult to predict. We have kept aside a small amount.

Preeti Chheda: We have kept aside small amount, not that it's any material. That's been one reason. Similarly, for this quarter also, you will see about INR 30 odd crore has not been distributed. That's again a mix of Q-City, Maxspace, that's the SPV, and also some working capital that we want to keep aside. Broadly, that's the reason.

Speaker #6: Not that it's any material, but that's been one reason. Similarly, for this quarter also, you will see about ₹30 crore has not been distributed.

Speaker #6: That's again a mix of Q City, Maxsoft—that's the SPV—and also some working capital that we want to keep aside. So, broadly, that's the reason.

Speaker #5: Oh, got it. So, even going forward as well, we should assume like 97 percent to get distributed, rather than 100 percent?

Pritesh Sheth: Got it. Even going forward as well, we should assume like maybe 7% to get distributed rather than 100%?

Preeti Chheda: Yeah, I would say anywhere around similar number is what you can because it will make sense for us to keep a little aside for any of these unforeseen moments, as I said. By and large, I would say about anywhere on 96%, 97%, we've continuously distributed for the last two years and should continue to do so.

Speaker #6: Yeah, I would say anywhere around a similar number is what you can, because it will make sense for us to keep a little aside for any of these unforeseen movements, as I said.

Speaker #6: But by and large, I would say anywhere around 96, 97, we've continuously distributed for the last two years and should continue to do so.

Speaker #5: Sure, perfect. And just on Hyderabad again, sorry—so, average for these pre-leased areas, 32 lakh should be 100, 110 on average?

Pritesh Sheth: Sure. Perfect. Just on Hyderabad again, sorry. Average for these pre-leased area, INR 32 lakh, should be INR 100 to 110 on an average?

Speaker #1: We'll do a calculation and come back to you, Yashas. Should be around that—around that.

Ramesh Nair: We'll do a calculation and come back to you.

Pritesh Sheth: Okay. No worry.

Ramesh Nair: Should be around that.

Pritesh Sheth: Sure.

Ramesh Nair: Around that, yeah.

Speaker #5: Yeah, sure, sure. And just on these new developments that we have announced, especially on Airoli West—this is vacant land we had, or are we doing some redevelopment there?

Pritesh Sheth: Sure. Just on these new developments that we have announced, specifically on Airoli West, this is a vacant land we had, or we are doing some redevelopment there? Because earlier.

Speaker #5: Because earlier, I.

Speaker #1: This was vacant land we had. So, as I mentioned, our occupancy in that park is 98% plus; there’s no space available.

Ramesh Nair: This was a vacant land we had. This is, like I mentioned, our occupancy in that park is 98% plus. There's no space available. All the tenants who are there, some of them have expansion plans. Some of them definitely have been asking us, Do you have any space there? That was the logic. We had some excess land where we're building this asset.

Speaker #1: All the tenants who are there, some of them have expansion plans. Some of them have definitely been asking us, do you have any space there?

Speaker #1: So, that was the logic. We had some excess land where we're building this asset.

Speaker #5: Sure. And the Pune one is in which asset? Sorry, I couldn't recollect.

Pritesh Sheth: Sure. The Pune one is in which asset? Sorry, I couldn't recollect.

Speaker #1: So Pune is in the commerce zone, Yerwada, where we're putting up a 400,000 square feet office building. And this will be a best-in-class office space.

Ramesh Nair: Pune is in Commerzone Yerwada, where we are putting up a 400,000 square feet office building, and this will be a best-in-class office tower.

Speaker #5: Sure. Got it. Perfect. Then, thanks. That's it from my side. All the rest, yeah.

Pritesh Sheth: Sure. Got it. Perfect then. Thanks. That's it from my side. All the best. Yeah.

Speaker #1: Thank you.

Ramesh Nair: Thank you.

Speaker #6: Thank you.

Preeti Chheda: Thank you.

Speaker #2: Thank you, Pritesh. We're taking the next question now from the line of Parvesh Kazi. Parvesh, would you like to unmute your microphone, please?

Operator: Thank you, Pritesh. We're taking our next question now from the line of Parvez Qazi of New India Assurance Group. Parvez, would you like to unmute your microphone, please?

Speaker #7: Hi, good evening. Thanks for taking my question, and congratulations on the great set of numbers. I have a couple of questions from my side. First, regarding the new developments—you've announced two offices and two new hotels—by when do we expect construction to start there?

Parvez Qazi: Hi. Good evening. Thanks for taking my question, and congratulations for the great set of numbers. Couple of questions from my side. First, the new developments that we have announced, two offices and two new hotels, by when do we expect construction to start there?

Speaker #1: So, the first hotel, which is in Hyderabad, is an existing structure that needs to be repurposed for a hotel. So, that work starts immediately.

Ramesh Nair: The first hotel, which is in Hyderabad, this is an existing structure, which needs to be kind of repurposed for a hotel. That work starts immediately. That's on track. Our Navi Mumbai, 1.1 million square feet, Mindspace Airoli West, we have submitted plans for both MIDC and MoEF. MIDC is expected in the next 3 odd months, 3 months from there, we'll get the MoEF approval. From that time onwards, we're looking at around two and a half to 3 years to finish the building. Pune, again, we've just got the approvals for both those. We will be starting construction immediately.

Speaker #1: So that's on track. Our Navi Mumbai, 1.1 million square feet in Airoli West—we have submitted the plans for both the MIDC and MOEF. MIDC approval is expected in the next three-odd months.

Speaker #1: And three months from there, we'll get the MOEF approval. And from that time onwards, we're looking at around two and a half to three years to finish the building.

Speaker #1: Pune, again, we've just got the approvals for both of those. So we will be starting construction immediately.

Speaker #7: Sure. And Mall Park, the cost of all these will be closer to about ₹1,300-odd crores. Would that be a fair assessment?

Parvez Qazi: Sure. Ballpark, the cost of all these will be closer to about INR 1,300 odd crore. Would that be a fair assessment?

Speaker #1: So it depends again on the different types of construction costs which we are going to be incurring. Right now, the calculation is between ₹1,000 to ₹1,050 crores.

Ramesh Nair: It depends, again, on the different types of construction costs which we are going to be incurring. Right now, the calculation is between INR 1,000 to 1,050 crore.

Speaker #7: Sure. And lastly, you mentioned we are in talks with a global BFSI GCC for a 0.45 million square foot area. Is this in Chennai, or someplace else?

Parvez Qazi: Sure. Lastly on, you mentioned we are in talks with a global BFSI GCC for a 0.45 MSF area. Is this in Chennai or someplace else?

Speaker #1: Yeah. This is in Chennai.

Ramesh Nair: Yeah, this is in Chennai.

Speaker #7: Sure. So then, the last question is: overall, across Pallikaranai and One Radial, we have about 1.75 million square feet yet to be leased. What is your estimate as to when we can reach, let's say, maybe 90 percent occupancy across both these assets?

Parvez Qazi: Sure. The last question is, overall, across Pallikaranai and One Radial, we have about 1.75 million square feet yet to be leased. What is your estimate by when, let's say, we can move to maybe 90% occupancy across both these assets?

Speaker #1: So, like I said, Parvesh, we have around 1.45 to 1.5 million square feet vacant across both these parks. And by the end of this year, which is March 31, 2027, we are reasonably confident that we should be closer to the 100 percent mark.

Ramesh Nair: Like I said, Parvez, we have around 14.5 lakh, 15 lakh square feet vacant across both these parks. By end of this year, which is 31 March 2027, we are reasonably confident that we should be closer to the 100% mark.

Speaker #7: Great. And all the best for the future.

Parvez Qazi: Great, all the best for future.

Speaker #1: Thank you.

Ramesh Nair: Thank you.

Speaker #2: Thanks, Parvesh. We have Jatin Kalra from Bank of America with his question now. Jatin, please go ahead.

Operator: Thanks, Parvez. We have Jatin Kalra of Bank of America with his question now. Jatin, please go ahead.

Jatin Kalra: Hi. Hi, Ramesh. Hi, Preeti. Congrats on the quarter. Most of my questions have been answered. I just have one for Preeti. Preeti, from the 4.7 million square feet deliveries that we have around end to FY27 and end of FY27, that would probably give you around INR 5 to 6 billion of additional NOI. I just wanted to understand against that, when those assets get under our completed area, how much of incremental interest cost can we expect to flow in? Just a ballpark number would be helpful.

Jatin Kalra: Hi. Hi, Ramesh. Hi, Preeti. Congrats on the quarter. Most of my questions have been answered. I just have one for Preeti. Preeti, from the 4.7 million square feet deliveries that we have around end to FY 2027 and end of FY 2027, that would probably give you around INR 5 to 6 billion of additional NOI. I just wanted to understand against that, when those assets get under our completed area, how much of incremental interest cost can we expect to flow in? Just a ballpark number would be helpful.

Speaker #7: Hi. Hi, Ramesh. Preeti, congrats on the quarter. Most of my questions have been answered. I just have one for Preeti. Preeti, from the 4.7 million square feet deliveries that we have around H2 FY27 and end of FY27, that would probably give you around INR 5 to 6 billion of additional NOI.

Speaker #7: I just wanted to understand, against that, when those assets get under our completed area, how much of incremental interest cost can we expect to flow in?

Speaker #7: Just a ballpark number would be helpful.

Speaker #6: So all of this is funded out of debt itself. And these completions will happen between, I would say, the middle of this year—so say around October—to March.

Preeti Chheda: All of this is funded out of debt itself, and these completions will happen between, I would say, mid of this year, say around October to March. You will have some part interest which will flow for H2, and part will move to next year, because all the interest will come only when we are capitalizing these assets. Part capitalization will happen, I would say, in Q3, and then part capitalization will move to next financial year. I would say approximately somewhere around you can take, I would say, about 50% of the overall construction. You take 50% of the construction cost capitalized in this H2, and then therefore interest for H2, and then balance you can push to the next year.

Speaker #6: So, you will have some interest—part interest—which will flow for the second half, and part will move to next year because all the interest will come only when we are capitalizing these assets.

Speaker #6: So part capitalization will happen, so I would say in third quarter. And then part capitalization will move to next financial year. So I would say approximately, somewhere around, you can take—I would say take about 50 percent of the overall construction, so you take 50 percent of the construction cost capitalized in this half year.

Speaker #6: And then, therefore, interest for half that year, and then the balance you can push to the next year.

Speaker #7: Understood. Got it. Very clear. All the best. Thank you so much.

Jatin Kalra: Understood. Got it. Very clear. All the best. Thank you so much.

Speaker #6: Yeah.

Preeti Chheda: Yeah.

Speaker #2: Thank you, Jatin. We will go back to our previous participant. We had Karan Khanna from Ambit Capital; he has a follow-up question here.

Operator: Thank you, Jatin. We will go back to our previous participant. We had Karan Khanna from Ambit Capital. He has got a follow-up question here. Karan, would you like to go ahead?

Speaker #2: Karan, would you like to go ahead?

Speaker #4: Yeah, thanks for the follow-up. Just one question, Preeti. If we look at other expenses this quarter, it seems to have seen a steep 30% plus jump year-over-year.

Karan Khanna: Yeah. Thanks for the follow-up. Just one question, Preeti. If you look at other expenses this quarter, it seems to have seen a steep 30%+ jump YoY. If you look at the write-offs, almost INR 15 crore assets were written off during the quarter. What does that pertain to, and are you expecting higher write-offs going forward as well?

Speaker #4: Can you help explain what's driven such a sharp increase in other expenses? And if you look at the write-offs, almost ₹15 crore assets were written off during the quarter.

Speaker #4: So, what does that pertain to, and are you expecting higher write-offs going forward as well?

Preeti Chheda: Which particular expense are you talking of, Karan? Just help us there. Which line are you looking?

Speaker #6: Which particular expense are you talking of? Can you just help us with—just which line are you looking at?

Speaker #4: I'm looking at write-offs, which was ₹15 crore.

Karan Khanna: I'm looking at write-offs, which was INR 15 crores.

Speaker #6: So some of these write-offs are generally in relation to some assets. So what happens is, whenever we are doing upgrades to our parks, we decapitalize the existing assets.

Preeti Chheda: Some of these write-offs are generally in relation to some assets. What happens is, whenever we are doing upgrades to our parks, we decapitalize the existing assets, and as and when the upgrades are complete, the new capitalization happens. This is pretty much, I would say, routine. Whenever you are doing upgrades, the decapitalizations happen. I think that's part and parcel. Now, of course, that number you can't predict because it depends on what we upgrade and when we upgrade. Otherwise, most of it is that. Then, of course, not this time, but in future, if we are doing any redevelopment, then to the extent of written down value of that asset which we are bringing down, that gets charged off to P&L. You've seen that in the past.

Speaker #6: And as and when the upgrades are complete, the new capitalization happens. So, this is pretty much, I would say, routine. So whenever you are doing upgrades, the decapitalizations happen.

Speaker #6: So I think that's part and parcel. Now, of course, that number you can't predict, because it depends on what we upgrade and when we upgrade.

Speaker #6: But otherwise, most of it is that. And then, of course, not this time, but in the future, if you're doing any redevelopment, then to the extent of the written down value of that asset which we are bringing down, that gets charged off to P&L.

Speaker #6: So you've seen that in the past. So, in future, I would say—since you're asking me what else can come in the future—whenever we are doing any redevelopment, then the residual value which is in books for that asset, that will be written off.

Preeti Chheda: In future, I would say, since you're asking me what else can come in future, whenever we are doing any redevelopment, then the residual value which is in books for that asset, that will be written off.

Speaker #4: Sure. And then lastly, Ramesh, both Yerwada and Airoli East have seen strong growth this quarter in terms of occupancies. But if you look at The Square in Pune, occupancies are still hovering around the 62 percent mark.

Karan Khanna: Sure. Lastly, Ramesh, both Yerwada and Airoli East have seen a strong growth this quarter in terms of occupancies. If you look at The Square in Pune, occupancies are still hovering around the 62% mark. What's the outlook here in terms of exit occupancies for CY27?

Speaker #4: So, what's the outlook here in terms of exit occupancies for CSI 27?

Speaker #1: Square in Pune? I thought it's 100 percent. Which one? Are you talking about Square in Hyderabad or Square in Pune?

Govardhan Gedela: Square in Pune, I thought it is 100%. Which one? You are talking of Square in Hyderabad or Square in Pune?

Speaker #4: Just allow me. I think this is Square, I think it was Pune. Let me just check this. Give me a minute.

Karan Khanna: Just anomaly. I think this is Square. I think it was Pune. Let me just check this. Give me a minute.

Speaker #1: Square in Pune is 100%.

Govardhan Gedela: Square in Pune is 100%.

Speaker #4: Okay. And Hyderabad is?

Karan Khanna: Okay. Hyderabad is?

Speaker #1: Hyderabad is where we just did this hotel deal of 260,000 square feet. And the balance—we have around 100-odd thousand square feet vacant.

Govardhan Gedela: Hyderabad is where we just did this hotel deal of 260,000 square feet, and the balance, we have around 100 odd thousand square feet vacant.

Speaker #4: Great. That's helpful.

Karan Khanna: Great. That's helpful.

Speaker #1: Yeah. Thanks, Karan.

Govardhan Gedela: Yeah. Thanks, Karan.

Speaker #2: Thank you, Karan. We'll take our next question now from Chandravan Chauhan. Chandravan, would you like to go ahead and unmute your microphone, please?

Operator: Thank you, Karan. We will take our next question now from Chandra Bhan Chauhan. Chandra Bhan, would you like to go ahead and unmute your microphone, please?

Speaker #5: Hi. Yes, can you hear me?

Chandra Bhan Chauhan: Hi. Yes. Can you hear me?

[Analyst]: Hi. Yes. Can you hear me?

Speaker #2: Yes. Please go ahead.

Operator: Yes. Please go ahead.

Speaker #5: Thank you so much. I have a question: What is going to be the impact, in terms of percentage, on the distribution because of the new regulation that has come up related to taxation and dividend?

Chandra Bhan Chauhan: Thank you so much. I have a question that, what is going to be the impact in terms of percentage on the distribution because of new regulation that has come up related to taxation and dividend. Second thing is that, this will be having any impact on NAV as well because higher VAC calculation, higher VAC is going to be there because of lower taxation due to moving off SPVs into a new tax regime. These two questions.

[Analyst]: Thank you so much. I have a question that, what is going to be the impact in terms of percentage on the distribution because of new regulation that has come up related to taxation and dividend. Second thing is that, this will be having any impact on NAV as well because higher VAC calculation, higher VAC is going to be there because of lower taxation due to moving off SPVs into a new tax regime. These two questions.

Speaker #5: And the second thing is, will this have any impact on NAV as well? Because with higher VAT calculation, higher VAT is going to be there because of lower taxation.

Speaker #5: Due to moving off SPVs into the new tax regime, I have these two questions.

Speaker #6: So, I think we still need to assess how much the impact will be on NDCF. We'll come back to you all separately on that.

Preeti Chheda: I think we need to still assess how much will be the impact on NDCF. We'll come back to you all separately on that. All I would say, it is definitely positive because, as I said, most of our SPVs were in the higher tax bracket of 35. From 35 to 28.6, that's going to be a considerable saving. We'll come back to you with that exact number. On the second bit,

Speaker #6: But all I would say, it is definitely positive because, as I said, most of our SPVs were in the higher tax bracket of 35%.

Speaker #6: So from 35 to 28.6, that's going to be a considerable saving. We'll come back to you with that exact number. But on the second bit, so it comes to matte—

Govardhan Gedela: When it comes to MAT credits, if MAT credits are utilizable, generally they're calculated as assets and it helps the valuation. We don't have too many MAT credits, so the impact is not very material.

Speaker #1: Credits—if MAT credits are utilizable, generally they're calculated as assets, and it helps the valuation. But we don't have too many MAT credits, so the impact is not very material.

Speaker #5: Okay.

Chandra Bhan Chauhan: Okay.

[Analyst]: Okay.

Speaker #1: For the NAV computation, the format that SIBI has set, any MAT credits are treated as different tax assets in the computation. So that helps.

Govardhan Gedela: There may be computation. The format that SEBI has said, any MAT credits are treated as deferred tax assets in the computation, so that helps. Like Preeti mentioned earlier, the number is not significant.

Speaker #1: But like Preeti mentioned earlier, that number is not significant.

Speaker #6: Yeah, so just to answer your question, we don't see much of an impact on NAV because of this. But of course, NDCF will have a positive impact.

Preeti Chheda: Yeah. Just to answer your question, we don't see much of impact on NAV because of this, but, of course, NDCF will have a positive impact.

Speaker #5: Got it. Thanks.

Chandra Bhan Chauhan: Got it. Thanks.

[Analyst]: Got it. Thanks.

Operator: Thank you, Chandravan. We see a follow-up question coming in here from Yashas. Yashas, would you like to go ahead? Yashas, please unmute your microphone.

Speaker #2: Thank you, Chandravan. We see a follow-up question coming in here from Riyashas. Riyashas, would you like to go ahead? Riyashas, please unmute your microphone.

Speaker #1: Yes, thanks. So, I noticed that delivery timelines for Mindspace Madhapur—the 1A, 1B development and B18 buildings—seem to have been pushed forward. Please tell us what caused the delay, and are any other projects likely to be affected?

Yashas Gilganchi: Yes. Thanks. I noticed that delivery timelines for Mindspace Madhapur, the 1A, 1B development and B18 buildings seem to have been pushed forward. Please tell us what caused the delay and are any other projects likely to be affected?

Speaker #5: Riyashas, this could basically be one quarter here and there, which is typical of getting OCs and part OCs and all that. So, it's nothing much from what many of these projects are, actually, from what we thought we would finish.

Govardhan Gedela: Yashas, this could be basically

Ramesh Nair: One quarter here and there, which is typical of getting OCs and part OC and all that. It's nothing much from what many of these projects actually from what we thought we will finish. Our construction engineering teams have done a superb job in finishing the buildings earlier. One of the reasons we decided to, B18 and Hyderabad decided to do pre-cast again, is it'll help us save six to seven months. One month here and there, I won't be very bothered in a project of this size.

Speaker #5: Construction engineering teams have done a superb job and finished the building earlier. And one of the reasons we decided to—B18 and Hyderabad decided to do precast, again, is it'll help us save six to seven months.

Speaker #5: So, one month here and there, I wouldn't be very confident in a project of this size.

Speaker #1: Got it. That's clear. Thank you.

Yashas Gilganchi: Got it. That's clear. Thank you.

Speaker #5: Yeah.

Ramesh Nair: Yeah.

Speaker #2: Thank you, Riyashas. There is another follow-up coming in from Karan Khanna of Ambit Capital. Karan, please go ahead. Karan, do you have any follow-up questions at this time?

Operator: Thank you, Yashas. There is another follow-up coming in from Karan Khanna of Ambit Capital. Karan, please go ahead. Karan, do you have any follow-up question now? I think there is no follow-up question from Karan. Ladies and gentlemen, we don't have any more questions. As there are no further questions here, on behalf of Mindspace Business Parks REIT, that concludes today's conference call. Thank you all for joining us, and you can now click on the leave icon to exit the meeting. Thank you all for your participation. Thank you, everyone.

Speaker #2: I think there is no follow-up question from Karan. So, ladies and gentlemen, we don't have any more questions. As there are no further questions, on behalf of Mindspace Business Parks REIT, that concludes today's conference call.

Speaker #2: Thank you all for joining us. You can now click on the leave icon to exit the meeting. Thank you for your participation.

Speaker #6: Thank you.

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Q1 2027 Mindspace Business Parks REIT Earnings Call

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