InvestorQ : What do you think are the key positives in favour of the Mindspace REITS IPO?
swati Bakhda made post

What do you think are the key positives in favour of the Mindspace REITS IPO?

Answer
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Dia Deshpande answered.
3 months ago


You must aware that the Mindspace REITS IPO opens on 27 July and closes on 29 July. The price band has been set at Rs.274-275. As of 25 July, Mindspace REITS has already raised Rs.1519 crore from anchor investors including Monetary Authority of Singapore and the Government of Singapore, among others.

Apart from the anchor investors, Mindspace REITS also has commitments worth Rs.1125 crore from strategic investors. If you add up the anchor investors and the strategic investors then nearly 60% of its Rs.4500 crore is already tied up. The IPO may also be a reasonable as the overall valuation is Rs.16,000 crore against property value of Rs.23,000 crore.

Mindspace REITS IPO gives an opportunity to participate in a diversified portfolio of commercial properties. Since the minimum investment is Rs.50,000 per application, even small to medium-sized investors can get access to a diversified property pool. The good news is that the occupancy rate of 88% is likely to go up to 92% in next 3 years.

Mindspace has traditionally enjoyed 12-15% price escalation during each 3-year renewal and that is likely to drive future growth of the business. The market rentals of most of the properties in the portfolio are nearly 15-20% higher than the committed rates. Of course, the big driver for the REITS issue could be the post-COVID pick-up in GDP growth.