Mindspace Reit Acquires Hyderabad's Q-City Office Asset for ₹512 Crore

Mindspace Reit acquires Hyderabad's Q-City office asset for ₹512 crore at an 11.6% discount. The 0.81 million sq ft property adds ₹53.5 crore to the Reit's net operating income and takes its portfolio to 37.9 million sq ft. The deal is funded via debt and is the Reit's first third-party asset acquisition outside its portfolio parks.

Mindspace Business Parks Real Estate Investment Trust (REIT) has expanded its portfolio by acquiring Q-City, a commercial property in Hyderabad, for Rs 512 crore. This deal represents Mindspace REIT's first third-party acquisition outside its existing parks [1].

The acquisition involves buying 100% equity in Mack Soft Tech (MSTPL), the owner of Q-City, through Horizonview Properties, a special purpose vehicle asset of Mindspace REIT. The property, located in Hyderabad's Financial District, spans 6 acres and has a leasable area of 810,000 sq ft. The asset will be rebranded as 'The Square, 110 Financial District' [1].

The transaction was completed at an 11.6% discount to an independent valuation, resulting in a capital value of Rs 6,130 per sq ft. The acquisition is expected to add Rs 53.5 crore to Mindspace REIT's net operating income on a stabilized basis, boosting its 2024-25 earnings by 2.6% [1].

Post-acquisition, Mindspace REIT's Hyderabad portfolio will grow to over 16 million sq ft, and its overall portfolio will increase from 37.1 million sq ft to 37.9 million sq ft. The Gross Asset Value will rise to Rs 37,143 crore from Rs 36,647 crore, while the Loan-to-Value (LTV) ratio will edge up to 25.1% from 24.3%. The Net Asset Value will also increase by Rs 1.8 per unit [1].

The acquisition aligns with Mindspace REIT's strategy of disciplined expansion within its core markets. Hyderabad is one of India's most coveted commercial markets, characterized by high GCC demand, minimal institutional-grade vacancy, and strong tenant preference. The city hosts over 350 global capability centers and robust demand from tech and BFSI occupiers, positioning Mindspace REIT to benefit from the city's ongoing office space expansion westward [1].

References:
[1] https://m.economictimes.com/industry/services/property-/-cstruction/mindspace-reit-make-first-third-party-acquisition-with-rs-512-cr-deal-in-hyderabad/articleshow/122871834.cms
[2] https://www.business-standard.com/companies/news/mindspace-reit-buys-q-city-hyderabad-for-rs-512-cr-to-expand-portfolio-125072400341_1.html