Mindspace REIT acquires Chennai office asset for ₹2,541 crore

Mindspace Business Parks REIT (BSE: 543217 | NSE: MINDSPACE) has acquired 100% equity shareholding in Sycamore Properties Private Limited and Content Properties Private Limited, totaling approximately 26 lakh sq ft at Commerzone Pallikaranai on the Pallavaram-Thoraipakkam Road (PTR) in Chennai, for ₹2,541 crore. Mindspace Business Parks REIT’s Board of Managers has approved a transaction involving a preferential issue of up to ₹675 crore, subject to unitholder and regulatory approval.

Portfolio Expansion

This is Mindspace REIT’s second acquisition in Chennai since its listing, and the fifth asset acquisition from its sponsor pipeline. The sponsor is K Raheja Corp. This acquisition brings total expansions since listing to about 66 lakh sq ft and ₹8,800 crore in Gross Asset Value (GAV). The REIT’s overall leasable portfolio will expand from 390 lakh sq ft to 416 lakh sq ft, with a GAV of around ₹46,760 crore, up from ₹44,130 crore. Chennai’s part of the portfolio rises from around 3% to about 9% by area.

The purchasing price of ₹2,541 crore is a 3.4% decrease from the average of two independent valuations. The preferential issue of units costs ₹484.89 per unit. Proforma Net Operating Income (NOI) growth is expected at 10.2%, with NAV accretion of around ₹2.2/unit. The Loan-to-Value (LTV) ratio will rise slightly from around 25.6% to 28.0%.

Asset Overview

Commerzone Pallikaranai is a Grade-A office campus encompassing 12.4 acres on PTR with IGBC Platinum and WELL Platinum certifications. It presently has around 14 lakh sq ft of completed office space across two blocks, with the remaining roughly 12 lakh sq ft under development, with delivery scheduled for March 2027. The completed portfolio’s committed occupancy rate is roughly 70%. In-place rent is around ₹63 per sq ft per month, with recent deals reaching ₹85 per sq ft. Shell, a Fortune Global 500 business, occupies about 55% of the leased space.

Ramesh Nair, MD and CEO of Mindspace REIT, stated that Commerzone Pallikaranai was a strategic addition that strengthened the REIT’s footprint in Chennai, one of India’s office markets with the lowest vacancy rate. He stated that PTR was a well-established office corridor where demand continued to outperform supply, and that the acquisition would position the REIT to capture future leasing demand, rental upside, and long-term value for unit holders.