Ladies and gentlemen, good day, and welcome to the Mindspace Business Parks REIT's earnings conference call for financial results for the quarter and year ended March 31, 2022. As a reminder, 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone telephone. Please note that this call 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 fourth quarter and full year financial year 2022 earnings call for Mindspace Business Parks REIT. At this point, we would like to alert 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 would like to reiterate that the acquisition of Asset SPVs by Mindspace REIT was effective on July 30, 2020. Consequently, consolidation of financials of these Asset SPVs into Mindspace REIT has been done effective August 1, 2020. Condensed consolidated full year 2021 numbers therefore reflect eight months financial performance of these Asset SPVs. However, for the purpose of comparison in the earnings presentation and for the purpose of this call, we have provided pro forma revenue from operations and net operating income for FY 2021. I would now like to welcome Vinod Rohira, our CEO, and Preeti Chheda, our CFO. Vinod will share the business update, growth opportunities, and his views on macro environment and the sector. Preeti 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. Thank you, Kedar. Good afternoon to all participants. Hope you and your families have been safe and are doing well. Thank you for joining Mindspace REIT's earnings call. While the year saw major disruptions caused by the pandemic, putting the fundamentals of our business to test, we have emerged stronger and more resilient from this crisis. Financial year 2022 ended as one of our best years, with 4.5 million sq ft leased in the REIT portfolio and an additional 2.9 million sq ft in our ROFO portfolio, taking the cumulative number to 7.4 million sq ft. Almost all our under construction buildings witnessed pre-commitments. Our net operating income for the year stood at INR 14.9 billion, a growth of 8.2% over the previous year. We have achieved a re-leasing spread of 31% during the year. Our on-campus developments led to an increase in total leasable area from 30.2 million sq ft to 31.8 million sq ft as on March 31st, 2022. The growth in the portfolio is primarily on account of increase in area of our new building at our Pune asset on account of additional FSI, redevelopment of old buildings in Hyderabad, and commencement of construction of new recreational and entertainment areas in Hyderabad and Mumbai parks. The market value of our portfolio now stands at INR 264 billion as on March 31st, 2022, up by circa 5.7% over March 31st, 2021. We have completed refinancing of over INR 9 billion via debenture raises from mutual funds and insurers as our overall cost of debt now stands reduced by circa 50 basis points during the year to circa 6.6%. Our distribution for the year stood at circa INR 10.9 billion or INR 18.4 per unit. A number of factors played out during the year which helped us clock strong numbers, robust business performance, primarily of the IT industry, sharp jump in employment, occupiers' intent to provide an experiential work environment to their employees, and the rising preference towards quality-graded assets managed professionally. Let us elaborate these factors in more detail. As emphasized, occupiers do not want to risk or compromise on asset quality as they restart their journey towards office occupancy. There is a strong desire to create and provide wellness and experiential work environments. We had anticipated this trend to play out. As highlighted during our earlier calls, we have been using this downtime to upgrade our assets, which would have been tougher to carry out at full occupancies. The upgrades have been executed, laying special emphasis on improving sustainability, building aesthetics, wellness, health and safety, providing recreation amenities, and thereby offering the right balance at the workplace. The positive impact of these actions has begun to show with top-notch occupiers gravitating towards such offerings. To quote one such example, we have recently inaugurated the 1-kilometer-long skywalk within our Mindspace Madhapur in Hyderabad, allowing seamless connectivity from the metro station to their office doorstep. The skywalk has not just helped to reduce the discomfort caused by vehicular traffic to pedestrian movement, but also led to significant reduction of carbon footprints generated by last mile transportation of vehicles, as well as reducing the noise and traffic within our park. The skywalk also houses a vantage cafe along with kiosks and breakout spaces, providing food, recreation, and entertainment offerings. As our occupiers and their employees begin to return to office, they're pleasantly surprised by the transformation and the stretch we travel to their office spaces. It is fast becoming a new landmark for the city of Hyderabad. Many such interventions will change the face of workspaces. The IT industry has reached another inflection point led by increased spend on digitization by companies globally. Unlike the previous inflection point of Y2K, which was led by cost arbitrage models, this time around it is led by intellectual value-added services like data analytics, cloud management, and artificial intelligence, among others. The record addition to headcount of IT companies in India is testament to the immense growth prospects. As per NASSCOM reports, the strength of IT companies is expected to cross over 5.1 million in financial year 2022, reaching a record high, with additions of circa 4.5 lakh employees during the year. Hiring of freshers by top technology companies is expected to be up 2.5 times over financial year 2021. India had 1,430+ GCCs at the end of financial year 2021. This count is expected to grow at a CAGR of 6%-7% to reach 2,000+ GCCs by financial year 2025. In the same period, the headcount of GCCs is expected to grow 2 times at a CAGR of circa 12%, reaching 2 million by financial year 25. These new hiring trends are estimated to translate into significant addition to new office space demand. Back to office plans of occupiers have started gaining momentum. Today's industry leaders clearly understand the importance of workspace in shaping the culture of organizations to promote collaboration, innovation, and growth. Employees have come to realize the importance of having a dedicated and distinguished work environment. If we refer to the recent earnings call of several top Indian IT companies, a definite return to workspace plan is in motion. We are witnessing this return to office play out on the ground as well. The physical occupancy in our parks has increased from 14% during March 2022 to circa 23% in May 2022. Based on our conversations with our occupiers, we expect it to cross 50% by the second half of this year. Over the past 2 years, many companies have expanded and hired a record number of people, and they intend to host their employees back in experiential work environments by replacing the densified spaces with more focus on recreation and wellness. As employees start returning to office, we anticipate occupiers to expand their footprint to cater to increased headcount, coupled with dedensification requirements. This will generate demand for more space. Large occupiers have begun their search for consolidation and expansion, leading to a spike in demand for under-construction assets. Our ROFO assets have also witnessed similar trends. We expect this strong uptick in demand for under-construction assets to continue. To cater to this demand, we have brought forward the construction timelines of our under-construction buildings across parks. At Mindspace Madhapur, we have now commenced the 1.3 million sq ft redevelopment project with an additional potential to create more attractive tenants to come to our park. Additionally, we have commenced work on creating an experience center for recreation and entertainment within that park. At our Mindspace Airoli East park, we are developing a similar high street experience for food, entertainment, and recreation. All these additions are part of our endeavor towards changing the workspace landscape by bringing fresh energy for the young millennials who form a major part of the nation's workforce. We continue to explore opportunities for growth organically and inorganically. At present, we are evaluating the ROFO opportunity to acquire the 1.8 million sq ft fully leased asset at Commerzone Madhapur, which was announced during quarter 3 FY 2022. I would now like to take you through the specific operational updates for the fourth quarter. We have leased circa 0.7 million sq ft during the fourth quarter, of which 0.2 million sq ft was re-leasing and 0.5 million sq ft was on account of new and vacant area leasing. The average rent achieved on the 0.7 million sq ft leasing was INR 60 per sq ft per month. Rents have remained steady in our micro markets, and we continue to see the same trajectory. The committed occupancy of the portfolio stood at 84.3%. Our net operating income for the quarter grew by 6.6% sequentially to INR 396 million. The weighted average cost of debt stands at circa 6.6%, which is among the lowest in the industry. The cost of debt has come down by circa 260 basis points since March 2020. Our distributions for the quarter stood at INR 2.7 billion, or INR 4.61 per unit. Our portfolio is now further diversified with over 175+ tenants, compared to 160+ tenants at the end of financial year 2021. Following up from the third quarter announcement on British Safety Council seventh Sword of Honour awards, we have won an additional two Sword of Honours, taking the total of nine Sword of Honours. These awards reward those organizations that have reached the pinnacle of health, safety, and environmental management. We are proud to announce that Mindspace REIT is Great Place to Work-certified. We look forward to another year of resilience and growth, setting up new benchmarks at our parks, and continue to be among the most preferred asset manager partners in the growing need for increased tech-enabled workspaces. The Union Budget had acknowledged the importance of SEZs have on the Indian economy. We expect the policies to be suitably reformed during this financial year, which would allow SEZ and non-SEZ spaces to coexist within the same park. The strong leasing demand we are seeing for our de-notified buildings gives us confidence to lease out the vacant SEZ spaces post their de-notification. With large occupiers firming up on their back-to-office plans, we expect smaller ones to follow suit. The strengthening of rents has offered an opportunity to greater mark-to-market leasing, allowing for an upside by leasing the current vacant spaces. With this backdrop, I hand over the call to Preeti to take you through the financial updates during the year. Thank you, Vinod. Good afternoon, everyone. I'm happy to present our financial performance for the quarter and year ended 31st March 2022. We closed the fourth quarter of the financial year 2022 with a revenue from operations of INR 4.7 billion. Net operating income for Q4 FY 2022 stood at INR 4 billion, a strong 10.6% growth over Q4 FY 2021, and a 6.6% increase on a sequential basis. Our net operating income for the year stood at INR 14.9 billion, a growth of 8.2% over the previous year. We continue to maintain NOI margin at 80%+ throughout the year. We announced a distribution of approximately INR 2.73 billion, which is INR 4.61 per unit for the quarter. The distribution comprises approximately 93.5%, which is 4.3 per unit of dividend, which is now subject to tax in the hands of unit holder, and approximately 6.5%, which is 0.31 per unit of interest. This translates to an annualized distribution yield of 6.7% on the issue size. Cumulatively, for the financial year 2022, we distributed INR 10.9 billion, which is INR 18.4 per unit. On the funding side, our leverage on the portfolio on a consolidated basis continued to remain low at 15.7%. Our net debt as on March 31, 2022 was INR 42 billion. We have undrawn committed lines of INR 6.8 billion from financial institutions. Our robust balance sheet provides us flexibility to pursue both organic and inorganic growth opportunities. During this quarter, we raised INR 5 billion through issuance of listed non-convertible debentures at an attractive coupon of 6.35% per annum. We converted INR 9 billion of variable cost debt to fixed cost debt during the year, thus taking our fixed cost debt as a percentage of the total outstanding debt of the portfolio to 45.9%. In aggregate, we further reduced our borrowing costs by approximately 50 basis points during the financial year 2022. We continue to pursue opportunities to further optimize our borrowing costs. The gross value of our portfolio, as valued by the independent valuer, stood at INR 264 billion as of March 31, 2022, which is a 5.7% increase over the value as at March 31, 2021. Our NAV per unit has increased to INR 364.9 per unit as on March 31, 2022 from INR 345.2 per unit as of March 31, 2021. Post the approval of the board, we consummated the sale of approximately 40 acres of land at Mindspace Pocharam, Hyderabad, for a consideration of INR 1.2 billion. Further to the ROFO notice received in respect of Commerzone Madhapur, and based on the approval from the governing board to evaluate the opportunity, the manager has onboarded advisors and has progressed with the diligence. Our investor base continues to expand, especially since the reduction in trading lot size. Since listing, our unit holder base has grown threefold to approximately 24,000 unit holders as on March 31, 2022. We expect positive regulatory reforms to help improve liquidity and deepen the market for these instruments. To conclude, the improving market conditions for commercial real estate and the positive leasing trends are expected to help the growth of NOI and distributions from the portfolio in the coming financial year. With this, I request the operator to now open the floor for Q&A. Thank you, everyone. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may enter star and one on their touchtone telephone. If you wish to remove yourself from the question queue when your questions have been answered, you may enter star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, you may enter star and one. We have the first question from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead. Yeah. Good evening, everyone. Firstly, congratulations on doing very well in a very tough and challenging overall environment for the office leasing space. Sir, you spoke about a lot of traction in the leasing, and you expect things to improve significantly going forward. Could you just quantify this in terms of what is our gross leasing expectation for the year? We have done 4.5 last year. For this year, what is our lower or upper end for leasing? If you could break it up into of the expiries of 1.1 million sq ft which you have in 2023, how much do you expect to retain? How much exits? Versus that, how much fresh leasing in the existing assets? Any guidance on pre-commitments on leasing for the upcoming assets? That's the first question. Hi, Adhidev. We are not supposed to communicate. Having said that, the trend seems to be quite reasonably strong. We're quite excited about the market demand dynamics in each of our micro markets. I can just give you a broad highlight on primarily the re-leasing space that comes for termination, surrender or expiry this year. Only 1.1 million sq ft in our portfolio comes for the churn this year. Out of that, we already have a visibility of almost 600,000 sq ft of re-leasing, and we are just at the beginning of the year. For under construction, most of our assets we pre-leased last year. Ladies and gentlemen, we have lost the line for the management. Kindly stay connected until we reconnect them. Thank you. Ladies and gentlemen, we have the line for the management reconnected. Please go ahead. Yeah, sorry about that. Just got cut. We are seeing demand on under construction assets across the board. Okay, if you could, this question is for Preeti. Is there any broader guidance on NOI and DPU for the growth being single digits or double digits, any lower or upper end again for the DPU? Yeah. As of now, we are not giving any guidance in terms of exact numbers, but as Vinod said, we are feeling positive about the growth numbers for next year. Obviously, the huge amount of leasing that we've done this year also will start generating rent, as we move ahead in the quarters. Obviously, we're not going to see all the rent starting from quarter one. As we move ahead in the financial year, we should be able to see, you know, increase in rent, and therefore that should translate in NOI and, dividend growth. I would end at that. Okay. Fine. Yeah. Thank you and all the best. Yeah. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may enter star and one. We have the next question from the line of Mohit Agrawal from IIFL. Please go ahead. Yeah, thanks for the opportunity. My first question is, you know, in the NDCF walk down, we see that the CapEx number has gone up substantially on a QoQ basis, you know, from about INR 140 crores roughly to more than INR 200 crores. Any reason for that? That's essentially because of some of the assets also which are almost nearing completion. We've also incurred spends on upgradation of our parks, which of course has been continuing, but some of them are almost seeing conclusion. Some of the projects which have just started or some of the buildings which we've started off. It's cumulative impact of, you know, seeing the assets almost nearing completion, the buildings which were under construction. That potentially is just routine. Obviously as the assets come to the end, at that point in time, you see more spend. Okay. Okay. All your bonds and finishes, et cetera, happen towards the end. That's why you see a higher towards the end. Okay. Okay. Yes. Second question is, you know, on your gross leasing numbers, you know, specifically for you, what we've seen is that, you've been able to lease a lot of under construction assets. Just trying to understand, you know, what's the thought process of the tenants there, if you could give some color. You know, who are these kind of tenants, and probably what is the inclination to, you know, lease out under construction assets versus ready inventory where also you have vacancy available. Could you give some color on, you know, which kind of tenants are these and, you know, what is their thought process? Sure. If you can just rewind back a few quarters in our conversation, we had said that we will start seeing the bigger demand for the 12-18 month scheduled supply, which will come up first when people want to see growth in the next 12-18 months. All of those customers actually came forward where they had a sizable need for space, whether it was half a million to 1 million sq ft or more. For that, if a building is under construction, it can suitably get customized for the newer age office space requirements that most of these customers are looking for. Just as we had looked at it in the past, you got those opportunities in the right place at the right time for the right assets. They were very concerned about health and safety protocols, asset management, et cetera, which kind of triggered the need to go into safe havens in parks where they could see all of that as the right mix for their employees when they want to come back to work. That's really the opportunity we grabbed with both hands. Okay. Okay, understood. My last question is, you know, just wanted to get your thought process of the sponsor or management on the non-ROFO sponsor-owned assets. So let's say, you know, we talk about the Altimus asset at Worli. Just trying to understand, could these assets be also considered by the REIT to be, you know, purchased directly from the sponsor? Or will they first have to be a part of the ROFO arrangement, and then it can be inducted into the REIT? As per what we had envisaged and projected out right at the start, we are excited about a lot of ROFO opportunities, wherein wherever the assets are a million plus, and pre-identified or assets which will be under construction in the sponsor group, which could be offered first as a ROFO to the REIT. A lot of those opportunities exist across markets, and we're looking at those assets very closely because that will give us the growth we want for our REIT, besides looking at inorganic opportunities. Okay. The way I understand is that it's not necessary for it to be a part of the ROFO. Mohit Agrawal, all the assets which are, you know, above a particular threshold as per our ROFO arrangement, would be offered to the REIT. Now obviously assets where we have other joint venture partners, those are the assets which of course, before they come to the REIT, we would have to have discussions. Otherwise, largely, a large chunk of the sponsor assets should be available to us. Okay. Specifically, Altimus was in any case being built when we did the REIT, so. Okay. Understood. Thanks a lot, and that's all from my side. Thank you. We have the next question from the line of Kunal Tayal from Bank of America. Please go ahead. Sure. Thank you. Couple of questions from my side. Vinod, the first one, you know, did hear your comment that demand generally should be strong as you look out into fiscal 2023. Any additional color as to, you know, whether the leasing momentum has already picked up or should we expect to, you know, this to build up gradually through the course of the coming year? Likewise, by market, would you think that, you know, between your two big exposure areas of Mumbai region and Hyderabad, one could do significantly better versus the other? Because there have been certain comments saying that the return to office has just been so much stronger a trend in Mumbai and that might just do better. Any comments there would be great. Sure. The way I see it is primarily the large big-ticket demand drivers have started coming onto the street to look at quality assets. Most of these guys are looking at something in the pipeline which gives them 12-18 months to start occupying those assets. Following them, we will start looking at the 100, 200, 300 thousand sq ft demand, which is beginning to start to come in most micro markets. That is what we'd emphasized 6 months ago and 3 months ago, and that's what's panning out in the marketplace right now. You will see both kinds of demand in each of these markets. Now, coming back to Hyderabad and Mumbai. Our Hyderabad has about 1 million sq ft worth of churn opportunity. We are quite excited actually about that, purely because rents have firmed up in those micro markets. Today, to me, that vacancy is actually far more valuable because we've already done the hard work of upgrading, and now we are waiting for demand to come and grab these assets at the prices that we want them. For the Mumbai asset, like we mentioned to you, we have denotified 1 million sq ft, which is under construction. We saw significant demand for that asset. Half of that is already pre-leased, and the rest of the half, I wouldn't be surprised if it gets leased fairly quickly in this financial year, while we're completing the building in this quarter. The demand is certainly there the way we have projected. We're just waiting for the SEZ clarity on allowing for non-SEZ occupiers, and then we start looking at filling up those spaces as we're in the process there. Got it. Thanks, Vinod. The second question, Preeti, you know, just in terms of the NDCF outlook for the year, should we expect that, you know, the NDCF growth trend could mirror the revenue growth trend? Because, you know, I'm assuming that because of rental advances, you know, that might be one factor which aids your distribution. But CapEx again could be on the higher side. Any color on how NDCF could compare vis-a-vis the revenue growth out there? Yeah, Hans. No, that would not be the case because the revenue growth, there are deductions after NOI before we reach the distributions in terms of tax, interest, et cetera. The revenue growth will not necessarily translate to a similar distribution growth. Directionally, as I said, with the revenue growth happening next year, we should see a increase in the distributions as well. It may not be commensurate. Understood. Thank you. Thank you. We have the next question from the line of Kunal Lakhan from CLSA. Please go ahead. Yeah. Hi, good evening. Vinod, my first question was on Airoli East. Our vacancy has kind of increased in this quarter there. You know, just two related questions over there, like, you know, we have received occupation certificate for half a million sq ft. Have the tenants commenced the fit outs there? And when can we see the rentals commence here? Yeah, Kunal. They've already commenced fit outs, and we are seeing strong demand gradually for the balance half a million that will be leased out. Okay, great. My second question was on your slide 21 in your presentation, the balance CapEx number. If you can just help us reconcile that number, like, because that INR 20 billion seems a bit on the higher side. What does this include? Like, which? Because the assets that the under construction projects that you've listed out here, I'm unable to reconcile this number. Sure, Kunal. Let me just help you reconcile this number. Essentially, the balance CapEx largely is driven by assets which are under construction. Now, as you said, the bigger chunk of this is the redevelopment building of over 1 million sq ft, which we are doing at our Hyderabad project. That's taking a big chunk of the cost. This will be almost up to INR 600 crores out of this 23. We also have, as Vinod mentioned, we put another building in Pune also into construction. That again takes a big chunk of this construction cost. That's coming. We also have the data center which is under construction, which is also adding to this number. We've also taken new upgrades now. One is a clubhouse in Hyderabad. We're also upgrading our Pune assets. Those costs also come into this balanced construction cost to build them. Essentially, you actually are seeing even an increase versus what we had given out last time. That's also again, essentially because of this new building which is coming up in Pune and the upgrades. Just to add to what Preeti said, the Pune building, for example, was earlier 600,000 sq ft. Now it's become a million sq ft. We've got 400,000 square foot more of area because of extra FSI that came about with the new change in the development control rules in Pune, which became an opportunity. We revised the building plan quickly and that construction has commenced. That's why that budget also has gone up to accommodate for the additional 400,000 sq ft. Yeah. Got it. Thanks, Vinod. Preeti, one more question for you. So we did an NCD this quarter at 6.35%. That's great. But how do you see interest rates going on from here, in, say, FY 2023 and more so in the midterm? Yeah. Kunal, obviously we've seen the interest rates on the rise already, and we do expect some more increases as we go along in the year. Now, in terms of our cost of debt, today about 45% of our debt is fixed cost debt. There obviously we're not seeing any increase. On the variable cost debt, obviously we will see increase, depending on the trajectory in which the interest rates rise. Sure. That's very helpful. Thanks a lot and all the best. Sure. Thank you. Thank you. We have the next question from the line of Satinder Singh Bedi from Eon Infotech. Please go ahead. Yeah. Thanks for the opportunity and congratulations on a stable set of numbers and also for managing expiries very well. I think so you've got a very small expiry count, which bodes well. I've got two questions. One for Vinod. Vinod, can you give us a flavor on the overall return to office? Is it slower than what was envisaged six months ago? Because otherwise, like in last two years, the total number of increase in IT staff in large organizations, the kind of clients that you have is typically about 25% higher. Somehow it is not translating into great take up. Probably the return to office is working out slower than was anticipated. Is it going to be something that will get more embedded? Because two years, okay, people continue to work from home, TCS has 5% return to office, and so on, so forth. If you could give a color on that. And also on your Pocharam and Porur, what are the plans? We seem to be struggling in these two places. Sure. First part of your question, out of the 2 years, 18 months, pretty much everyone was working from home. In the last 6 months, you've seen domestic India get back to the desks pretty much between 80% and 90%. All the CBD, as you can see, the traffic is back on the streets. All the public places are packed. In the airline, you don't have space to stand in the aircraft, possibly if you didn't have a seat. You're seeing everyone back, where the action is. From a tech footprint point of view, two things have happened. They've seen tremendous amount of growth in their businesses, and they have gone on hiring. The online hiring opportunity has given them a better opportunity of expanding the business footprint at that point in time when the need was there. However, they are realizing that for a lot of collaboration and for a lot of ideation, they want their employees back on the desk. They've just been very, very careful about bringing footprints back so that they don't have to trip on their shoelaces, which is why you've seen only the tech footprint moving slowly back to the office. Everyone else actually in every other place is back. The way we see it is it's like between March and May, our occupancies within our parks have moved from 14 to 25%. The way we see it is it will move really quickly towards the 50% number. What is also happening is, as you're seeing new growth and new space and retrofitting of current space, they have started accommodating for recreation, entertainment, open spaces, elbow room for collaboration. By default, they are dedensifying very slowly but very smartly on their footprint. Because of that, they are asking for more space that's contiguous. We have started seeing even that. As clients are coming back, they are trying to lock up more contiguous space within the neighborhoods for accommodating the same number of employees and the growth in a far more open manner than the densified manner they were used to earlier. All of those trends have started becoming visible. It's just that it's moving slowly, but you must remember that the volume of people working in the tech footprint is massive. Even when I say 10% change, it converts to 50,000 people. That's how the number is changing across the board. We are seeing the footprint coming back. Our food courts are getting full. People are waiting in line to get their dosa in the afternoon. It's a very pleasant sight in most of our parks now. Mr. Bedi, does this answer your question? Yeah. Okay. There was a second part to it, but somehow I seem to have lost the line. Yeah. We lost you for a second, I think, probably. Yes. Yes. What was the second part of your question? The second was our plans to address the challenges at Pocharam and Porur. What is it that we plan to do? Because the occupancy seems to be struggling and stuck. We are not seeing any challenge in Porur. Chennai market is the way it is, and we are beginning to see it picking up. We are reasonably confident of leasing this space out, significantly in this financial year. For Pocharam, we've not seen strong demand. I don't see strong demand coming back to that park. We are watchful of it, but I wouldn't give you any direction on leasing that space in this financial year. It's a very negligible area that we have left there to lease. Yeah. Okay. Okay, fine. Okay. A question for Preeti. Preeti, ma'am, have you done a sensitivity analysis of what the interest rate increase will have in terms of impact on the distribution? Because while we do have about a 40% fixed, I think it's also a reality that a lot of it that almost 40% of that matures in this financial year, 2023. Our percentage of fixed will fall. Given the way the interest rates are headed, I think there could be a material impact on the DPU. Any view on that? Yeah. We don't have a substantial part of the fixed debt maturing this year. We just have about one issuance which happened just immediately after the listing, which matured. Otherwise, everything else remains intact. Yes, of course, it's a fact that the variable cost debt, that's something which will see a rise. Now it depends on how much of rise do we see in the financial year. That should not have a very material impact on the overall cost. Of course, it will have some risk, but I don't expect that to have a very significant impact. Some impact, of course, will remain because through that it can be our interest cost is going to be higher. I just wanna add to what Preeti said. What's important in all of this really is speculative supply has paused. Yeah. With debt not going to be easily available, we are seeing a significant opportunity in the micro markets where we are dominant to be able to bring in collaborative supply and take a larger market share going forward. Actually, we are more keen to build much faster because we have so much headroom for debt. We wanna take that, use that right. As we're seeing because of the inflationary pressures, we are seeing rents moving up, and that's a big opportunity going forward. Yes. No, you're right, Vinod. I think rent inflation, okay, with a lag is a clear opportunity for this sector. Okay. It's just that because the occupancy is still low, it probably will take about four quarters more to flow in, but I think you're bang on. One housekeeping question, Preeti. This Mindspace Malad, our RFO, revenue from operations has gone up quarter-on-quarter from INR 206 million to INR 287 million. That's a material 40% jump. What has caused this? The NOI is stuck at the same level. NOI is INR 181 million, has moved to INR 186 million. Anything we are missing here? I This is slide 26. Slide 26. That's actually the Square, BKC number. No. I'm talking of Mindspace Malad. The line above that. Okay. Okay. Actually, I think that's a typo there. This has both the projects. It's basically for the SPV Avacado, which has both the projects, Malad as well as the Citibank building in BKC. This actually is a combination of the two. The BKC building is generating rent since now. We have part of the rent which commenced in this quarter, which has not been. Okay. You are saying the RFO against Mindspace Malad covers the revenue both from the Malad and BKC? Yeah. The NOI is split up. Okay. It's fine. Yeah. That's fine. One final word, Preeti, I think the NDCF buildup is looking much better this time than previous. Compliments for that also. I think it's much cleaner. Compliments. Yeah. Thank you. Thank you very much. All the best. Thank you so much. Thank you. Before we move to the next question, we would like to remind participants to ask a question, you may enter star and one. We have the next question from the line of Shashank Savla from Somerset Capital Management. Please go ahead. Hi. Thanks for the opportunity. My first question is on the occupancy. If you look at the micro markets, we've seen vacancies increase in Mumbai, Pune, Hyderabad, even though the environment is getting better. Overall, when do you see the actual occupancies improve for the micro market as well as for yourself? Most of the micro markets we are in, if I give you an example for Pune, out of a large portfolio that sits for us in Pune, we have less than 23,000 sq ft of vacancy currently. We're desperately wanting to bring in more supply to lease as fast as we can. The Grade A assets will see traction of leasing disproportionately higher to the cumulative supply in the micro markets. We've been saying that time and time again, and we will see that pan out even more strongly in the coming quarters, where Grade A assets will be lapped up and the rest of the assets will still show vacancy. While your macro numbers will show vacancy, there'll be a disproportionate occupancy rise on the grading in each of the micro markets. Right. Because I'm just, for example, I'm looking at Madhapur, which you've been mentioning is a very strong market. On the overall macro numbers, the vacancy rates has increased from 2.6% in 2019 to 6% in 2020 to 10%, and now last quarter increased to 12%. It seems that the supply is increasing at a much faster rate, even though demand is stronger. Yeah. What happens is Hyderabad has a unique scenario where there's nothing called FSI, so the densities vary from site to site. Each of those blocks are 1 million or 2 million that suddenly adds to the supply bucket. They're not necessarily all Grade A. When you start looking at them and breaking them out into Grade A and other supply, you will see that Grade A has started to see traction of occupancies, which are rising. We were constructing in the neighborhood, a 1.8 million asset right through COVID. We started pouring concrete right at the beginning of COVID, and even before we could complete the asset, we have fully leased that asset to a Global 100 client. If you're building the right asset in the right micro market, you got demand even in those markets. You are already seeing demand rise right now. Right. Overall, your current occupancy levels are around 84%. Like, what, how much time do you think it will take to reach the pre-COVID levels of, like, 90% plus? We are hopeful of this financially and getting us in the right places. Right. Okay. The second question was on the CapEx bit, which the INR 23 billion is mentioned. Approximately what timeline is that for? Is that over the next 3 years, 4 years? Yeah. It will be between 3-4 years because some projects are just starting, and they'll take about 3-4 years to be completed. Is it- Major sites will be within the three years. You'll have some spill over to the fourth year. Okay. Is it safe to assume that the CapEx will be funded from debt, so the other revenues would then fall into the NDCF? That's right. Okay. For the ROFO, I just wanted to understand what is the evaluation criteria, and as well as what the funding for the ROFO. Is that also predominantly through debt? Yeah. In terms of evaluation, I would say, you know, the board has done. The unit holders would also like to see the acquisition being accretive. That's what we as a manager also will look at. In terms of how we are going to do the acquisition. Now, obviously, in all likelihood, it could be a swap of units of the REIT in lieu of CCPS. While the other options of debt are available, given that the low debt that we are sitting on. In all likelihood, it could be by way of a swap. We still need to conclude it, but this is the initial intent. Okay. Is there any plan to increase the share of the fixed portion given that, going forward there seems to be a rising rate environment? Is it easy or economical to increase that share from this current 46%? Yeah. We will still look at converting some of our variable costs set into fixed. We know that we already entered a rising interest rate situation. We'll still work towards converting some of our variable to fixed. Let's see how much we're able to achieve. Right. The plan clearly is to do little more of fixed costing. Thank you. Thank you. We have the next question from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Thank you so much, and good evening, everyone. If I look at the whole of fiscal 2022, then there's roughly about INR 240 crore gap between the CapEx and the debt drawn. How should we think about it for fiscal 2023? Sameer, as I had mentioned last time as well, there will be little amount of the gap which we'll see funded out of debt. It's gonna be a small component. Otherwise, you should not see too much of a gap. Some will still remain, as I've always been maintaining, but major chunk of your distribution should be funded out of the FFO. Okay. How do you plan to make up for this INR 240 crores? You said some would still be there, maybe INR 150 crores, INR 200 crores. How will you make up for this big number? Sameer, that's one number which will only, I would say, neutralize eventually over a period as the NOI growth happens on account of revisions, escalations, occupancies, et cetera. That's something which, hopefully over the next two, three years we should try to rationalize. Till then, some bit of this will continue. Hopefully, I'm hoping that should keep reducing. Some bit, I won't say that too significant, but some bit you may be able to see in the coming year, I think. Okay. Yeah. Preeti, that's very helpful, but I'm a little confused. Will this go down substantially in fiscal 2023 or will it take two, three years? I'm not very clear on your answer on that. I won't say it will go down substantially from where it is today. It will definitely see a decreasing trend over the next 2-3 years as I said. I won't say that you will see a straight big reduction, but it will neutralize over the next 2-3 years. Okay. Is this what you had in mind when you were answering previously that the rental growth or the top line growth may not necessarily translate into NDCF growth? What is the big item out there? Some bit of that, but also other parts also come in, Sameer Baisiwala. You likely will have interest costs increases. All these, your tax, et cetera, all those also come into play. That's why you'll not see exactly the same growth in NOI translating to NDCF growth. Got it. Very clear, Preeti. Thanks a lot for this. Thank you. Another question is on Airoli East. We have roughly about 2.1 million sq ft, which we need to develop. What are your thoughts on these rough timelines? You know, when do you expect to start on this? Sameer, while it was 2.1 million sq ft, the valuation we had taken only was approximately 800 odd thousand sq ft. That still does give us room to build more. We want to take that up. It is waiting for the SEZ regime to settle in so that we can bring in a non-SEZ building into that whole landmark. Okay, Vinod. Does it mean that you are taking only a small portion? Your valuation is one thing, but you have disclosed a much bigger volume number. Are you tentative that the balance may or may not happen? As you can remember, we had just entered into COVID. To be conservative, we are taking 800,000 sq ft for the value, while the potential was to be 2.1. Whatever gives us maximum value accretion, we will exactly do that for the asset. We are seeing how the demand trajectory is moving. Nothing stops us from increasing the density if we see the demand is going to give us returns. Okay, great. Yeah. Thank you so much. Thank you. Before we move to the next question, we would like to remind participants to ask a question, you may enter star and one. We have the next question from the line of Abhinav Sinha from Jefferies. Please go ahead. Hi, everyone. Just had a few clarifications. Did I hear correctly that you're expecting occupancies to rise to 90-odd% pretty soon, maybe in the next 1, 2 years? Is that correct? You mean to say occupancies from the current occupancy of area? Yes. Physical occupancies, I think, will be around the 50s and 60s% over the end of the financial year. Sorry. Physical occupancy will be how much? Physical occupancy today is 25%. Right. We see it'll be between 50% and 60% by the end of the year. The committed occupancies will rise closer to 90-odd%. That's right. Yeah. I would say. Okay. Second question on the various micro markets, and you know the rents have been flat, understanding this also. But which are the ones that you know as of now you are most positive on and where we can see the movement, say you know upwards in the next 3, 4 quarters? All of these markets are seeing a strong trajectory of rent movement. Yeah. Okay. Uptick of say 5 odd% is likely in the year, or you are hoping for higher numbers? I can't make a statement that can directly correlate this, but I think the markets are getting stronger for accepting. They want quality real estate. It's not really about rent. Okay. Quality real estate is in a way attracting most of the tenants, and you're getting the value you want once you are able to offer a quality office. There is definitely going to see a rise in rents. Okay. Thank you. Thank you. Ladies and gentlemen, as we have no further questions, we will now close the Q&A session. Ladies and gentlemen, on behalf of Mindspace Business Parks REIT, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.