ICICI Securities is bullish on Mindspace Business Parks REIT recommended buy rating on the stock with a target price of Rs 358 in its research report dated September 14, 2020.
ICICI Securities research report on Mindspace Business Parks REIT
We initiate coverage on Mindspace Business Parks REIT with a BUY rating based on March 2022 DCF based target price of Rs358/unit. The REIT has a stabilised rentyielding office portfolio spread across Hyderabad, Mumbai Metropolitan Region, Pune and Chennai. With 92% committed occupancy and in-place rent of just Rs52/psf/month, we like the company given 16% NOI CAGR over FY20-23E, a resilient leasing cycle for office assets in India’s tier I cities and low leverage of 0.2x net debt/equity which leaves headroom for injection of new assets in the REIT portfolio.
At CMP of Rs302, we estimate NDCF yield of ~7% over FY22-23E of which over 90% is estimated to consist of tax-free dividends. Key risk to our thesis is the large-scale adoption of Work-from-Home by occupiers over the long term.
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