Good afternoon, ladies and gentlemen, welcome to the Mindspace Business Parks REIT's Quarterly Conference Call for Financial Results for the Quarter and Year ended March 2023. As a reminder, all participant lines will be in listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Kedar Kulkarni. Thank you, over to you, Mr. Kulkarni. Thank you. Good afternoon, everyone, and thank you for joining this fourth quarter and financial year 2023 earnings call of Mindspace Business Parks REIT. At this point, we would like to advise that the management may make certain statements 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. I would now like to welcome our CEO, Vinod Rohira, and our CFO, Preeti Chheda. They'll first walk you through the business update and the financial performance during the quarter and year. We'll then open the call to Q&A. I now hand over to you. Over to you, Vinod. Thanks. Thank you, Kedar. I would like to extend a warm welcome to all participants who have joined us here. Financial year 23 has been the year of returning to normalcy. After innumerable debates on future workspace strategy and several months years of working from home, the consensus has emerged within the region that office is going to be the mainstay of future work environments, with productivity being much higher at the office. Additionally, financial year 21 and 22 witnessed a huge spike in accounts across the spectrum of tech services, which yet did not translate into increased office footprint. During this period, we expeditiously executed the business strategy of re-energizing our parks and keeping them ready for the renewed preference for experiential workspaces with the highest standards of health, energy efficiency, wellness, ease of navigation, and safety. We were able to carry out this complex task seamlessly during the downtime with the minimum discomfort to our tenants. Over this period, we have also seen an increase in physical occupancy in our parks. The parks have seen the physical occupancy, which fell below 10% during the pandemic, now rise to circa 56%, with occupiers now formally working on returning to their offices. Organizations today desire to provide best-in-class work environments to their employees that they would look forward to visit every day. There is a prominent shift in demand towards quality-graded assets managed by institutional asset managers. We achieved gross leasing over 4 million sq ft during the financial year 2023. We started the year with a committed occupancy of 52.3%, which has risen by 470 basis points during the financial year to end at circa 89%. The committed occupancy at our parks in Pune, TKC, and Malad are near 100%. Our parks in Madhapur and Borivali have also seen the committed occupancy rise close to 95%. Healthy demand for our upgraded offerings at these locations has encouraged us to bring forward the timelines of future developments in Pune and also undertake redevelopment of existing buildings at our Mindspace Madhapur park to create long-term value to our stakeholders. Delay in the implementation of SEZ policy reforms has kept the demand for SEZ spaces muted. Representations from industry associations have been made to the government to effect the policy overall at the earliest. These soft reforms would not only bring back the demand for these office spaces, but additionally helping generate tax revenues and employment by increased occupancy. As per IPCC reports, calendar year 2022 was the second-best year ever in terms of all India office leasing. While several markets across the globe have yet to come close to pre-COVID levels, the Indian office market has bounced back from the COVID-induced slump. The vast availability of skilled talent in India, strong IT industry, offshoring capabilities, growth of BFSI industry, and overall growth of the country has made India among the most promising markets for cutting-edge technology support services at a very attractive cost base. GCCs and GICs show a reduction in cost and higher productivity, along with young talent, which continue to push forward the hiring process in the near future. This will result in a need for expansion and consolidation. With the global recessionary environment, we cautiously expect the demand for office spaces to reactivate once the global economic conditions become more favorable. We continue to explore other growth opportunities within the portfolio and gear up to capitalize on third-party acquisition opportunities. On the sponsor side, we are undertaking new developments in several pre-micro markets of the cities we are present in, which would add to the REIT growth pipeline. We continue to move steadfast in our ESG journey with increased focus on delivering on short-term and long-term targets. Our focus on sustainable operations has resulted in 97.3% of our portfolio being certified with a minimum gold LEED IGBC certification. During the year, we have come out with our green financing framework and green leasing framework, which will serve as a guide to our financing and leasing plans. We raised our first green bond in line with the principles set out in the green financing framework. With this issuance, our collective green financing availed has increased to 19% of our debt outstanding. We are also engaging tenants with our ESG goals. It is critical to embedding our sustainability practices deeper within our operations. I would now like to take you through the specific operational updates for the quarter. We have leased 0.6 million sq ft, of which 0.5 million sq ft was on account of new and recent area leasing and 0.1 million sq ft was re-leased at re-leasing spread to 23.8%. The committed occupancy of the portfolio rose to 79%. Tenancy occupancy stood at 89.1%. The average rent achieved on the 0.6 million sq ft leasing was INR 74 per sq ft per month. We have handed the first phase of our data center in Airoli West to Houston Digital Group. Our revenues from operations grew by 13.9% year-on-year to INR 5.4 billion. Our net operating income for the quarter grew by 9.2% year-on-year to INR 2,364 million. Our distributions for the quarter stood at INR 2.85 billion or INR 4.81 per unit. We raised the INR 5.5 billion through India's first REIT level green bond issuance. The weighted average cost of debt stands at 2.67%. Our portfolio is now further diversified with over 200 plus tenants compared to 175 plus tenants at the end of financial year 2022. We are proud to announce that Mindspace REIT is a Great Place to Work certified for the second consecutive year. We received health and safety certifications for 41 buildings across our portfolio. We won four awards at the 14th Annual Estate Awards 2023 by ETRealty and Franchise India. We won IT Park of the Year for Gera Commerzone Kharadi. Gera Commerzone Kharadi also won the award for the Most Sustainable Architecture Design. Our Office Buildings of the Year award for Building 9 Airoli West. Mindspace REIT won the Commercial Developer of the Year for the Western Region. With this backdrop, I hand over the call to Preeti to take you through the financial updates. Thank you, Vinod. I will now take you through the financial updates for the quarter and year ending 31st March 2023. Our revenue from operations for FY2023 grew by 16.2% year-on-year to approximately INR 20.2 billion. Adjusting for one-time compensation received from a tenant in Q3 FY 2023, the Net Operating Income stood at INR 16.9 billion, recording a growth of 13.2% YoY. Coming to the quarterly performance, revenue from operations for Q4 FY 2023 grew by approximately 13.9% year-on-year to INR 5.4 billion. We recorded NOI of INR 4.4 billion for Q4, registering a growth of 9.6% YoY. Our NOI margins continue to be above 80%. We announced a distribution of approximately INR 2.9 billion. That is INR 2.81 per unit for the quarter, recording a growth of 4.3% year-on-year. The distribution comprises approximately 91%, which is INR 4.37 per unit of dividend. This is not subject to tax in the hands of unitholders. Approximately 8.9%, which is INR 0.43 per unit of interest, and approximately 0.2%, which is INR 0.01 per unit as other income. This translates to an annualized distribution yield of 6.9% on the issue size. Cumulatively for the financial year 2023, we distributed INR 11.3 billion, which is INR 19.1 per unit. Since our listing in August 2020, we have distributed a cumulative amount of INR 27.9 billion, which is INR 37.13 per unit. To further our commitment to sustainable business practices, we recently concluded the issuance of India's first REIT level green bond. We released our inaugural green financial framework. Under this Mindspace REIT or its asset FPV, may undertake issuance of green debt securities in form of bonds or debentures. The framework is aligned with the green bond principles developed by the International Capital Market Association. Using this framework as a guiding principle, we raised INR 5.5 billion with three year maturity at a fixed coupon of around 8%. Also, during the financial year, we raised aggregate INR 16.4 billion through bonds across three and five-year tenures. Our aim is to have an optimum mix of fixed and variable cost loans spanning across various maturities and maintain a healthy balance between fundraising from banks and capital markets. We also expanded our investor base by attracting more insurance and pension funds to invest in Mindspace REIT securities. We experienced high interest rate situation since the whole of FY 2023, which offset the gains we made from the growth in NOI. We are hoping the interest rates to stabilize in FY 2024. Our net debt as on March 31st, 2023 was approximately INR 60.2 billion. In addition, we have undrawn committed lines of approximately INR 13.7 billion from financial institutions. Our NCD continues to remain the lowest amongst the peers at 17.9%. Our robust balance sheet provides us flexibility to pursue both organic and inorganic growth opportunities. In Q4 FY 2023, we appointed Kzen Valtech Private Limited(Garbled audio) as a valuer of Mindspace REIT. We also appointed JLL as the independent consultant to review the methodology and assumptions used by the valuer and valuation of Mindspace REIT so far. Gross asset value of our portfolio as valued by the independent valuer as on 31st March 2023 stood at INR 280.2 billion, recording a growth of 2.7% over 30th September 2022. 92.7% of our value comes from completed assets. Our NAV per unit has increased by INR 1.6 per unit from INR 370.32 units as of 30th September 2022 to INR 371.9 per unit as on 31st March 2023. As these instruments are gaining popularity among retail investors, our retail unit holder base grew by over 25,000 unit holders during FY 2023. We are encouraged by this participation and shall work with industry associations and regulators to increase the awareness of this product among this category of investing investors. We also welcome NSE's initiative of starting a return in which index. We hope this index would help bringing inflows into REITs and invest from actors as well as categories of funds and thereby improve the liquidity of these instruments. We also hope other exchanges support these instruments in similar manner and consider inclusion of these instruments in the main three indices. With that backdrop, I hand the call over to the operator to open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands-free while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue is happening. The first question is from line of Vivek Agarwal. The first question is from line of Kunal Lakhanpal from HSBC. Please go ahead. Yeah, thank you so much for the opportunity. My first question is with respect to the GAV and NAV numbers. The GAV growth has been, you know, impressive at 20%. NAV is only about 2% up in a full year basis. It's largely attributable to debt. How should we read this NAV growth number? Hi, Kunal. Preeti here. The GAV has grown by approximately 2.76 as of September. The NAV growth is 1.63 units. Essentially, it's been approximately 20% growth. I'm not too sure what exactly. NAV growth has been slower than the GAV growth, right? I mean, should that be the case? When GAV would actually grow, in line with how market rentals or your, you know, contractual escalations would move, while NAV would largely be a function of where the net debt is. Yeah. Really what happens is, whenever as you keep adding assets in terms of locations, your NAV also grows up, but your GAV also grows up on the very similar amount. The impact on NAV is higher than the impact on the GAV. Even if I'm to change as an example, if you had your completed portfolio, which would have grown by X amount, to that we add asset which you are entering, because that's also adding value to your GAV. The similar amount because it's net funded, it's added to your NAV. Therefore, you see the GAV increase higher than NAV. Right. Okay. Understood. My second is, the average market rentals that you report seems to have fallen on a quarter-on-quarter basis. How should we read that? What are the market rental trends which you are experiencing? Market rents haven't fallen quarter-on-quarter. Market rents remain stable for each of the markets that we are in. We are seeing, demand not getting disrupted because of rents. Are you seeing an improvement in the rental environment or not yet? Certain micro markets, depending on, at what asset cycle you are, you are seeing actually firming up of rents. Okay. Okay. That's all from my side. Thank you so much. Thank you. The next question is from the line of Sachin from BofA. Please go ahead. Sure thing. Kunal. Sure, Sachin. Good afternoon. Two questions. One, can you talk about the revisions to expiry schedule for fiscal 24? You know, what part of your customer base this is coming from, and, you know, what have been the reasons here. You know, keeping in mind that you also commented that, you know, there is the outlook of a recession that needs to be incorporated into the lease plan. How would you think of the occupancy levels observed during the course of the coming year? Essentially, churning is part and parcel of most of these companies that you're seeing. The, the larger the portfolio across India will have most of those large occupiers recalibrating from time to time. This happens every two, three, four years. Not just, you know, COVID or people with environmental. We're seeing this over the last 10, 15 years. This is all part and parcel of their strategy to churn. Most of these spaces that have come are a mixture of that. We see them as a great, if you ask me, mark-to-market opportunity because these spaces were actually at older entries, and we didn't have adequate supply in those markets. Leaving aside whatever might happen to the HCB footprint, which we will figure out the denotification and take that forward. Otherwise, these become opportunities to reuse at mark-to-market. Is there a category that, you know, these 10 rents come from, like either IT services or BFSI? Is there any categorization like that? For this matter, you know, are you seeing that The exit spaces might be higher exit versus non-exit space? No, no. It's a mix of everything. Okay. It's not that people are walking away from the HCG because they don't like HCG or whatever. It's more about what committed contract they had taken or what typical jobs they were doing, for which if the demand probably has shifted, then those accounts will move towards other accounts that are needing to see other growth, which is the trend that is taking place right now. It's not specific to HCG or not HCG. Right. If you could give us any color around how to think about either the occupancy trend from here or, you know, the INR 26 million that of expiry that you have planned for Mm-hmm. you know, what we could be expecting in terms of, you know, the annual percentage because you're keeping that 10% what we've seen in fiscal 22 or something different? I think we've got used to this now. You will see exits as part of the part of the portfolio coming in and going out. As long as you get your assets in the right quadrant, you're building them right, you're keeping them right, and you're attracting top talent to come there, and you have assets where the infrastructure and the larger play is in place. You are seeing an actual shift of demand. We've seen that, I mean, literally, we had 1 million sq ft of unaccounted for, not calculated for exits took place for us in the last financial year. Within the same quarter, we were able to re-lease that particular asset for a far more attractive to the new occupier, who just moved in within the same quarter. You didn't even probably see the blip. To us it was a very exciting time when we had solution on day space, and we had time to take the space back. It actually worked out well because we liked the asset, we liked the location. We explored it to other options that they had, and we were able to re-lease. We see that more in that light than anything else, honestly. Yeah. Thank you. Thank you. The next question is from the line of Arun from IIFL Capital. Please go ahead. Hello, sir. What kind of NOI do you have the end of for FY 2024? Hi, Arun. I can't give you a specific number, but all I can tell is that with the leasing which has happened in FY 2023, range will from that leasing will come in FY 2024. You should gradually see a growth in NOI, but I won't be able to quantify the% increase. Okay. Some area which has got completed, rent from that also will be added to your NOI. Okay. Regarding, if you all have heard about Cognizant comment yesterday that they'll be taking around 11 million sq ft. What impact will this have for Mindtree? We have not heard or see any impact so far. I don't think we will see that impact in the short term coming future. I mean, these are all headline news that keep happening. We've gone through many headlines in the last 26 months. It's part and parcel of business for us. Okay. Just one quick on the free calls. Is it now at 13.7%? Free calls have gone down. 56%. 56%. Okay. Yeah. Thank you so much. Thank you. The next question is from the line of Vivek Agarwal from Individual Investor. Please go ahead. Hi. My questions are as follows. Why is there such a big difference between actual occupancy and committed occupancy which has been there for quite some time now? That was the first question. Why has there been a fall in like-to-like occupancy in the unique area that has been previously been not added to the total area, then the like-to-like occupancy should not have fallen? I just wanted to ask regarding these questions. First part of the question really is because we continue to keep adding new supply into the portfolio. That portfolio, when the under construction supply gets completely signed, the advice and then it translates to lease and then the rent starts over a period of time. That's why you're seeing the difference between actual and committed occupancies. That lag will continue because you're going on infusing new supply every single year. That lag will continue to remain. These are all committed spaces, but still they don't get converted to a lease. Those are the things that we will keep seeing. The other thing that also happens is, like I mentioned earlier, if a tenant vacated, it shows vacancy. By the time we got the next tenant in the same quarter and he starts paying, that till that committed occupancy gets changed, you're seeing that gap. Understood. The fall in the like-to-like occupancy, sir, if you instead remove the previous area, it has not gone the occupancy of committed occupancy somewhere around 82% or give or take half a percent. That is actually the same. It was exactly the same logic. Our portfolio occupancy was 83.7%. Right. It moved to 83.4. It's because Amazon left, we signed HighRadius immediately. Until that gap remained, you are seeing that difference which got refilled back in. Understood. Thank you. two more questions. The tax advantage that we had for distribution, do we have a sense for how long that is going to last? Because when the tax exemption will increase at some time again. Hi. I'm not sure of what tax advantage you're talking about. The distribution being tax-free significantly 90%. Today our composition of distribution is essentially dividend. The purchase, as extensively answered, is unit holders and a small portion is interest. Going forward, as said in the past, it all depends on the capital structure, how that shapes up. Also when we start acquiring new assets, how much does the new assets, you know, bring in terms of debt. Should the expense or capital structure changes, the competition of the distribution change. Do we have any sense if there in the next couple of years, three years, five years? Yeah, I won't be able to comment on such a long term, but at least in the immediate future we expect this to continue as it is. Thereafter, depending on how the capital structure emerges, the competition could change. The last question, why is there a colony in the area of 100% in Airoli? While we continue to have the potential to build up to 2 million odd sq ft in that park, the financial modeling was done around 800,000 odd sq ft. We just kept it to that for the sake of simplicity. The potential continues to be there. As and when we see the opportunity, we will build. Thank you so much. Thank you. Thank you. The next question is from the line of Satinder Singh Bedi from EON Investments. Please go ahead. Thank you for the opportunity. I have a couple of questions for Dilip and then a quickie for Preeti. Dilip, out of this 25.8 million completed area, what is the build up of the SEZ and the non-SEZ? What is the occupancy that we have for these specific buckets? It's in the range of 55.5% thereabout. From an occupancy point of view, we are 95% leased on the non-SEZ space and 88% odd in the SEZ space. Okay. 55 SEZ you are saying. 55 for non-SEZ, 45 for SEZ. Okay. 55 for non-SEZ. I'm assuming that the increments is mostly non-SEZ. Yes. They're all non-SEZ. Any opportunity that you see in terms of the effort to de-notify it completely? Do we have any such report from you that tends to reduce the non-SEZ without waiting for the changes in the SEZ Act? Yes, absolutely. Fortunately for us, between 4 million-5 million sq ft are small buildings, each of which 350,000 odd sq ft in our portfolio. We are going on de-notifying building by building wherever we see the opportunity to offer it and bring it into the spectrum of non-SEZ space. We are continuing to do that while we wait for BASE and other amendments to come through to the SEZ Act. Okay. What is the percentage of tenants in terms of area that has come into GCC category and what is the SEZ? Within IT services, what is considered as typically Asian IT? Potentially between 7%-80% will be GCC, GRC and equivalent. The Indian companies on our footprint who are servicing global clients will be in the range of about 10% odd. Okay. Okay. Okay. Okay. In how bit space tenant improvement is pre-rent. Do we give out a tenant improvement allowance at additional investment or is it paid up by the client? Just want to understand. We have not yet offered any tenant improvements to any client. If we do, we do long amortization of fit outs to clients that we believe have stable revenues and stable rent credit, and we amortize that along in addition to the rent with locking the set up. Okay. Fine. Thank you. Preeti, the recent average cost of borrowing is at nearly 7.6%. Assuming that some of these, some of what renewal and some of it is very short-term. Assuming nothing changes from now, like the rate will remain at the current level, of 650, how does our interest rate move, say with credible, through the year? What is the accumulated impact on this debt? If, if we do not see any further increase in the repo rate and it remains where it is, then from the levels which we have seen in March 2023, we expect another 20 odd basis points increase in the next round. Some transmission of interest rates action will happen, which we expect to happen now because there were effects which have spread out longer. I would say a 20 basis points is something which we would see from now. Does it include the ACG? I assume that will need a complete jump because we've got INR 200 crores of ACG that is coming up for renewal this year. Yeah. INR 200 crore is very small in the overall debt profile. Right. That's about INR 205,000. That INR 200 is not going to move the needle. Essentially, this increase will come from the rate of exhaustion. What percentage of the INR 6,400 crores is employed towards CapEx and hence debt line? Essentially most of the debt which has been raised across this is a historical debt which comes in. Then you have been adding CapEx debt to this. Like for example in FY 2023 we have about INR 700-800 crores of debt which we have added because of CapEx. I would say that essentially the incremental debt which will keep coming every year will be largely attributable to the CapEx spend. What portion of the INR 6,400 is CapEx-related? Essentially, there is nothing like CapEx because all the debt situation is in form of LRD or NCDs at the REIT level. We have not taken any construction finances. That is what you're asking. Okay. All of this is LRD debt or NCDs. If you specify just from point of view of understanding which is that of this, the loan on the bottom line, on the distribution in terms of the interest outflow and part of it goes towards a head capitalized, no? I just wanted to understand what is the interest cost that will impact the distributions in the year. That was the objective. Yeah. Yeah. The interest cost, whatever we are going to incur going forward, I mean, in this current year, will obviously all be on account of CapEx so that will get capitalized. Approximately I would say, close to around 10 or 12 interest is something which we expect to get capitalized. Okay. Okay. For me, thank you very much. Thank you. The next question is from the line of Shashank Chawla from Somerset. Please go ahead. Hi there. Thanks for the opportunity. My first question is on the vacant space. Can you give an idea of how much of that is SEZ and non-SEZ? In terms of your plans to convert some of this space into non-SEZ, where are we in that process? Sure. We are about close to INR 8, 900,000 of ACV in the non-SEZ and about INR 1.6 million in the SEZ. Of the back 100,000 odd square feet is on the verge of de-notification, which we will get through in the coming quarter, which will get released for non-SEZ leases. The rest we will keep filling up in the pipeline. Right. There's no progress on the DESH on or when it's planned to implement it. We don't have visibility on when it will come. It's, I mean, lot of representations made, lot of interactions going on. When it comes is really anyone's guess at the kind of wait for that. Our plan B of de-notifying is all the interest. Yes. Okay. If I remember correctly, like, before the couple of calls with that and you had mentioned by end of this identity might see the occupancy around 90% or something. We are shy of that. What's your expectation of how occupancy is trending in the future? Would it necessarily have to sort of wait for the DESH Bill before we can actually see occupancy move up meaningfully? We don't necessarily have to wait for DESH. We certainly have to get the de-notification process, sorted out so that we can see movement towards getting that, vacancy occupied. It'll be a process that we will follow, and I'm certain will give us opportunity to revisit higher mark-to-market opportunities. Yes. Okay. Just on Chennai region. I mean, I remember from the previous call you mentioned that from committed to actual occupancy takes like 10-12 months on average. In Chennai we've seen like committed occupancy was at 60% in second quarter to 90% in third and 90% in fourth, where the actual occupancy hasn't moved up from, like 3%. Is there? No. The client fit-outs are actually going on as we speak, they should be occupational within this coming quarter, followed by the next quarter. They're taking space in tranches. Now it's 97% left. Okay. The other thing is just there was some exception of INR 1.4 million for this year. I just wanted to check what that amount is. I'm guessing this is a non-cash, so it doesn't have any impact on change of the cash flows. If you can still comment on that. Yeah. That's actually the write-off of the building which is gone under redevelopment. Under the Indian accounting standard, you need to write off the amount because the building is getting demolished. It's just a write-off and it's a non-cash transaction. How was this value in the gross category of the NAV? Was it valued at the same amount? Yeah, yeah. Yeah, obviously that's the reason we are doing the redevelopment. What happens is that the NDCF of the revised, that is the new redeveloped asset is what is considered in the GAV. Right. Okay. Okay. Yeah. Thank you. Thank you. The next question is from the line of Kunal Lakhan from CLSA. Please go ahead. Hi. Hi. Good evening, Vinod and team. Vinod, I know you addressed this question earlier, but just again, I'm trying to, you know, keep it going on this. The whole problem is in, you know, commentary, right, in terms of 11 million sq ft is a very stark number. even on a, you know, all India portfolio, right, of say 663 million sq ft. That's interesting. That's just one occupier, right? What now what I'm trying to understand is that, you know, have you been, you know, having these discussions or have you been getting these indications from, you know, these IT services guys on these lines of like, you know, of, you know, keep adopting this, you know, tier two city strategy or like, you know, hybrid being a very, a large part of their, you know, model essentially going forward. Then going ahead, which maybe gets occupied, you know, by other IT players. Just wanted to, you know, understand your thoughts on this. No, the Kida motherhood statements. I don't know if you remember, some time ago, TCS said 90% would be work from home, and they said 20% will be work from home. I mean, these are news articles which are bringing information about companies who are looking at rendering back space or they're looking at reducing headcount. These are a process of 12-18 months. Some of it is already implemented and done with in the last one year. This is a constant churn with multiple companies. You may have seen Amazon in the last one year gave up between 2 million and 3 million sq ft, 4 million sq ft. Accenture gave up 2 million sq ft. All of these are part and parcel of their business strategies. When business bounces back, they come back and take spaces in half a million and 1 million sq ft really quickly. We've seen that happen on and off across of the last couple of decades of being in this space. We don't really get caught up by all of this. We see what our asset is like, what is the mark-to-market opportunity, where can we place our assets, if at all anything like that happens within our portfolio. Right now, we don't have any such indication, but we are always ready because our portfolio is right up there and there are customers who are looking for space to pick up and they're happy to release. It's part and parcel of business. Sure. Sure. Just on those lines from Dhiren, what is the profile of the customers who are actually, you know, kind of looking to take up more space? You know, just a little question on that end, if you can also like, you know, give some color on, you know, your discussions with, say, GCCs and say, non-GCCs or larger regional IT services companies. How are they thinking about on the office expansion plan? You know, the third-party service providers are taking a lot of space right now because in some way there is a CapEx freeze with the larger GCC, GICs incrementing investments for the short term. At the same time, they want headcount. We are seeing a lot of the third-party service providers, especially in the tech and in the financial services sector, getting additional demand for seats to service. Those players have taken a lot of space in the last couple of quarters, and we continue to see that trend going forward. There are some large tech companies who have been cutting edge tech for 5G and 5G equipment, where they have labs and ecology within India for their global practices. We've seen them grow significantly and continue to ask for more space. There are huge demand coming out of all of these cases, and they are looking for space. They are growing. Obviously, large RFPs are not there. Those large RFPs will probably not be there for the next two, three quarters. We will continue to see demands of a 300,000, 150,000 sq ft on a constant basis. That is really exciting because that's where the churn gets used. When it's 1 million, 2 million sq ft, generally conversations around big REIT. You don't generally cover the profit of speculating commercial leasing space. The smaller demand is really attractive because we have space to offer. Sure. Sure. Just lastly, one quick point. You know, what would be the% of area occupied by IT services companies just excluding the GCC specifically? You're saying third-party services? Yeah. I mean, there are different segments you can call a third party. Essentially, what we would kind of put it on a pie chart, you will see technology and process is almost at 46%. Financial services will be about 18%-19%. You have telecomm and media at about 8%-10%. You have engineering and manufacturing-related tech at 7.5%. You have healthcare and pharma at 5.5%. E-commerce at about 2%. Professional services are about 6%. All of these combinations are working through. In this, if you factor for third party, I mean, let's look at, for example, third-party services being done by LTIMindtree, TCS, Wipro, Infosys. They would probably the non-GCC areas in that sense, the third party, including some of the global players, would be about 50% odd. The GCC would be 50 odd%. Got it. Got it. Thanks so much and all the best. Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Hi. Thank you and good evening, everyone. First question is on the ROFO asset. Looks like the rival project is kind of shelled. It's fully completed, fully leased. Why has sponsor decided not to go ahead with it? I don't think that we just deferred that. He was just waiting for stable, full occupancy of Qualcomm to take place and time to exercise their option for purchase, et cetera. I think this could be very much on the offering in the coming quarters. We are very keen to take this in the lease. It's an absolute, completely great asset. Okay. Sameer, we'll just wait. I know as we had said that we'll also wait for the markets to improve a little before we take that asset. For sure we are very keen to take the asset into the. Absolutely. There's no change there. There's no question. Profit being shared. I'm really confused just because until last two, three, it was under very active evaluation, and now that it's fully leased and completed, now we are kind of, you know, taking some time off, so. Yeah. I think more to do. Yeah, more to do. you know, the market just improving a little for us to get that asset into the portfolio. We're very keen to grab it. Yeah, we are very keen to take it. In fact, there are some more assets in the ROFO which have now been completed and that we will start looking at those as well to be infused at a relevant time. The second question is on the NDCF for 2024. Typically, I mean, you know, if you can just help us on two things. A, the pluses and minuses. I understand NOI would grow and marginal uptick in interest. How does this play out into NDCF? Are there any more pluses and minuses you need to keep in mind? Secondly, in 2023, you got the benefit of INR 120 crores from Khairane proceeds. How do you plan to make up for that in 2024? Yeah. For me, if we don't have too many surprises in the year to come, obviously we are hoping the NOI to see a healthy growth. Some of that NOI obviously will be eaten up by the increase in the interest cost, both on account of the original CapEx. CapEx of course will not affect your NCF, because there has been an increase in cost over the last year. That explains the interest cost as well. Of course second is also because of interest rate. Secondly, we are hoping that in the year to come we would not be having any form of income support. We should be able to manage with the operational cash flow. To that extent, to answer the second part of your question, we may not really need to have another Khairane end of this year. That's broadly how I look at NCF for the next year. Okay. No, that's excellent. It seems we are going to, kind of combine the income support. Yeah. This final question. Vinod, how do you see again design committed occupancy over the next 12 months? The way I see that actually, in the non-SEZ we have hardly any space left. I was wishing we would have got more supply really quickly, which we are pre-forming discussions. I'm hoping whatever churn comes, if it comes, we are able to re-lease it back quickly. Some churn may come, and we're actually waiting for that because we have no real supply in the non-SEZ. Our focus is really to push the SEZ denotification or wherever we are seeing in buildings which we can denotify so that we can bring in that vacancy into use and get that to occupancy. That's the only thing that is kind of dragging us right now. We are seeing demand in those micro markets. Okay. I guess, of the 1.6 million sq ft in SEZ, 20 goes out. Let's keep denotified to 1.2 on a total base of 25 million. Roughly about, you know, mid-90s is where you can potentially move. You know, to each tenant we are 100% already let fully. That's why we are trying to bring the under construction building much more earlier in. In Hyderabad Madhapur, we are almost 95.5% let. I'm hoping there's some churn there, because the rents for the old occupiers are really low and this will become a day-day asset in Hyderabad for us. Whatever churn comes we will be able to market up it really well. Okay, great. Thank you so much. Thank you. The next question is from theTHE line of Satinder Singh Gidde from UAE Investments. Please go ahead. Yes. Thank you for the call. Hey, Vinod, how do we measure the physical occupancy? Because the term finally measures. When you say 50%, how do you define this? There are different measures because there's no straight line metrics. We count cumulatively a headcount per week of the people that came into work. In certain offices it is three days a week, in some offices it's every alternate day. Cumulatively, for example, we have 11 million sq ft in the park. On a thumb rule basis of one in 100, we should have 1.1 lakh people. If there is 66,000 people coming in and out every week, cumulatively, not cumulatively on a weekly basis, that's our occupancy. Okay. Thank you. I had the same, recently trying to compute it. Sunita asked this question earlier. I don't know if we are talking the same metric. That the Square Avenue 98 BKC Connect. This was one of the assets being prepared for acquisition earlier, and this presentation there is no mention of it. Any update on that front? Sorry, we were not able to share you our active works list. I don't know if Sunita's question was of the same asset. There was this mention of The Square Avenue 98 BKC Connect being mentioned as one of the assets being prepared for acquisition. This time it has not been included. Okay. Any reason for it? We were bundling it together, which is why we waited on it. That asset will also get into the portfolio. Okay. Okay. Thank you. What is the value of unit capital that is let? I understand most of the payouts that get paid are in the form of dividend and the balance is interest. No capital is getting paid out. What is the total value of unit capital there in the lease? The total value of unit capital, so when the channel partner obviously INR 16,800 crores was what came in. That was the unit capital. Obviously you would see adjustments to that. I think that may not be too relevant in terms of measuring, especially if you're looking at the distribution. Okay. How should one look at the future capital structure which now there is a little bit clarity on this part, that the repatriation of capital with tax credits winds down to zero? How does one look at the future capital structure planning when you make future acquisitions because this becomes a tool for an efficient development? Clearly you're right. The much-awaited clarity on this feature actually emerged and we are thankful to the government for providing it. As of today, we are not doing any of that. As I said earlier in the call that it usually depends upon the capital structure. If there is, you know, a need arising for which we need to do a similar structure, we would do. Now, of course, it's pretty efficient from a tax perspective also with this amendment. It'll all depend on how our capital structure emerges in the years to come. Our acquisitions, when the acquisitions happen, with what debt profile do those acquisitions come in. You know, what kind of efficiencies which we can bring into the capital structure. I think it'll be a combination of various things. you know, as I said, in the immediate future, we see that the maximum payout will continue to be by way of dividend itself, because we are entities which are generating a good amount of distribution through dividends. y on the NDCF. Preeti, there, we have 275 crores of CapEx during this quarter. We had 20 crores of positive working capital flow also. But we've drawn down 161 crores of net debt. So, I hope that some of this drawdown is not going to not going towards to fulfill the distributions because actually the CapEx was 235, and we had 20 crores of support from working capital this year, this quarter. So against 215, we've drawn down 61. Although in this case we reached 10 crores at the existing level, release level because we paid out less than what we got from this CE (Cash Equivalents) See that more subject road of gap. What happens is that, generally working capital is a number which keeps changing quarter on quarter. You will see some quarters where the working capital is high, some quarters where the working capital is low. To that extent, wherever we have a little bit of shortfall, that's where you will see this net debt getting up. That's the interim, I would say the interim NDCF that we are bridging. As I said to Sameer also that in the year to come, we are hopeful that we should not have this going forward, but we of course have to see if there are no further surprises in the years to come. I mean, we should have very minimal of nothing working. Of course today will continue to be quarter on quarter working capital adjustments which will come because that's again something which depends on how the cash flows move every quarter. Overall in the year we should not expect much of this. Okay. Thank you. Thank you very much. Also Preeti, thank you very much. Thank you. Thank you. As there are no further questions, on behalf of Mindspace Business Parks REIT please conclude this conference. Thank you for joining us and you may now disconnect the line.