Mindspace REIT buys Chennai office from sponsor for ₹2,541 crore

Bengaluru: Mindspace Business Parks REIT has acquired a 2.6 million sq ft office campus in Chennai for ₹2,541 crore, as the Mumbai-based company steps up acquisitions to expand its portfolio.

Mindspace REIT on Tuesday said it has acquired 100% equity shareholding in Sycamore Properties Pvt and Content Properties Pvt Ltd, subsidiaries of its sponsor K Raheja Corp, at Commerzone Pallikaranai, located in Chennai's Pallavaram-Thoraipakkam Road.

The real estate investment trust (Reit) had struck a right-of-first-offer (ROFO) agreement with K Raheja Corp., and the office campus is the fifth asset it has acquired from the sponsor’s pipeline.

The board of the manager to Mindspace Business Parks REIT has approved the transaction and a preferential issuance of up to ₹675 crore, subject to unitholder and other regulatory approvals.

A Reit is a trust that owns a pool of income-generating commercial real estate assets, such as office parks and shopping malls, held in a special purpose vehicle (SPV). It generates revenue by leasing out these properties and collecting rent from tenants.

The transaction marks Mindspace REIT’s second acquisition in Chennai post August 2022 listing. Since going public, the Reit has acquired around 6.6 million sq ft, valued at ₹8,800 crore. Its acquisitions remain diversified across Mumbai, Hyderabad, Pune and Chennai.

“The acquisition of Commerzone Pallikaranai is a strategic addition to our portfolio and strengthens our presence in Chennai, one of India’s most resilient and high-growth office markets, with the lowest vacancy," said Ramesh Nair, managing director and chief executive officer (CEO), Mindspace REIT. It positions us strongly to capture future leasing demand, rental upside and long-term value creation for our unit holders, Nair added.

Commerzone Pallikaranai is a Grade-A office campus spanning 12.4 acres. The property currently includes 1.4 million sq ft of completed office space spread over 2 towers, with the remaining 1.2 million sq ft under construction to be delivered by March 2027. The campus is anchored by Shell, which occupies 55% of the leased area.

Once the acquisition is completed, Mindspace REIT’s total leasable portfolio will increase from 41.6 million sq ft.

Last November, Mindspace REIT said it acquired two assets in Pune and one asset in Mumbai from its sponsor K Raheja Corp for ₹2,916 crore.

Mindspace REIT is one of the four listed Reits in the country. The other three are Embassy Office Parks REIT, Brookfield India Real Estate Trust and Knowledge Realty Trust.

Mindspace REIT also acquired office space in Commerzone Raidurg in Hyderabad’s Madhapur locality for ₹2,038 crore from a subsidiary of K Raheja Corp.