Good afternoon, ladies and gentlemen, and welcome to the Mindspace Business Parks REIT's first quarter financial year 2022 earnings conference call. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kedar Kulkarni. Thank you, and over to you, sir. Thank you, and good afternoon, everyone. Welcome to the first quarter financial year 2022 earnings call for Mindspace Business Parks REIT. At this point, we would like to highlight that the management may make certain statements on this call that may constitute forward-looking statements. Please be advised that our actual results may differ materially from these statements. Mindspace REIT does not guarantee these statements or results and is not obliged to update them at any time. We are pleased to announce that the trading lot for Mindspace REIT units has been reduced to one from 200 earlier, effective August 11, 2021. This much-anticipated move by SEBI is expected to enhance depth and liquidity for the instrument and encourage wider participation. I would now like to welcome Vinod Rohira, CEO, and Preeti Chheda, our CFO. Vinod will share the business update and his view on macro environment and commercial real estate. Preeti Chheda will further share an update on the financial performance. We will then open the call to Q&A. I now hand over the call to Vinod Rohira. Over to you, Vinod Rohira. Thank you, Kedar. Good afternoon, everyone, and thank you for joining Mindspace REIT's earnings call. When we conducted our last earnings call, the nation was grappling with a huge second wave, which delayed the return to normalcy. During most part of the first quarter, various movement-related restrictions were in place in most geographies. However, our parks offered uninterrupted support to our tenants, ensuring their business continuity. Since then, the vaccination program has seen an uptake with over 500 million doses administered so far across the country and decline in overall active cases from peaks seen during the second wave. Various state governments have announced gradual relaxation of lockdowns and other restrictions as a step towards return to normalcy. We have seen a resurgence of economic activity, a continued rise in employment numbers, and robust financial performance within our clients' results. A continued push towards vaccinations at a fast pace is key to tackling the possible third wave. Once we have seen the workforce vaccinated, we will begin to see momentum shift towards return to workplace. We continue to remain optimistic on the long-term business outlook of Grade A office spaces. Global multinationals are increasingly looking at India as a center for innovation, knowledge, and technology. As per the NASSCOM report, the revenue for IT and BPM services is anticipated to grow from $190 billion in 2020 to $300 billion-$350 billion by 2025. Top 10 IT firms have exponentially increased their headcount even during the pandemic, and the hiring trends are expected to remain strong in the coming years. The pandemic has also fueled the GCC growth trajectory in India, with direct employment expected to increase significantly from 1.3 million at present to 2.2 million-3 million by 2025. We anticipate these strong underlying trends to translate into a demand upswing towards the best-managed asset ecosystem. We are also confident to achieve significant mark-to-market opportunities for the vacant spaces at our parks. Globally, employers are seeking to bring their employees back to office as they are putting the return-to-work plans in motion. We anticipate Indian firms to follow suit as the situation on the ground continues to improve. This is well supported by rapid employee vaccine offices are reemerging as the most preferred places to work, providing an inclusive environment for employees to ideate, collaborate, optimize, and grow. We have already facilitated circa 60,000 and more vaccinations across our parks in all geographies for our occupiers, employees, and their families. We achieved a gross leasing of 1,200,000 sq ft within the portfolio in this quarter. Additionally, we are pleased to announce that our under-construction ROFO asset at Commerzone Madhapur at Hyderabad has seen a pre-leasing of 1,800,000 sq ft. Our collections continue to remain strong at over 99% throughout the pandemic. Our net operating income for the quarter stood at INR 3,596 million, marginally up on a sequential basis. Our distributions stood at INR 2,728 million or INR 4.6 per unit. In our endeavor to maximize stakeholder value throughout the life cycle of assets, as announced during the previous call, we have firmed our plans to proceed with redevelopment for 2 wings at Mindspace Madhapur, subject to requisite approvals. This shall potentially increase the leasable area of the building under redevelopment from 360,000 sq ft to circa 1,300,000 sq ft, subject to final designs and approval. On the other hand, we remain focused on reenergizing our parks and maintaining high standards of health and safety to keep them ready for our tenants as they return to office. On the demand side, we continue to see increased activity for evaluation and assessment of new consolidation needs of large technology occupiers. This is a welcome indicator towards pickup in demand activity once substantial workforce returns to office. We've continued to see sizable contractions in new Grade A supply in most micro markets. With available ready-to-office Grade A spaces, we expect us to realize a healthy mark-to-market opportunity as we fill up our vacancies. Rentals in our micro markets continue to remain stable, and we do not see any pressure on the same. We continue to witness strong pickup in demand from flexi office space providers as we move towards offering enterprise solutions. Tenants continue to consolidate their presence in most of the micro markets that we are present in. We are focused on ensuring higher renewals from existing footprints of occupancy, leasing our vacant spaces, and bringing back employees to the workspace as the situation improves. Reduced interest rates and low gearing of our portfolio provides us with room to pursue asset enhancement and other growth opportunities at our parks, which are long-term value accretive to our unit holders. I would like to take you through the specific operational updates for the first quarter. We achieved the gross leasing of 1,200,000 sq ft for the quarter ending June 30, 2021. Of this, 1,100,000 sq ft was on account of re-leasing, and 100,000 sq ft was new area leasing. Average rent realized on this 1,200,000 sq ft of leasing was INR 60 per square foot per month, and achieved re-leasing spreads of 56.3% on 1,100,000 sq ft area re-leased. 91% of the leasing during the quarter was to existing tenants, while balance was to new tenants. We signed up three new tenants during the quarter. Our ROFO asset at Hyderabad is set to be completed in phases during FY 2022. We are pleased to announce that 1,800,000 sq ft area of the asset is pre-leased to a telecom giant. We received occupancy certificate for the hotel building at Madhapur. The building is already leased out completely with rents commencing in quarter three, financial year 2022. We have also received partial occupancy certificate for our building at Airoli West. These are area additions and proposed redevelopment Hyderabad Park have resulted in our portfolio size increasing from 30,200,000 sq ft as of March 31, 2021 to 31,200,000 sq ft as of June 30th, 2021. Of the total usable area, our portfolio has 23,800,000 sq ft of completed area, which constituted 91.7% of our portfolio value. 1,800,000 sq ft is currently under construction, and we have another 5,600,000 sq ft available in the portfolio for future development. The portfolio is leased to more than 165 marquee clients, with an average in-place rent of INR 57.1 per square foot, and a weighted average lease expiry of 6.6 years. Our collections continue to remain robust at more than 99% of the gross contracted rentals during the quarter. Our committed occupancy of the portfolio stands at 84.4%. On same-store basis, our committed occupancy stood at 84.4%, as compared to 86.8% at the end of March 2021. Decrease in same-store committed occupancy is primarily on account of addition of 800,000 sq ft area in Chennai, for which we had received occupancy certificate during quarter one, FY 2021. During our previous conference call, we had guided towards re-leasing visibility of 800,000 sq ft out of the scheduled expiry June in the first half. We remain on track to achieve the number as we've already re-leased 440,000 sq ft during the quarter. We remain on track with the development of our two under-construction projects, one building at Gera Commerzone Kharadi, Pune, and one building at Mindspace Airoli West, Mumbai region, to be completed in a phased manner. We continue to invest in further energizing our parks, providing our tenants with a renewed experience when they return to the workspace. Our building at project Gera Commerzone Kharadi received a platinum certification from IGBC, while our building at Mindspace Madhapur received LEED gold certification from USGBC. At Mindspace REIT, our endeavor to emerge as a responsible organization motivates us to implement sustainable business practices across our operations. In furthering our sustainability agenda, we became India's first real estate entity to join Climate Group's RE100 initiative. As a part of this initiative, we have committed to transform to 100% renewable energy usage across areas serviced and maintained by us by 2050. On a normalized basis, our parks have an annual electricity usage of over 100 GWh, which represents a sizable opportunity to transform to green energy. Previously, we have also pledged our commitment to the EV100 initiative of The Climate Group to transition to 100% electric mobility within our parks by 2030. We extended our support to construct an additional floor at a government hospital in Hyderabad. The project was completed within a short span of 45 days, and is expected to enable capacity enhancement of 120 beds. In addition, we also continue to assist frontline warriors and marginalized COVID patients. We continue to work with various stakeholders in this hour of need. At this point, I will now hand over to Preeti to walk you through our financial highlights of the quarter and full- year. With this, I thank you all for the patient hearing, and I hand over. Preeti? Thank you, Vinod. Good afternoon, everyone. We are happy to announce the financial results of Mindspace REIT for the first quarter of the financial year 2022. Despite the challenging market conditions, we maintain our net operating income for Q1 FY 2022 at INR 3.6 billion. Our revenue from operations for Q1 FY 2022 stood at INR 4.2 billion. Cost optimization measures helped achieve NOI of INR 3.6 billion for Q1 FY 2022, which is marginally higher than Q4 FY 2021. We continue to maintain NOI margin at 80%+. We announced a distribution of approximately INR 2.7 billion, that is INR 4.6 per unit, for the quarter- ended June 30th, 2021. The distribution comprises approximately 92%, which is INR 4.23 per unit of dividend, and approximately 8%, which is INR 0.37 per unit of interest. This translates to an annualized distribution yield of 6.7% on the issue price. On the debt side, our net debt as at 30th June 2021 stood at INR 37 billion. Leverage on the portfolio continued to remain low at 14.9%. Besides, we also have undrawn committed facilities of INR 4.5 billion. Over the last few quarters, we have achieved substantial reduction in our funding cost from an average cost of debt of 9.2% as of 31st March 2020 to 7% as of June 30th 2021. Over the last one year, we have converted approximately 28% of our current outstanding debt to fixed-cost debt. We continue to pursue opportunities to further convert part of our variable cost debt to fixed-cost debt to reduce our overall cost of debt. As stated previously, our strategy would be to deploy a combination of short to medium term and long-term debt with different maturities, as also a combination of fixed and variable debt. That's all on the financial performance. With this, I thank you all for your patient hearing, and I now hand over to Vinod to conclude this briefing. Over to you, Vinod. Thank you, Preeti. Although major part of the last quarter witnessed COVID-related restrictions, we are encouraged to see the return to normalcy as various state governments have started relaxing the restrictions. The economic outlook continues to look strong. Our business has demonstrated high degree of resilience, and we are more confident to benefit from the upcoming demand revival. We shall also continue to partner with the government and other institutions to offer necessary support to augment health infrastructure while tackling the pandemic. With this, I request the operator to open the floor for question- and- answer session. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead. Yeah. Good evening, everyone. My first question is on Slide 15 pertaining to the lease expiry profile. Just a few clarifications. We have said we have leased 400,000 sq ft re-leased in the current quarter in Q1, and it says that we have re-leased area vacated in FY 2021 of 500,000 sq ft. Just want to clarify the area which has been re-leased, is that reflected in the asset-wise occupancy tables which we shared later in the presentation? I mean, I'm seeing a difference between the same store occupancy and the committed occupancy. Yes, it is. 80% is net of this re-leasing of area vacated in FY 2021, that number for the portfolio? Sorry, can you repeat that question clearly? I'm just saying you said we have backfilled out of the area vacated in FY 2021. We have re-leased 500,000 sq ft, right? Yes, that's right. In the quarter. There is another slide behind which shows the portfolio level occupancy. There is a current occupancy and a committed occupancy. There are two occupancy figures. One current occupancy, 80%, and committed occupancy, 84%. Right. This 500,000 sq ft which we have done, so that corresponds to this 80% or to 84%? 84.4%. Okay. That is yet to be reflected. The leasing which we have done is yet to be reflected in the coming quarters, right? That area should go up. No. It is already reflected here as committed occupancy. It just translates into a formal lease deed, then it moves into the occupancy bucket. Okay. Sir, just following up on that. Would that mean that we are almost now nearing the bottom of this occupancies Let me rephrase. Do we see the occupancy bottoming out now and we should see it going upwards? We are definitely seeing businesses doing very, very well, especially in the universe of our tenants because of the technology push that's needed. We are seeing them push up the employment numbers. We are feeling very confident that coming back to the workspace is going to be sooner than later. We just have to be cautious about making sure that globally we are fine over the next few quarters from a third wave perspective, and we are good to go. Okay. Just one more question now. Our Q1 distribution has been fairly resilient. Would you like to share some lower or upper end of distribution guidance for the year or would you like to hold back? Vinod, if I may take this. Sure. Adhidev, hi. Adhidev, as you have seen this time, despite all the challenging conditions that we have gone through, we have given a pretty attractive distribution. Our 6.5%, 90% of that is tax-based. On a post-tax basis, it still stands a healthy distribution. In terms of guidance, we would like to see how things unfold. Having said that, as I told in my last conversation as well, while we have had some of the leases which have taken longer to lease and the rents have taken longer to start, we have achieved a very significant reduction in our interest cost, which has helped us offset a very large portion of our rental, which has not come in. I would maintain at that and we will see as we go along. Having said that, for the quarter, I would say we have delivered a pretty attractive distribution. Yeah. Sorry to just continue on. Adjusting for all these working capital and CapEx adjustment, other adjustments, should we at least expect the current quarter's run rate to be maintained for the rest of the year, if not higher? Adhidev, again, I would not want to comment on any specific number, but we would, I would say, continue to work towards delivering our performance every quarter. Okay. That we guide. Fine. Okay. At that time, complete. Yeah. Thank you. All the best. I'll come back in the queue if I have more questions. Thank you. Thank you. The next question is from the line of Murtuza Arsiwalla from Kotak Securities. Please go ahead. Yeah. Hi, sir. Sir, if you can speak closer to the handset, please. Is this clearer? Yes. Okay. Just wanted some number. We looked at it. Murtuza, we are not able to hear you, sorry. Your voice is cracking. Is it too loud? Sir, if you can move to a better reception area, please. Your voice is breaking up a lot. Is this any better? No, it's still breaking up. Okay. Just let me know sometime after the question so they accept me. Sure, sir. The next question is from the line of Mohit Agrawal from IIFL. Please go ahead. Yeah. Thanks for the opportunity. My first question is on the distribution and the distribution walk down. Could you help us understand, not only this quarter, but last two, three quarters, we're seeing that the debt drawdown number is higher than that of the CapEx that you would have incurred. The understanding was that probably this would be closer to the CapEx is funded by debt and remaining distributions flow down as is, and then they are distributed. Could you explain why? Because from last three quarters, I see the CapEx is about INR 375 crores, but the debt drawdown is INR 640 crores. Could you explain that better? Yeah, sure. Let me take that. Two things here. First and foremost, one, as you rightly said, CapEx is fully funded out of debt. There have been working capital changes also. In working capital, of course, we have had some fit-out costs, which we consider as CapEx, but from an accounting perspective, it gets classified as working capital. To that extent, that is also funded by debt. What has happened is there have been certain cash flows. Of course, given the nature of these working capital changes, there is always a timing issue. That especially if I have to address this quarter, we've had about INR 35 crore of tax refunds, which were actually expected in this quarter, which we received in the previous quarter itself. Similarly, this being the first quarter of the financial year, we've had several expenses which were prepaid for the entire year, and therefore you've seen the working capital being on a higher side, in this quarter. There are these timing issues which will happen. Of course, part of the debt, as we had guided in the IPO document also, has been out of debt, but that's a part of it, which was as it is part of our IPO disclosures as well. Otherwise, the other movements are broadly because of working capital changes as I alluded to. Okay. Over time, do you think these numbers would converge over the next few quarters as the one-offs exit out? Yeah. Some of these one-offs which have happened, like I told you, some prepaid expenses which have happened in this quarter, some of the timing issues in terms of the cash flow coming earlier or later, those all I would see normalizing. Okay. Sure. My second question is, you mentioned about a ROFO asset, it has now been fully pre-leased 1,800,000 sq ft. The building is now complete and it's pre-leased. Is it time that will be inducted into the REIT? Hi, Mohit. Yeah. The asset is really still under construction. Yeah, but. To pre-lease while it is under construction. It gets ready by second quarter next year and the rents are in phases. At the right opportune time where we can create an accretive acquisition and a yield accretive sequence, we will do that. Just to understand this better, what would be a good time, like typically when the comes in and probably the rent-free period ends, is that the time that you would like to add the asset into the REIT? That's right. Okay. Just last one, just one clarification. You've taken this asset for redevelopment, what would be the time taken typically to bring this asset back into and any more plans to redevelop assets in Hyderabad? This is the first for us. We are quite excited. Subject to all the approvals coming through, we would like to see this asset delivered very quickly. It'll take between 27 and 30 months to bring it in. We want to see more of these going forward in the future once we've demonstrated this successfully. Okay. Sure. Thanks a lot and all the best. Thank you. The next question is from the line of Shashank Savla from Somerset Capital Management. Please go ahead. Hi. Thanks for the call. My first question was on the re-leasing spread of 56%, which seems quite high. I just wanted to clarify whether that's just on the ones which you had leased earlier and doesn't include any vacant space, or does that calculation include the vacant space as well? No, it includes both. It's a combination of assets, some that were lying vacant and some that got re-leased to mark to market. That is what the opportunity we've been always talking about. Our average rents for those assets, for example, some of them were as low as INR 41, and we were able to get INR 65 when we re-leased in these markets. Okay. That's where the mark-to-market opportunity really excites. Sorry for clarifying, but does that mean that it also includes assets where you are not receiving any rent? The denominator in that case is zero. No, no. There were certain buildings which had expired, and the tenant had just about vacated them. We were fortunate to get another tenant to fill up that building in this last quarter, and when those rents start, by default, we are getting this mark to market opportunity. Okay. I just wanted to clarify that when you say vacant, it doesn't sort of take 0 into the calculation in the denominator for rents achieved previously. That's right. No, it doesn't. Okay. Overall, can you also elaborate on, in terms of the base rents and also incentives which you have to provide, have there been any significant changes, or are you still seeing positive base rent increases? There are no real major tectonic shifts taking place. People have just asked for slightly longer periods for fitting out because of uncertainty. Otherwise, it's all normal leases. Right. The mark to market potential, which has been trending lower, is there a reason why it's sort of trending lower now? No, because when we go on realizing mark to market, the residual mark to market opportunity looks that it's going lower. Cumulatively from 54.9, we moved to 55- 57. We've gone on realizing our mark to market, which is why the residual mark to market starts looking lower. Right. Okay. There were a couple of things like for Malad, your in-place rent, that's the only property where actually the in-place rents have fallen. Is there any particular reason for that? Those rents there haven't really fallen. Actually, there were some which were with the fitted-out facilities, their tenures were over. The newer tenants which have come in are paying us the market rents that we have got, and that's the market rent we're getting. Right. There are four properties where your committed occupancy is relatively lower. Airoli West, The Square, BKC, Pocharam, and Porur. What are the sort of plans to improve the occupancy over there? Airoli West, the significant vacancy was SEZs, and we are actually quite excited about the opportunity that now SEZs may open up to allow for the non-SEZ occupiers. That means generally the STPI and all technology companies to be able to participate in occupying spaces which were reserved for SEZs. Once that comes through, we will see traction of leasing take place there as well. The Porur asset is a new asset that just got completed, which is why it's taking slightly longer to lease because we entered that asset completed right in the middle of the pandemic, and we've seen numbers now start to begin to rise in terms of interest. These will catch up, and they will move up. Right. Finally, you mentioned that as vaccination improve and you'll see an improvement in demand but consequently, won't you also see an increase in supply because some of the construction which was impacted by COVID will also get completed? How do you see the demand trend situation, at least for the next 12 months? As we demonstrated to you in Hyderabad, which would have been probably likely the market where everyone would feel has the highest overhang of vacancies in incomplete assets, et cetera. There is a big difference between a Grade A asset operator and an asset manager than just a building in a vicinity. That's what's getting demonstrated time and time again, that the client is preferring stability of asset management and quality of the owner, as well as the asset management and facility. Those Grade A assets are getting picked up first for demand, and you will always see a disproportionate rush towards Grade A. You will always see the vacancy shrink in Grade A really quickly while the overhang of supply continues to be there in the marketplace. Having said that, the restart of construction, we are still not seeing in most micro markets of incomplete or half-completed projects. There is very limited action there. We have a strong sense to believe that that supply is not coming in a hurry. Right. Okay. Thanks a lot. Thank you. Before we take the next question, a reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The next question is from the line of Satinder Singh Bedi from Eon Infotech Limited. Please go ahead. Hi, good afternoon, and congratulations on the steps you've taken to ensure that the distribution doesn't drop much despite the challenging time, especially on the cost of funding that you've given out. My questions were, first, regarding Airoli West. What we see is that there is a 10% fall Q- on Q- on the revenues. While the committed occupancy has stayed stable at 68.6 between the last quarter and this one. Any reason to explain this 10% fall in the NOI? Sorry, we are not able to hear you clearly. Okay. Can you help us, repeat the question because the voice is. My question is regarding Airoli West. Q- on- Q, Airoli West has seen a 10% fall in revenue from operations. While the committed occupancy has stayed constant at 68.6% in these two quarterly periods. Any reason for this 10% fall in the revenue? Yeah. Vinod. Yeah. Go ahead. Yeah. What happens is, when we say committed occupancy, that also includes the lease agreements which we have signed, but not the proper lease deeds. The rent of those leases will happen in the months to come. That's the reason you are seeing betterment in terms of a committed occupancy. The rent will start in the months to come. That's why you've not seen the increase in the revenue. Yeah. What I see is that the occupancy has fallen from 66.4% to 63.8%, but the committed space is same. Normally, occupancy falling would show that some client has moved out. Okay. That's the only way occupancy can fall because the increase in space is relatively small, you varied 100,000 probably. The committed occupancy is same. Either a client has gone out and maybe another one has committed or something like that, you know. The revenue has fallen 10%, giving 63.4% over this quarter. Yeah. In terms of the revenue fall, because there would also be certain exits, which we would have announced in the previous quarter itself. The revenues have not come in this quarter. Therefore, you would actually see that revenue tapering for this quarter. Okay, fine. Thank you. Another question on the data centers. Last quarter, you had mentioned about data centers. This time, the slides do not talk of it. We hope the progress is on track on the data center project. Okay. Yeah, we continue to see interest, especially in the Navi Mumbai region for data centers. We continue to be engaged with tenants. That's all that I can tell you right now. The project that you announced last time, that is on track? Yes, that's right. Okay, fine. One last question on the JP Morgan seems to have dropped out from the top 10. Okay. They were about 3.8%, and now they're out of the top 10, which means below 2.5%. Okay. Can you just share what is this movement look like? JP Morgan, right before the pandemic actually had taken two build-to-suit facilities for themselves to consolidate, because they were fragmented in each of their markets. That space that they actually were to vacate a year and a half ago, that project of theirs got delayed. They continued to occupy. They are now vacating, and we already have found a tenant to take that space, which we will talk about in the next quarter. Okay. Thank you. This was Airoli West? This was Hyderabad. Okay, Hyderabad. Okay. Thank you. Yeah. Thank you very much. I'll come back in the queue. Thank you. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thank you so much, and good evening, everyone. The question is on the early exit. Is this 200,000 sq ft that you show on Slide number 15, is this a new one? I think that in the previous quarter, we had 500,000 sq ft. If you can talk about this, are we at the end of it? Who are these tenants who are moving out, are they stressed for COVID or some other reason? Hi, Sameer. How are you doing? I'm doing good. Thanks, Vinod. This is additional small tenant, about 100,000 sq ft in Hyderabad, and another miscellaneous 40,000 sq ft-50,000 sq ft worth of tenants across the portfolio, which we have visibility they will leave in the next six months. Do you see more of these coming, Vinod? As of now, let me tell you about 1,600,000 sq ft odd of ours is due for terminations and expiry. We have already visibility of 1,200,000 sq ft out of that. We are not seeing too much hiccups there going forward. When you say you got the visibility for 1,200,00 sq ft out of 1,600,000 sq ft? Yeah. you're saying of re-leasing renewals? That's right. Okay. Just at the end of the first quarter, yeah. Fair enough. What I was asking you was about the early exits. Are we end of that cycle, or do you think there could be more coming through? I would be reasonably confident we are at the end of that cycle, yeah. We still have to be careful going forward, but I don't see too many hiccups coming. Okay, excellent. Vinod, if I were to think through the vacant area or the task of leasing through next nine months. I take the current vacant areas, maybe 3,500,000 sq ft, I think I shared below that. The exits and the expiries which are not committed for, maybe that's another 1,000,000 sq ft. The new completion, that should be, I think, Airoli West, 1,000,000 sq ft. Roughly 5,500,000 sq ft is what we need to do. Is that fair? Second is, your gross leasing for Q1 was 1,200,000 sq ft. What is it that you can expect in Q2, Q3, just to arrive at therefore the net number? We continue to see similar traction for transactions of gross leasing going forward, at least for the next quarter, and hopefully going forward for the other quarters as well. We are seeing green shoots begin to happen in different micro markets. We are seeing the necessity of clients who want to continue with their footprints and are already speaking about renewals on their scheduled expiries. All of those things are happening. Large clients with large RFPs are still early days, but they've started to begin to talk. You will see that traction happen in the next few quarters, where they will then start talking of hard real estate decisions. Okay. That means that until that doesn't happen, which is large RFPs by new tenants, our vacancies are probably going to continue the way they are, if not go up even more. It's like this. The large vacancies will go with the large kind of clients, but we are seeing small demand between 50,000 sq ft, 100,000 sq ft, 200,000 sq ft coming. We are reasonably confident we'll be able to fill these up. Okay. you agree with that gross number of 5,500,000 sq ft that you probably would want to lease up by the end of this year? It's not 5,500,000 sq ft. The numbers are given to you broadly in that presentation. Happy to get those addressed for you separately as well. Having said that, if you see our same store increase when we added 300,000 odd sq ft, even that is pre-leased 84.4%. We are getting traction even on the under-construction buildings for pre-leasing, which is also a very good sign, including the ROFO asset you saw, which is under construction, a year away to complete. We've already pre-leased 1,800,000 sq ft. It's a combination of demand that's coming for future and present. We don't want to lose any demand in any of the markets. Okay. Fair enough. I get your point. I think someone asked you earlier also in the call, and I'm just trying to get an answer to that at 84% occupancy, are we really at the bottom of it, or do you think there could be another 100, 200 basis point? Even if it's a stable number, how long this bottom can continue? That's what I was trying to find. We feel the market is quite stable now. We are not seeing too many companies uncertain about their footprints for occupancy. Okay. That's it from my side. Thank you, sir. Thank you. The next question is from the line of Ashwini Agarwal from Ashmore Group. Please go ahead. Hi, I'm referring to Slide 22. This also goes back to a question that one of the previous participants had asked. In Airoli West, you've written that you've received the SEZ denotification. Is that what you were waiting for to bring in non-SEZ clients, or is there something else? Because your response seemed to suggest that you're waiting for some more permissions. You're right, the one building that was independently getting constructed could be denotified. We got that building denotified successfully finally, and we already saw traction there where we've leased 250,000 sq f t in that under-construction building, and we are seeing more traction for demand as we go along forward. We are reasonably confident that the STPI demand is picking up for that micro market. Which is why the residual SEZ, which is in a cluster together, if we get the opportunity to lease that in combination with the SEZ and non-SEZ occupiers, that may change the game for us. You'll have to apply for more denotifications for those buildings. Yes. That's right. That's the process. We are waiting for clarity from the government, and we are moving forward in that direction really quickly. How long does it take to get this denotification? Denotification, if it's independent building which you can isolate, between six and nine months. Okay. It's more tricky for clusters. Sorry? For clusters, it will be more tricky. For clusters, there's a new guideline that they're proposing which will allow for coexistence. That will make it even more easier. You don't necessarily need to carve out buildings. Okay. All right. There's a whole lot of visibility they want to create for long-term occupancy of the SEZ parks across India. They're cognitive of that fact, and they want to come back with a policy which helps everyone. Okay. How much space is vacant in those clusters which would benefit from this new proposal, assuming it were to come through? Within our portfolio? Yes. 1,500,000 odd sq ft. Okay. That's already part of the vacant area of 16% roughly. That's right. Okay. All right. Second question is that, if I read the note number one, there is INR 1,345 crores of ongoing projects expenditure. That's balanced CapEx. Could you break it down as to which projects are these? These are projects which are in Kharadi. We have one under-construction project in Kharadi. We have another project that Vinod already mentioned in Airoli West. These are the two projects which are currently under construction. Of course, just to take this forward, we have upgrade expenditure, which will happen. We are already upgrading two of our parks. We've done major work. There's still some work to happen for all of that. Today, essentially, in terms of under-construction is broadly the Airoli West project and the Kharadi project. Of course, there is Yeah, go ahead, Vinod. Sorry to interrupt, this doesn't include the Madhapur 1.1 redevelopment. It does. The entire INR 1,709 crores, the breakup of that is in note one, also includes the Madhapur redevelopment. Okay. All right, perfect. Thank you so much, and all the best. Yeah. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and 8. The next question is from the line of Manish Agrawal from JM Financial. Please go ahead. Yeah. Hi, good evening. My first question is on the breakup of lease expiry profile slide. We have 1,300,000 sq ft, which is getting expired in nine months FY 2022. Out of this, how much is expected to be re-leased? I just mentioned previously on the call, from an annual visibility of 1,600,000 sq ft that is coming for scheduled terminations and expiry, we have visibility for at least 1,100,000 sq ft -1,200,000 sq ft out of that. Okay. broadly 75% on 1,300,000 sq ft also is what we can think of? Out of 1,600,000 sq ft. The slide mentions 1,300,000 sq ft. This is nine months FY 2022. Yeah. I was telling you for the 12-month period cumulative. Okay. Sure. Secondly, on the CapEx plan for this year and the next year, how much will we spend individually? This year, for the balance nine months, we would be spending approximately INR 500 crores on the existing projects and some on the newer. We will have approximately, I would say next year, depending on when these projects get completed and when the approval for a redevelopment et cetera comes in. We would see a slightly higher number next year. Okay. Madhapur. this year. Madhapur redevelopment would take 27-30 months starting from June. No. The starting will be in the second half of this financial year, depending on when we get the approvals. We expect completion sometime in FY 2025, because depending on when the approvals actually come in. Okay. We have started work on the data center part? Vinod, you want to take that? We are waiting to start. We started the early groundworks, et cetera. How much will be the total spend on that data center? That will be somewhere, in terms of the construction cost, should be somewhere around INR 300 crores-INR 350 crores. That is included in this CapEx figures in the slide? The INR 1,700 crore figure? No. That's for [Bare shell]. It does include. You're talking about the INR 1,709 crores of- Yeah. Correct. Yeah. Thanks. That's all from my side. Yeah. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and 1 at this time. The next question is from the line of Anirudh Jain, an individual investor. Please go ahead. Hi. I have two questions. This one is for Preeti. First, I want to ask what determines the split between the dividend, the principal repayment, and the interest from a REIT structure perspective? The second question is from Slide number 19, in the NDCF build-up. There are two line items. One is for working capital changes and other adjustments, and one is CapEx, including capitalization interest. If you could please explain the difference between these two line items. Thank you. Sure. Let me take the first one. You talked about three components, which is return of capital, dividend, and interest. In our case, we don't have a return of capital as of now. All the distribution that we are making currently, 90% of that is dividend and 10% of that is interest. If I have to just generally talk about this point, then of course, the nature of distribution would depend on the capital structure of the SPVs as well as the REIT. It depends upon how much is the equity, how much is the debt, what is the profitability of every SPV. There are numerous factors which come to play in determining what will be the nature of distribution. Therefore, it can change over a period depending on what is the capital structure. In our case, since some of these SPVs in the portfolio are matured SPVs which are in existence for a very long period of time, and almost a lot of debt is already repaid. The profit of those SPVs are higher, and therefore we've been able to pull out more dividend. That's the reason, in our case, you would see that 90% distribution is by way of dividend and about 10% is by way of interest. That was on your first question. The second question was: what is CapEx and what is working capital? CapEx is nothing but the construction cost, which we are incurring on our projects. Working capital has a couple of components. One is, as I'd mentioned, the fit-outs. In some of the cases, the tenants require us to do the fit-outs for them. For our practical purpose, we treat that also as CapEx for us. From an accounting perspective, that gets classified as working capital, and that's the reason you see that finding place under the head working capital. As I'd mentioned earlier in the call, given that this is the first quarter of the financial year, there are certain expenses which we have prepaid for the entire year, and that's the reason you see the working capital on the higher side. Working capital essentially has fit-outs, has certain prepaid expenses, your normal creditor outgoings. Those are generally the kind of expenses which are sitting in working capital and CapEx is purely construction cost for the projects. I hope that answers it. Thanks. Just one last clarification. Is there any way to model, do you expect this 92.8% to be fairly stable going forward or is there any way to model this? Do you expect a change? As I said, this is what we have guided to for our projection period. Then as I said, as we go along, it depends on the capital structure of the SPVs and the REITs. At least, during the projection period, this is what we believe will be the composition. Thank you. Yeah. Thank you. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. Next question is from the line of Satinder Singh Bedi from EON Infotech Limited. Please go ahead. Yeah. Thanks again. This question is for Preeti, and again, it goes back to the NDCF build-up on Slide 19. Preeti, you had this net debt drawdown of INR 256 crores for the quarter. If we add the CapEx and the working capital, this becomes about INR 192 crores. That still leaves about INR 64 crores of debt drawdown, which has not been applied either for CapEx or working capital. Where has this INR 64 crores been applied, okay? Yeah. If you just look at the NDCF construct, just below the net debt line, you also have three other expenditure lines, which are the interest cost. We have in the Hyderabad entities, we have the Telangana government undertaking also, which is one of the shareholders of that SPV holding 11%. The dividend which goes to them is subject to dividend distribution tax in their hands, not for the REIT. Of course, you have certain expenses at the REIT level. The balance 60 is accounted that way. If you add the other three items, it gets to that number. Preeti, that 11% of Telangana State is anyway not our income. That's not REIT income anyway because we are owners to the extent of 89% in those three SPVs. Correct. My point is, can you please confirm that all of the debt drawdown has gone towards CapEx and none of the debt has been used for the distribution payment and the distribution payment is a flow-through from the actual earnings? Let me put it this way. What happens is, I've just explained earlier. Some of the working capital changes and cash flows have a base on timing as well. One example which I had given was, we were expecting INR 35 crore of tax refunds in this quarter, but we received it in the previous quarter itself. To that extent, what happens is when we receive the cash flows earlier, we pay down the debt. In this quarter, when we actually have to make distribution, we draw that debt back because there's no point keeping that money in a bank account. We pay down the debt temporarily and then draw the debt again. Therefore, these timing cash flow issues are bound to happen. Similarly as I said, today we have certain prepaid expenses which we are paying in advance for the rest of the year. We may not have those expenses coming the next quarters. It will not be right to say that the debt which you're seeing here is also a function of certain cash flows having come in earlier because of which the debt prepayment has happened earlier and new debt is drawn again this quarter. Also, of course, as I said earlier also, some of this was already factored even at the time of IPO. That's broadly how the NDCF has been working. Yeah. Okay. Sure. Thank you. That explains it. Okay. One small query regarding the slide, Page 118 of your quarterly deck. This is not this presentation. This is the Q1 148-page document. It talks of a 22% with landowner in a JDA. Okay. What is that 22% of, what project is that, can you explain? Okay, that's our Chennai project, which is the Commerzone Porur which is in Chennai. In that project, the sharing in the land owner in the space, it's not in the JV. Again, yeah. There's nothing. 100% of the ownership of the SPV is with the REIT. There is no other shareholder in the SPV. In the overall project, in terms of the area, 22% of that area is going to the landowner in lieu of the land which he's contributed for the project. Okay, fine. Thank you. I think that is clear. Thank you very much. Yeah. Thank you. As there are no further questions, ladies and gentlemen, on behalf of Mindspace Business Parks REIT, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.