Sharad Mittal of Motilal Oswal Real Estate Fund feels from Mindspace, investors can earn a return of 11-12 percent of which 7-8 percent which accrues from rental yield is as stable as debt.
K Raheja Corp and Blackstone-backed Mindspace Business Parks REIT is set to debut on bourses on August 7 after receiving good response from institutional as well as non-institutional investors.
The final issue price has been fixed at Rs 275 per share, the upper end of price band of Rs 274-275.
This would be the second REIT to list on the exchanges, after Embassy Office Parks REIT which was listed in March 2019 following fund raising of Rs 4,750 crore via IPO.
The public issue of Rs 4,500-crore by Mindspace Business Parks REIT IPO consisted a fresh issue of Rs 1,000 crore and offer for sale of Rs 3,500 crore, which was subscribed 13 times during July 27-29, 2020.
The portion set aside for institutional investors witnessed a subscription of 10.61 times and that of non-institutional investors 15.77 times.
Sharad Mittal, CEO at Motilal Oswal Real Estate Fund feels from Mindspace, investors can earn a return of 11-12 percent of which 7-8 percent which accrues from rental yield is as stable as debt. "Combining the stability of debt and upside of equity, REITs are a must-have in any investor portfolio."
Mindspace REIT is the owner of a high-quality office portfolio in four key markets in India — Mumbai, Hyderabad, Pune and Chennai - that serves as essential corporate infrastructure to multinational tenants and has significant embedded growth prospects. Mindspace portfolio consists of five integrated business parks with superior infrastructure and amenities and five quality independent offices aggregating to 29.5 million square feet of total leasable area.
Its portfolio assets are well diversified across 172 tenants with no single tenant contributing more than 7.7 percent of the Gross Contracted Rentals. Approximately 84.9 percent of the Gross Contracted Rentals were derived from leading multinational corporations and approximately 39.4 percent from Fortune 500 companies (as on March 31, 2020).Mindspace has a high-quality tenant base with 92.0 percent Committed Occupancy along with long-term contracted rentals which provide long-term visibility of revenue.