Good day, and welcome to the Mindspace REIT conference call for Commerzone Raidurg acquisition. As a reminder, all participant lines will be in the listen-only mode, and there'll 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 and then zero on your touch-tone telephone. I now hand the conference over to Mr. Nitin Garewal. Thank you, and over to you, sir. Thank you. Good evening, everyone, and thanks for joining us for this call to discuss the acquisition of Commerzone Raidurg in Hyderabad. You may wish to refer to the presentation and press release that has been uploaded in the investor relations section of our website. We would like to highlight that the management may make certain statements that may be forward-looking in nature. Please be advised that our actual results may differ materially from these statements. We do not guarantee these statements or results and are not obliged to update them at any point of time. Joining me today are Ramesh Nair, our CEO, and Preeti Chheda, our CFO. They will run you through the details of the acquisition, after which we'll open the floor to the questions. Over to you, Ramesh. Thanks, Nitin. Good evening, everyone. Thank you for joining the call today. Very happy to announce an important milestone for us. Our board of directors has approved this acquisition, subject to unit holder approval. This asset is located in Madhapur, Hyderabad. The overall project is a 2.8 million sq ft office park, of which 1.82 million sq ft is housed in the SPV being acquired. This is very close to our existing Mindspace Madhapur campus. Some of you may remember when we had our analyst meet in Hyderabad. We had the presentations in this building where we had the JLL, CBRE, the heads coming and presenting about the market. So this is the same asset. A few things I would like to highlight are: one, this further strengthens our portfolio. Two, this is a top-class asset in a prime CBD location. The word CBD here is important. We believe this is a CBD location. Incidentally, post our analyst meet, which we had here, companies like JLL and CBRE have started calling Madhapur as the prime CBD within the Hyderabad overall commercial market. I truly believe that this creates long-term value for us. I also truly believe this enhances our market leadership in Hyderabad. Today, with this acquisition, we touched 15 million sq ft in Hyderabad. This acquisition also seamlessly aligns with our REIT's growth strategy. We are quite excited about the potential this asset brings and look forward to leveraging that. I wanted to talk a little bit more about Hyderabad's Madhapur market. Today, I believe it is the most ideal location for an acquisition, and the reasons I would attribute to that would be, one, the asset offers a significant leasable area of 1.82 million sq ft. The entire asset is leased to Qualcomm, ensuring a consistent, stable, reliable income stream for the REIT. This acquisition boosts our footprint in Hyderabad, taking our portfolio size to approximately 15 million sq ft, like I mentioned earlier. Rent is INR 69 per sq ft per month, which means higher mark-to-market potential. This micro-market has rentals already north of INR 80, INR 85. Some smaller deals, like 50,000 sq ft deals, have also started happening at INR 90 in this micro-market. This asset is located in one of the country's most prestigious business districts. Over the past five years, Madhapur has accounted for approximately 70% of all absorption in Hyderabad. Also, over the last five years, Madhapur achieved the second-highest aggregate net absorption amongst any micro-market in the country. This is, in the country, the second-highest aggregate net absorption. In the fiscal year 2024, Madhapur recorded an impressive absorption of close to 7 million sq ft again, reflecting its dynamic commercial activity. As of December 2024, vacancy levels are at single digit. Again, all the institutional developers, whether it's SAS, Salarpuria, RMZ, all of us have negligible to single-digit vacancy in this market. Again, it has the highest rental rates in the Hyderabad market and the highest net absorption share, like I mentioned earlier. Overall, this highlights our strategy to invest in quality assets. Some of you who've seen it, some of you visited Altimu s for the last analyst meet, which we had a few months back. The kind of lobbies we have in the Qualcomm, that this Raidurg asset would be comparable to the kind of finishes you see in Altimus, for those of you who haven't seen this Hyderabad asset. Acquisition price is INR 2,038 crore, INR 2,038 crore. This is a 7.5% discount to the average of two independent valuations. This will add INR 167 crore, INR 167 crore of NOI from a FY 2025 NOI on a pro forma basis, implying a growth of 8.2% to our NOI. At around INR 11,200 per sq ft of capital value, this marquee asset adds immense value to our REIT portfolio. This acquisition adds INR 3 per unit to our NAV. This acquisition is DPU accretive, with estimated distribution yield of 7.2%, which is higher than our current distribution yield. Given the mark-to-market potential, this asset is expected to generate healthy long-term returns for the unit holders. LTV ratio as of December 31st, 2024, after considering this acquisition, shall increase to 25.3%. This still leaves us with enough headroom to accommodate future growth in the portfolio. Also, as mentioned earlier, the board of Mindspace REIT has approved the acquisition and the preferential issue of up to INR 613 crore, INR 613 crore, subject to unit holder approval. In conclusion, we are dedicated to consistently delivering value, and this acquisition strengthens our portfolio with a high-quality asset. This addition not only enhances our income and distribution growth, but also reinforces long-term portfolio stability and drives sustained value creation. Thank you for your continued support. We look forward to achieving more milestones together with all of you. Also, do we open for questions? Yes. Sure. Give me a moment. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, if you wish to ask a question, you may press star and one on your touch-tone telephone. We have the first question from the line of Puneet from HSBC. Please go ahead. Yeah, thank you so much for the opportunity. My first question is, what is the need for rental support on this acquisition? From an income support point of view, this is just two, three points to be mentioned here. Income support is INR 15.6 crore, INR 156 million. This is the largest deal done during COVID time, and some of our IPC friends also tell this is probably the largest deal ever done in Hyderabad. Back then, during COVID, the peak of COVID, this was leased at INR 60 per sq ft per month, which was below the market. But June, July, August 2020, we didn't know where the world was heading back then, and this is a big deal. There was RMZ, there was Salarpuria Sattva, everybody competing for this deal. The entire 1.8 million sq ft of area is escalating to INR 69 per sq ft from January 2026. Basically, to avoid yield dilution till the escalation date, we have negotiated INR 15 crore of support to bridge this difference between INR 60 and INR 69. Basically, around nine-10 months of that additional income support. I've been on the other side doing some of these deals, which we believe these days is common practice of giving rental support for six-12 months in deals of this value. Understood. And you also, so far, what we see is that 17 floors are operational. 7th- 20th floor rent commences from 1st March. Does INR 16 million stabilized rentals include all that and the rent support, or is it excluding rent support also? No, it includes that. This was a hard option which they had out of 18 lakh sq ft. Around 2.5 lakh sq ft was the hard option, and this includes that. So overall, if you look at the INR 167 crore, around the INR 150 crore is the rent, and the balance, 20%, nearly INR 20- odd crore is the margins of our asset management division. Okay. INR 150 crore is rent. Okay. Yes. INR 150 crore rent, INR 156 crore is rental support, right? Yeah. INR 15 crore is rental support. INR 15 crore. Yeah. Sorry. INR 15 crore is rental support. And then if I were to take INR 166 crore, then some bit of support. Okay. And I also see that there is a ROFR which has been given to Qualcomm. When does that become effective? That is only if we decide to exit as a REIT, this asset. That's the only time they get a chance to buy. Otherwise, not. If we are not exiting, then the ROFR doesn't satisfy at all. Understood. Very helpful. And also, if you can comment a bit on out of the 2.8 million, 0.98 is with landowners, presumably in the same complex. Who are the other tenants there? Those are very good tenants there. HCLTech is one of the tenants. One thing I remember, the last deal which happened recently, which was the last deal happened around two months back, they have crossed rentals of close to INR 83-INR 84 rental. This again reflects back to what I said. We have underrated. We've given it to Qualcomm, which is a $190 billion company. There are people like BlackBerry has taken space here. Skootr, HCLTech, Synechron is another company. Zensar Technologies is another company which has taken space. All these guys have 91springboard has taken space. So those are the tenants and getting rentals of it's 100% leased. The landlord's portion is 100% leased. And for us, it's a good indicator that today in our park next to us, what we have built for the landlord, we're getting those kind of INR 83-INR 84 kind of rentals. Understood. And for Qualcomm, what is the rent-free period and when does the lease expire? I presume 12 years when you say, well, that's the lease period remaining. It's a 15-year deal which we signed with Qualcomm. See, one thing which is very important here is this is probably the second biggest center for Qualcomm outside their HQ in the U.S. And they're doing some of the biggest R&D work here. This is not some small GCC kind of back office kind of function there. They're doing very high-end R&D. Last night, I was checking with the fit-outs team in terms of fit-outs and technology and all the we would have built this back then at INR 4,000 per sq ft. What we hear, what Qualcomm has invested in the asset is close to INR 11,000, including technology, hardware, furniture, everything put together. This is a massive big campus for them. They were always in the market for a very long time for buying land and building their own campus. We convinced them on the leasing model, and then they took this space with us. Understood. That's very helpful. Thank you so much and all the best. Thank you. We have the next question from the line of Adhidev Chattopadhyay from ICICI Securities. Please go ahead. Yeah. Good evening. Thank you for the opportunity. Just first question is on the CAM and maintenance for the asset overall. So in our NOI and whatever other NDC projections, could you just please explain how the CAM would work? Is it for the entire 2.8 million sq ft or only for the proportionate area? And who would be managing the facility management over there? That is the first question. So typically in our CAM business, we have a fantastic CAM team, what we call that company, is called Camplus. And we make decent margins in that. Currently, the CAM margins, what we charge all our tenants in our parks is around INR 15.5 per sq ft per month is what we charge. That INR 15.5 typically is broken into three components: basic maintenance, park maintenance, and all the AMCs which we have. So typically 10 + 11 + 2 + 2, that's the model which we charge. We make our contracts with our tenants are typically actual +20%, and we show them our audited financials. The CAM margin in this case is collected on 2.8 million sq ft, which because we also manage the landlord's area in this case. But our contracts with all our tenants and the landlord's tenants is cost + 20%, which the CAMs escalate every year because we have to increase the salaries of staff. Sometimes costs go up, common areas, power goes up. So that's the overall CAM treatment in this case. Okay. So just to again reiterate, so the PR operating lease rate will come on the 1.8 million sq ft, but my CAM revenue will be for the entire 2.8 million sq ft. Is that a correct understanding? That's right. That's right. Okay, and just second part on the funding, could you just please explain the terms of the debt we would have tied up, fixed, floating, and what are the broader terms of this loan? So we are going to refinance this loan. Currently, we have an LRD facility sitting at the SPV, but the plan is to move the debt to the REIT and refinance the one which is sitting at the SPV level. There is a little bit of group funding also which has happened, KRC funding, which we will repay immediately after the acquisition is completed. Okay. So excluding the preferential amount, we are looking to raise the balance in the acquisition price registered against the debt? No. So the entire equity value, which is 603, that's going to be fully through swap. We are not doing any cash acquisition. Okay. No cash acquisition. Okay. Okay. Fine. Yeah. Thank you. That's good. Thank you. Participants who wish to ask a question may press star and one on your touch-tone telephone. We have the next question from the line of Parvez Qazi from Nuvama Group. Please go ahead. Hi. Good evening. Thanks for taking my question. So two questions from my side. First, how do we see the timeline for this acquisition? Will this get consolidated from Q4 or only from Q1? And secondly, there seems to be some pending CapEx of INR 20 crore-INR 21 crore. So what does that relate to? Ladies and gentlemen, the line for the management has just disconnected. Please stay connected. Ladies and gentlemen, we have the management back on. Mr. Parvez, you can go ahead with your question again. Yeah. Hi. So two questions from my side. First, how do we see the timeline for this acquisition? Will this get consolidated from Q4 or only Q1 of next fiscal? And the second is there seems to be some pending CapEx of, I think, INR 21- odd crore. So what does that relate to? Yeah. So Parvez, my apologies. We just got dropped off. So on our first question, in terms of timelines, we are seeking unit holder approval because it's a preferential issuance. So we need to go to the unit holders. The AGM date is 28th of February. And after that, within 15 odd days, we need to close. Of course, because this is a SEZ, we also need to seek SEZ approval. So if we are getting the SEZ approval within those timelines, then the timelines would be about 45 days from now. And yeah, in case if the SEZ approval takes a little longer, then of course it moves beyond that. Otherwise, 45 days is what we are looking at. And if it's 45 days, then it's but obvious March financials will have this asset consolidated. The only thing is if it moves beyond 31st of March because of the SEZ approval, then of course not, but we are hoping that we should be able to close before 31st March, and in which case, to answer your question, we will consolidate this. Sure. And about the CapEx part? Yeah. So the CapEx is essentially payments which have not happened for the built area. So generally what happens is whenever we are paying through the vendors, we retain some portion of the final billing. Generally it's to the tune of, say, 10%. So these are those retentions which will happen subsequently. So we wait. It's a DLP period. If there is any defect which crops up during the DLP period, to just safeguard against that, we retain some portion of the billing and we release it after the DLP period. Got it. Sure. Thanks, and all the best of luck. Thank you. Do you move on to the next question, sir? Can the management hear us? Yeah. Yeah. Please go ahead. Sure. Thank you. Participants who wish to ask a question may press star and one on your touch-tone telephone. Participants who wish to ask a question may press star and one on your touch-tone telephone. As we have no further questions, we would now conclude the conference. Ladies and gentlemen, thank you for joining us, and you may now disconnect your lines. Thank you, everyone. Thank you.