Mindspace Business Parks REIT ($MINDSPACE)

Ladies and gentlemen, good day, and welcome to Chennai Asset's Acquisition Update by Mindspace Business Parks REIT. [Operator Instructions] Please note that this conference is being recorded. With that, I hand over the call to Mr. Shravan Kailasa from Mindspace Business Parks REIT. Thank you, and over to you.

Good evening, everyone, and thanks for joining us for this call to discuss the acquisition of the 2 assets the Cariparma to Riaan Corridor. You may wish to refer to the presentations and press releases that have been uploaded in the Investor Relations section of our website. We will try to highlight that the management may make certain statements that may be forward-looking in each -- these be advised that the actual performance may peril for these games. We are not guarantee these statements or results and are not obliged to update them at any point of time. Joining the call today are Ramesh Nair, Preeti Chheda our CEO P.T. Cara, our CFO; and Govardhan Gedela, our Head of Corporate Finance. Ramesh will run you through the details of the acquisitions, after which, we will open the floor to the questions. Over to you, Ramesh.

Thank you, Shaun. Good evening, everyone, and thank you for joining us on this call today. We are very pleased to announce the addition of 2 high-quality institutional real assets in Chennai to our portfolio. The acquisitions comprised of international Act, Radial wrote a 2P asset developed by CapitaLand. And second, the Bambanani, a well and AGDC platinum-certified campus developed by range. Together, these 2 assets at a combined footprint of 5.2 million square feet, taking our portfolio in Chennai to 6.3 million square feet. -- making Mindspace REIT 1 of the largest institutional office owner in care. Both assets are located along the Pallavaram corridor, which is amongst the fastest-growing office markets in Chennai. The simultaneous acquisition of 2 marquee campuses of 2.6 million square feet each creates a unique opportunity to drive synergies along the PDR product. Further, the 2 assets have enabled us to meaningfully scale our presence in this -- with this, the contribution of the overall portfolio grows from 3% Chennai's contribution goes from 3% to 14% in terms of the orders. This not only strengthens our presence in our high-growth market but also enhances geographic diversification in the cool. Chennai's office market is currently operating at an exceptionally tight vacancy of just 7%, the lowest amongst all major metros in the country. This supply-constrained environment gives us a strong leasing and pricing advantage. We have consciously planned the duals strategy to unlock value through 2 large office properties located just 10 minutes from each other, roughly 4 kilometers to use. We had originally planned to announce both these acquisitions together before the end of March. But the time line for the second acquisition extended marginally beginning to the announcement, SD engine. The combined acquisition consideration for both the assets is INR 5,540 crores, INR 3,000 crores for and INR 2,540 crores for comes Pagar. The acquisitions are being funded through a prudent mix of debt and equity, including a presidential issue of units to the sponsor. For IBC, we are pleased to partner with 360 One. India is reading well the asset manager. Under this structure, Mindspace REIT will require a majority 51% stake and the remaining 49% was being held by 360 One. This is an all-cash deal and our investment will be funded rooted. For Commercial and, we'll issue units of up to INR 675 crores to the sponsor at a price of approximately INR 4.85 per on. The preferential issue was subject to unit for the group. Together, these assets enhance our ability to offer occupies flexibility for expansion or consolidation within the same model a factor that's increasingly important for large global tenants. Over time, this clustering of CCCs and the talent pool will drive higher tenant stickiness and rental upside. Building on our track record, Coleson Barricade is our fifth acquisition from strong sponsor pipeline, while IDC marks our second sizable third-party acquisition within the last 12 months. With the combined GAV of nearly INR 5,500 crores, these are the largest acquisitions in our journey tilt. With these acquisitions, we have added about 9.1 million square feet to the portfolio. translating to INR 10,600 crores of incremental GM. This is a great reflection of how we consistently grow our portfolio in a disciplined and value-accretive manner. Just as importantly, acquisitions remain well diversified across all the core cities have been operated. So we've done acquisitions in Mumbai. Our sponsor pipeline continues to provide visibility for future growth, while we remain equally well positioned to evaluate third-party opportunities. Let me now walk you through the assets, starting with ITBC on radio. ITBC is a 2.6 million square feet low-carbon propoffice campus developed by Capital and for Singapore. It is a new, brand-new institutional valet low-rise campus. -- best-in-class design best-in-class sustainability credentials. The asset is anchored by global capability centers or some of the largest corporations globally. One of the world's largest retailer has a GCC, along with marquee multinational tens. Interestingly, 97% of the area has been led to blue chip menses. It is home to a large U.S.-based financial services firm leading European renewal energy solution provider among us. Some property features arguably the best arm in the country. the 10 floor high central Atrium. It is design specs, which are truly front-office material. Both the towers offer large flow gates providing scalability for large GCCs and Indian countries. This is designed as India's first triple net zero business park. It is a next-generation sustainable office gap is targeting net sale outcomes across carbon emissions, water usage and waste. As also holds GBC Platinum and were precertification. From a leasing standpoint, Tower 1 is 87% occupied. -- while Tower, which was just completed in September 25, stands at 28% of sits. The in-place rent in this property is around 72 per loan. With recent deals at 85 per month along this corridor, we see a clear opportunity to capture demand at these levels for a -- at INR 3,000 crore, this is the largest external acquisition since our listing, and it is expected to deliver an NOI growth of 9.5% on our FY '26 pro forma basis. on a 100% consolidated basis. We share acquired 51% staying in the asset in partnership with 360 One, which will hold the remaining 49% stake. We are very pleased to partner with like-minded institutions with strong alignment with strong alignment towards valuation. For conditional acquisition, we will remind the SNS bond radio by mine space weed -- now let's turn the call on Malika. It is located approximately 10 minutes away from ITPC along the PDR corridor, like I mentioned. Together, ITPC collars don't provide meaningful institutional rates apply in the micro market over the next 2 years. Commerzone comprises 3 blocks, 1.4 million square completad outstock and 2 million square feet of underinsured. Block 2 was completed in 2023. Block 3 was recently completed in None 2025, with lock once said to be completed by March '27. The various development profile again aligns well with our leasing strategy going forward. Comiteoccupancy currently stands at 83% for Block 2. Block 3, which was recently completed in November 2025 is already 58% let -- we are confident of easing the balance space in both these lots over the next 6 to 9 months. BlockII is predominantly leased to share and accounts for 57% of the lease portion of the caps. This deal also stands out as one of the largest real estate transactions in Chennai in the recent years. Other market occupiers include American megatrends and a Big 4 consulting media among us. The in-place rent on this property is 63 per foot again, with healthy traction in the micro market, the deals being quoted at 85 square foot per month has ample room or mark-to-market team. We are acquiring the asset for INR 2,540 crores at a 3.4% discount with the average of 2 independent valuations. The acquisition is expected to deliver NOI growth of 10.2%. -- on FY '26 pro forma basis. The deal is NAV accretive delivering an estimated uplift of INR 2.2 per unit, enhancing overall unit holder bank. Further, in negotiated and income 49 crores with the sellers still rent balances fully for over bids, which means both these buildings are generating income full of FY '27. As a result, the DB is accreted from year -- now let's talk a little bit about the location of these assets. The Palabra Therapak role of media is also commonly called as the radial group, the widest or of Chennai 200 feet -- the road connects 2 growth corridors, OM and GST Road folding a critically east-west antiinto the entity. It offers excellent guarantee to the home IT corridor as well as Chennai International and domestic airports. All of this are located approximately 15 to 20 minutes away from each. Metro corridor pie, which is scheduled by option next financial year, runs through the media world. The metros in close proximity to the assets further enhancing care. Talking about connectivity in the social intra -- there are a number of hotels like the Westin and 4 points in the larger airport hotel Cyclin Finan Adison BNB, numerous residential properties around the catchment, leading national developers that shows all are developing residential projects around these parks. So also a lot of expat housing in ECR senior executive housing in Adabas time, all residential areas of no. Let's talk a little bit about the Chennai market, Chennai 1 of the strongest performing well diversified markets. There's a lot of demand coming from technology, BFSI, manufacturing, engineering, R&D and other sectors. There's been a major beneficiary of some of the intra challenges that Bangalore has been faced. Chennai as a whole has a vacancy only 7% versus the country average of 15% one interesting aspect we noticed was Chennai as net absorption has accelerated in the recent years with an average of 5.7 million square feet between '23 and '25 in versus 2.5 million square feet on an average between 2016 and 2022. This makes Chennai 1 of the fastest-growing markets today in India. Happy to announce that the lease acquisition of these assets, we ran in top to among Chennai's largest all these asset roles. Now let's talk a little bit about that, rather than Sotera. -- or Zone 1 is expected to see no new rating institute supply until 2023. This will definitely create a supply market. This is redirected to our one, occupier demand towards the PTR corridor, which suddenly has started clocking 2 million square get net absorption, which was seen in 2025. This is being driven by a maturing ecosystem and available to high-quality institutional assets on this quarter. Over the next 2 years, the suberimmediately leasable institutional-grade supply to EDR is high country largely limited to ITPC and comes Paline, the 2 assets we just acquired. The other upcoming Salaam institutional developers in the area is largely pre-let tightening availability and highlights the tacit value of space in ITPC and comes. PTI again almost comparable asset quality, but a competitive rental of INR 85 to INR 90 per square foot. -- versus 1.20 to 1.40 per square foot in Ormat's own one. This creates a clear and sustainable pricing advantage for media, particularly for institutional landlords. Rentals around media have grown at a CAGR of around 8.6% between '21 and '25, making it the fastest depreciating office submarket in Chennai and 1 of the fastest in the country. Let's look at the financial and portfolio impact. The when acquisitions are being completed at a total gross acquisition price of INR 5,540 crores, which is at a 2.6% discount to the independent valuation. 51% stake of ITBC at INR 1,530 crores to the total value of the deal being INR 3,000 crores, a 2% discounting depending vision. The implied NOI yield on this asset 7.7% on a stabilized basis. In Commerz on Public 2 and 3, the completed assets have estimated yields of 7.3% and 7.7% respectively. Shares in lock during the Boetra is significantly underrated compared to today's market rates. There is an intrinsic value due to embed and mark-to-market potential. Block 1 channel completion generated an estimated yield of 9.1% on stabilized basis. Once all the lots are stabilized, the yield on the mature asset is estimated at 8.3%. On a pro forma basis, all the transactions on a stabilized basis, like NOI by 15% over FY '26 number. Corfo gross asset value moves from INR 441 billion to 483 million. Post acquisition, the Linpac REIT portfolio expands to 44.2 million square feet, 1 of the largest in the world. Portfolio got 30.3% from 25.6% based on GAV of REIT as of September '25. Please note that this will undergo a change once the JV is updated by the value of March. -- and -- these acquisitions reinforce our conviction in Chennai high-growth ED corridor. India's most resilient commercial market with the lowest vacancy and on top 6 metro cities. -- with ITBC and comes Palkane, become the second large archaea 6.3 million square feet footprint, growing our channel exposure from 3% to 14% of our portfolio. These assets enhance our income quality offering compelling rental relating potential and position us to capture this slower demand from Omar Banco with rising global demand for high-quality sustainable office space, Mindspace REIT remains uniquely positioned for the future. We look forward to delivering many more milestones to Bill, and we take Harjit our mantra of building Glad workspaces while ranimizing unit order value. Thank you all.

[Operator Instructions] We'll take your first question from Girish Shadri of Avendus Spok. Girish, please unmute your microphone. Please go ahead.

And congratulations on the transaction. So to large transactions within a span 2 weeks is a strong statement of the NA market. So my first question is across both these assets. We see that you have a meaningful vacancy to fill, right? So where your committed occupancy in ITPC is around 28% and also in the commerce zone, you have a bit of vacancy to fill up price. So how should we look at the stabilization, right, from a time line point of view? What Are the -- what's the pipeline? So that's my first question.

Great question, Marie, this is something we've been really studying over the last 3, 4 months. And that's the reason we decided to buy 2 assets. The biggest competitor of Prepares, the Omar Phase I, all is driven to 3 zones. The interesting aspect of OMA Phase 1 is -- there's a pan India developer today was quoting 150 willing to do a deal at 130, 135. And this up is going to come again only around 2028. Secondly, there is another bank India developer who's quoting 130 in that market, but that's not even off the ground. That's going to take something like 3 years to comment on about -- there are 2 or 3 other buildings, which have touched 110, 120, some very nice buildings on all our . But again, all these buildings are like 97%, 98%. So -- these are older but getting that kind of rent. So when we really look at in a market like Chennai, which is already seeing a 5.5 million, 6 million square in animal net demand, which is expected to grow -- and you look at other coating corridors like the Madar mine space where we have a Mindspace Matharu, vacancy levels -- we feel Chennai PD would not only see spillover demand from Olman, existing demand, like I said, 2 million, 2.5 million square petroemand just last year in the market, plus below coming from markets like Hyderabad, -- what we've seen in the companies is when companies decide to grow, they have to go just because a corridor or a city doesn't offer space, they're on stock going grow -- they will go to the city, they have go to the micro market where there is space available. So a lot of time was spent starting, Girish. -- every single building in this micro market, we looked at what is the institutional supply -- all of you know that all the IBCs typically would recommend only institutional supply to the landlords, we studied all that. There is some subliminal lakh, INR 2 lakh kind of sub like coming in this card -- but meaningfully, they wouldn't compete with institutional-grade supply. And the other institutional supply, which is available on this is more or less start again by a good institutional reit which again shows that there is headroom for demand in this -- so very, very deep analysis we have done, maybe we've done -- your question is basically retain.

Okay. Great. Great. In terms of, let's say, the converting the pipeline, so my thing is that we just wanted to assess from now to stabilization phase, how should we look at the time lines? Because you said NOI accretion of 15%. So by when can this be achieved?

So the thing is in Palca, we have around 4 lakh were feet of ready space, which is vacant. And in capital, and we have around 1 million square feet, which is vacant -- we are confident this approximately 1.4 million square feet. We'll get leased definitely in this financial year. Like I said, we just need to capture 1.5 million square feet demand from 6 million square feet market that absolutely no institutional supply coming in the next 1 month. So the time lines of filling out both these towers of company and buildings is less than a year.

Great. And in terms of DPU attrition or, let's say, how should we see in the very near to medium term? So because the overall stabilization phase might take 1 to 2 years, right? So how should we look at BPO in the near to medium term? So.

I think the way you should look at is in the next 12 to 18 months at tonight we will fill out these patients. So there will be a marginal dilution -- but in your overall scheme of taxes on the larger portfolio level, I don't think in tee of any material positons. And as again, it said in 18 months once we turn out these bases and obviously, we will start generating rent project. then you should not have any tension on the. So -- but I think what is critical is that these are assets which will because you have some online to have 1 building under construction. So from an IRR perspective, actually will help us be a botanic as well as the NOI growth going forward. So that's how we look at it, a small yield dilution in the entire period, I hope in a much of. It's very good to be very negligible in the overall.

Great. Great. That's clear. And just 1 last question. On the ITPC structure of 51-49 with 360 One. So -- in terms of -- you have anything to share on the control over leasing and rent ization and also anything on the exit because ultimately, they are -- so any pre-agreed valuations or -- how should we look at that?

So the entire property management will continue to be with the manager. As is the case with all the other net assets and I'll give to ingest for us, everything instance. As far as the exit of course are mechanisms, the other for women have a form lifted -- so when we reach that point in time, we will have -- in fact, we see this as an opportunity for a fleet to get to 100% when they exit. So in fact, we look at this as an opportunity more than an Otherwise, the management and everything in terms of the assets is all will be with us.

We'll take our next question from the line of Yash Digant of BOB Capital Markets Limited. Please go ahead with your question.

Congratulations on the acquisitions. Just want to understand a little bit more and taking up from where it is left off. Knowing that the 2 properties that were content Block 2 and ITPC Tad were delivered in 2025. committed occupancy within these assets at 58% and 20%, respectively. Is it right to assume that these are speculative acquisitions and further to this, despite the general robust leasing that we are observing across Chennai. -- the pickup in occupancy in these 2 properties seems suboptimal. Why do you think that is? And what is likely to change in these markets? I know you spoke about the constrained supply. But I think if I'm not wrong, the constrained supply has existed for the past 2, 3 20.

Okay, just when we look at acquisitions, obviously, that handles involved. This is completed assets, except BandLoc, it's under construction in Paita, which is getting ready in the first quarter of extend quarter. So from a quality risk point of view is stayed in care of these attach and deal assets we spend like a month during the is on the structural aspects and everything I think technical with regards to building -- there's no legal risk to the institutional sellers for both these assets, which means there is no financial risk in more. From a tenancy risk point of view, what you just mentioned, -- we've been studying the Chennai market over the last 3 months when we've kind of been acquiring in the new to acquire these assets. The very decent kind of demand. I was just looking at the RFPs in the market. There's a banking RFP at 300,000 square feet or the IT services RFP at 250,000 square feet. Another IT service cloud, we have 350,000 square the 3 domestic operations have demand between 250,000 to 400,000 square feet and the global IT majors looking for 350,000 square feet. A Japanese GCC was looking for at 50,000 square feet. -- in an IT service company, rise, which I understood like clients who are in the market, not everyone is going to come to us. Some of them we feel this is a little too expensive. Some of the main 1 like this location. But there are 25 clients who have a demand of more than 75,000 square feet in the market who are close to. So from that point of view, I think it's definitely not take it -- and in our internal workings in our internal calculations, we faced the absorption assumptions in our underwriting over 12- to 18-month period. So there's enough headway the question.

Understood. That's really happened. So is it safe to assume that Sycamore Block 1, that's expected to be delivered in late FY '27. There's going to be maybe a higher pre-leasing commitment by the time that the property becomes operational?

Yes, Chennai is a market where it's not a very pre-leasing kind of a market like Hyderabad Banglen where you see a lot of pre-leasing even 1 year or 2 years before combination. In China, typically, you start seeing inquiries around 6 months below completion. -- and closures started around 3 months before comps that kind of a market. I've been starting that market for the last 25 years. And -- but I think that with the established campus, Actually, some of our existing tenants have already showed interest, can you give us some space in the third taller. So that's definitely not a .

Understood. Just 1 last question from me. What are the average lease expiries for Tower 1 and 2 in the ITPC asset?

And that, Manus, just check and tell you. But typically, as of the leases are between 10 and 12 years and standard lease contracts of 5 plus 5 or the -- so that's ITPC is around us on an average Althea of a total of 10 years. And Balkan is approximately level as a sector.

Because these are newer assets, the leasing that does happen telenovelas.

Whatever you see is the last 1, 2 years.

We'll take our next question from Karan Khanna of Ambit Capital.

Congrats formation team on these acquisitions. There's 2 questions from my side. Firstly, Ramesh, of the 9.1 million square feet worth of acquisitions since listing, -- most acquisitions have been closed in the past 6 months. So can you talk a bit about the overall acquisition landscape a little bit? And -- what has changed in the sense that 6 months, you've seen so many acquisitions, third party and also sponsor acquisition. And more importantly, going forward, how you're looking at the landscape.

So not exactly in the last 6 months. I would say it's been in the last 1.5, 2 years. And Param, you've seen how the markets have changed. Saras doing an analysis of the last office acquisition of office demand in the country. The first 15 years, the average demand was around 30 million square feet on an annual basis. Now that's become 48 million square feet. We've seen big changes in the office market. We've seen whatever is happening on the GCC story over the last few years. I think a lot more products are also coming into the market. During over years, obviously, transaction volumes both from a leasing point of view as well as an investment sale point, you had cut down. So I think it's a good mix of good diagnostics in the market. like today, someone like Capital and is 1 of the most well-known institutional names in the country, selling an asset. It's also because of capital availability. It's also because of our confidence levels in some of these markets have gone up. So that's a good mix. Some of the sponsors, acquisition service this part has started another big back in '20, '21, '22 getting leased and coming into the market. So it's a mix of a lot of factors. And today, you can at least over time, you could not trading trade, what's going to happen more but you can say that even if the market goes here and the 10% or a 15% increase. So I think it's a lot more ready, a lot more predictability and a lot more active diverters and in the market. I think for this asset, there are like 12, 13 bidders for this -- the capital and asset, which also shows that there's a lot of interest in India office in an office as a global investment story.

And it's flat to what Ramesh said, I may. If you look at each of these acquisitions, which have happened in the last 18 to 24 months, -- each of them have been done with that strategy in mind. For example, the Mumbai assets have been on CBD front office affects. So that increases our CBD footprint in our key national cost of India. If you look at our Hyderabad acquisition, we need on an Morathmost sort of market. And the other 1 was in financial district is the next market to go to. And that was the actual value by which we did a fact -- so that was our strategy behind the point in the Hanam assets. Chennai already remains overall. So all these acquisitions that we've done across different geographies have been done on keeping an investment philosophy in line.

Now the 2 other points, Karen is we have also done not just coal. We have done cores. We have done value-added like in Chennai now the last half. That's a good example of value add. So Hadasit acquisition, that's again a coal plus where there's -- sorry, a value-add plus a gold plus where there's an opportunity for an upgrade. There is an alternate usage potential -- so looking at all that and also from some of the landlords, which we have picked up within our park, landlords not kind of wanting to hold out to their assets in ambagetting it to us. So it's a good mix of both organic and inorganic acquisition and a thing which I mentioned in my speech, which Priolo spoke about now. is we have done acquisitions in all cities. It's not just 1 city or 1 corridor. So where the cities where we have price -- we are getting stronger and stronger. -- was also only city where we are as strong as compared to the other 3 cities. But these acquisitions, like I mentioned. We began monster talk to Carbon owners of all these assets of the same.

Sure.helpful, Rami, just a follow-up on this. Given that now with these acquisitions, your loan-to-value is nearing 30% which historically has been the upper end of the cap that you've been comfortable with. Going forward, going into FY '27, how are you now thinking about growth? Will it continue to be a mix of organic and inorganic acquisitions? Or will leasing up the entire vacant are across your portfolio assets? Will that also be a revenue driver going into Fy '27.

Yes. So let me answer that. You're right. But now it has gone to 20%, but I think we need to bear in mind to your existing portfolio as well as this for -- the values of these portfolios also increasing as we are beating them up. We are doing them at higher enters you are doing more and more organic growth within the portfolio, whether developers, when they're doing new buildings or you're completing the interesting building. So at each of these enhance the value of the portfolio, be the 30% is the number that you see today. But as the value of the portfolio grows -- this is not going to be the stable static number which you see. So that's number one. Second, I don't think this is going to come in via or other we are very clear when we have the right opportunity to grow capital is not something which is going to constrain our Antar, yes, 30, 35 is more palate. So at an appropriate time, if we feel that there are almost opportunities coming and be able to come in using a -- so we are not in any rush to raise capital, but if there are opportunities in FY '27 for us to further enhance the main kind of acquisitions, then we will come back to the moment.

And Sure. And my last question, specifically on the ITPC acquisition. If I look at Slide #14, basis your assessment by when do you expect PDR to bridge the rental cap use OMR. So MR is currently at 130, 140 by when you estimate that number for BTR as well.

I don't think it will go to the 130, 140 number any time soon. But that's the opportunity for us because the gap between 85 and 130, it takes time. I remember doing a deal in that 130 we target at 21 and many years back and plans were trying to pat -- so some of these things like in Hyderabad you were just checking. -- months back in Hyderabad, our rentals, we were doing to use at 77. Today, exactly in the same market we're doing the 105 -- so Sander can be big jumps and ships like this, but it's over to 130, but that's the potential we have.

We'll take our next question from that of Axis Capital.

Yes. I hope I'm audible. On the 2 acquisitions. Firstly, on the DPU accretion, given that we have income support for Pelicane acquisition, that doesn't seem to have DPU dilution, right? And probably ITC will still have a dilution for temporary or near-term period until those assets are stabilized. Is that understanding right?

Yes, that's more or less the right.

Sure, sure. And in terms of the -- the INR 240 crore of steady stabilized NOI for ITPC, -- what is the value-add assumption in terms of -- by what time will be there? And what is our internal assessment about reaching that INR 40 crores NOI in terms of time lines?

In terms of the absorption like he spoke about, we've been the park, there's about 2.5 million to fill and you're looking at about 2 to 3 months to 12 to 18 months rather to fill this case. So I think porter towards maybe Q2 of FY '28 is when you will see a TBC generating rent fully on that problem. -- and you will see this group.

Sure, sure. Got it. And in terms of completion time lines of both these acquisitions, when it would be? And how would the accounting for ITPC work? Like will we be consolidated line by line and then exclude the minority share post the NDCF -- or how should we think about it, yes?

So part of the question, we are hoping in the next 3 to 4 to close motor transactions. And as far as accounting goes, yes, it will be a 99 contamination because of control -- and yes.

Got it. And just lastly, on the balance leasing. As per our assumption, are we taking into condition 85% the rentals or we are lower or we are building in growth on those rentals when we are assuming a steady-state NOI and the yield on that?

Typically, Pradesh, how the leasing market works is you do a couple of deals at, let's say, 85, 87 and then you slowly keep pushing up the rentals for every the but sometimes a large client would black for every client will come and say, okay, I'll take it but 85. So there is an opportunity to easily take these rentals up like said all these deals we are talking to all of those 25 deals which are there in the market currently, not everything is going to come to us. But our class is a rentals right now, design are going to be more than 85.

We'll take our next question from the line of Parvesh Kazi of Nemaha Group.

So in terms of both these acquisitions, there will obviously be incremental debt that we will need to take -- in terms of the cost of debt, et cetera, I mean, what are our expectations? Has there been any hardening of images, et cetera, over the last 3 to 6 months, particularly in light of the recent geological issues.

Yes. So as far as volatile clientele in it that's happening through -- as far as ITC region will go, we will be doing an entry. You're right that because of the board that have -- what we intend to do is it is a short down funding because they do want to know assets at these rates for the note. So we will know a short-term funding for the time to fund the acquisition. And once markets stabilize, and we see that the rates are might put us to lock in a normal period. That's when we can move on some terms of and that's the plan.

We'll take our next question from Kunal Lakhan of CLSA.

Just firstly, on ITPC. The Tower B, the average lease is about -- can you give us some color on the last lease that was signed in terms of when was it side and what rented was signed at? {}

We have already signed a lease at 85.

This is in the last few months?

In the last 45 days.

Okay. Perfect. And my second question is actually a follow-up of the earlier question. In terms of the debt financing, right, if you can give some color on what is the current interest cost on ITPC, the INR 1,000 crores that they have currently?

So the current cost on IT is around 7.8% -- so the 1 tower fully let is again LRD rate of 7.4%. The other since it's not yet fully let. There is room to refinance that loan to aerate prevailing market rates. -- but it is at 8.4% current. So there is an opportunity to refinance it as we lease up the second.

No. But once we're done with the acquisition, do we expect these LRD rates to go below 7%, 7.4% or it should remain at these levels.

No. In fact, to date, you see your variable cost is to than your fixed cost. Today, you are actually able to get LRDs at -- so 7 to 25 is a cost is where you're seeing the debt. So in fact, today, if we see it is much better to do a viable cost and we have it. So that's why I would say and we may either do a payable costs for the newer short-term funding and then when the market stabilizes before we go in and lock in ourselves for long term.

So, say, 12 to 18 months out when you fully lease these assets. One can expect for see, your existing debt to be at around 7.25% andthen the new fund that you'll be raising for the acquisition should be around the same. Would that be a fair assumption?

Yes. So I won't say,Idon't know how the fixed cost debt win we have 6 months, 12 months from the line was all dependent on how the contest. But I can say that of it is before the work we have been doing our debt between 725, 730 which is a fixed cost. I don't know how soon can we get to those. But I think it will be fair not for the next 3 months. But if everything gets back to normal and a set, then I think we should go back to maybe the may not be in a rush -- but lest I see towards eater for the next financial year center, and we should get back to the -- but I am to answer your question, I think half would be a good range for us to be at.

Understood. Understood. And my last question was, Ramesh, in your opening comments, you mentioned that this could be DPU marginally dilutive in the near term. but it's accretive on the IRR basis. If you can give some color on what is the IRR expectation or projections that you have done in this -- on this acquisition.

So if I may just comment. So any of these acquisitions, whenever we are doing these acquisitions, let me actually answer it not as specific to these assets, but generally the philosophy that we have followed -- these assets are fully completed or leased out and maybe almost close for us to lease out then we've ensured that mid-teens is what we are solving for. And if we have are construction, then high teens is what we have been sounding for. So those are the ranges that we sold for any of the acquisitions these.

Sometimes we've been very pleasantly surprised also like in Hyderabad, the building pad, which is just coming up, we had underwritten rentals of 82 for that building. for the current inquiries and yields, which are happening there at 120. So then again, the IRR calculation, what we had, I think, bookings passively jump extra. So like Preeti said, when you're looking at these kind of acquisitions, something around that minimum of 14%, 13.5% is small at -- but then also, like I said, the value-add strategy in the at a cap rate of 9.9%. So there, obviously, are for core kind of things, the market is competitive, you need to look at it.

And also if you look at onwards the last 6 years, if you look at any of the assets on the portfolio basis what we had taken when we did our IPO and where we are landing up the reach of the asset -- there's so much value and gas happened in every single asset of us, even from the clear square foot serve are and the tone and 29 million square it -- we actually added 6 million organically, which was not even valued at the time of IPO. Rather the 2G development or finding potential areas of development in the assets on working to spaces like the experience centers and so on and so forth. So there's constant value addition which is happening in these portfolios and that goes without paying for in the new acquisitions which we -- and that's how we have been creating banning even in the interesting portfolio, and that's how we continue with any acquisitions that we.

So a lot of our grades, a lot of investments in being sure on asset management, how we enhance the -- so how do we increase SMB changing the lobby. So a lot of things go in the background to even for the core product, how do we make it more of a value add as well.

Understood. Just clarifying 1 thing. So in respect to whether it's -- it's -- the acquisition is based on income support or without income support, the IRRs would be in the mid-teens range, minimum.

Yes, that's what is helpful.

[Operator Instructions] We have a follow-up question coming in from Girish Choudhry of Avendus Spark.

Just 1 question. On the income support right now, it assumes 100% occupancy. And from a time line point of view across both the assets, it's running for less than 12 months now. On -- within that, if I look at Block 3 has 42% vacancy, right? So what I'm trying to understand is that as and when the support rolls off or the transition between the income support to actual occupancy. How confident are you with the NOI trajectory remaining unaffected?

From a market point of view, that's only 3 square -- so no black or this is sometimes there can be done in 1 deal, sometimes candidate 4, 5 deals. So it's not too much of a variation.

And Girish, I would say as we broadly -- even if it doesn't, it will be such a leader amount or business that I will clearly people such a man. We have tried to plug as much as we can, and we have populated -- but even if it remains and be extremely more.

Yes. The support also the end of the financial year, having 1 billing in matter way in March. I think there's a really animate time for us to fill up the gain.

Working is you should remember is because there are 3 buildings. There are multiple sized units, which is available, multiple timing, which is available in summer like now and Manila next year, they can offer that. So all those rotation combinations we can.

[Operator Instructions] As there are no further questions, on behalf of Mindspace Business Parks REIT, that concludes today's conference call. Thank you, everyone, for joining us. And you can now click on the leave icon to exit the meeting. Thank you for your participation.

Thank you.