Rationale

 The rating action for Mindspace Business Parks REIT (Mindspace REIT) favourably factors in its well diversified and large portfolio of assets with expected sustenance of healthy committed occupancy in the medium term and comfortable leverage levels. The committed occupancy for the completed area stood at 91.9% as of June 2025 (91.2% as of March 2025). The ratings note its large and diversified portfolio of assets with office space, including completed area of 30.2 million square feet (msf), and under-construction area/future planned development of 7.1 msf as of June 2025. Mindspace REIT’s portfolio is spread across major cities such as Mumbai, Pune, Hyderabad and Chennai, with a reputed and diversified tenant mix comprising leading multi-national and Indian corporates. The top 10 tenants generated 34.8% of the gross contracted rentals as of June 2025. The ratings draw comfort from the low external borrowings at the consolidated level with total debt at Rs. 10,305.9 crore and comfortable total debt/Annualised NOI at 4.2 times as of June 2025. The portfolio has a low leverage with loan to asset value (LTV)1 of 25.0% as of June 2025, which provides exceptional financial flexibility to Mindspace REIT to fund its future organic as well as inorganic growth. Based on its current capital expenditure/acquisition plans, ICRA expects the Total Debt/NOI to remain at less than 5 times in the near to medium term. Part of Mindspace REIT's debt, at the consolidated level, is in the form of CPs and NCDs with bullet repayments at the end of their maturity period, exposing the REIT to refinancing risk. This risk is mitigated to an extent by the tranche repayment of the issuances and undrawn overdraft/LRD facilities of Rs. 285.9 crore as of June 2025, which are expected to be available to meet any exigencies. ICRA notes that tenant leases contributing to 3.2%, 6.2% and 7.2% of the gross contracted rentals will be due for expiry in Q2- Q4 FY2026, FY2027 and FY2028 respectively. The risk is partially mitigated by reputed tenants with strong businesses and lower-than-market rentals, increasing the tenant stickiness. The ratings consider the impact of the future acquisitions that may be undertaken by Mindspace REIT on its leverage metrics. ICRA will monitor the future asset acquisitions and their consequent impact on the leverage. Comfort, however, is drawn from the proven track record and the experienced management of the REIT sponsor, K Raheja Corp Group (KRC), as well as the REIT manager K Raheja Corp Investment Managers Private Limited (formerly known as K Raheja Corp Investment Managers LLP (KRCIML)), and the financial flexibility of Mindspace REIT. ICRA expects that Mindspace REIT’s credit profile will be supported by REIT regulations that restrict the extent of underconstruction assets in the portfolio to less than 20% of the asset value and the cap on leverage at 49% of the asset value. The Stable outlook reflects ICRA’s opinion that the Trust will benefit from its large, diversified and stable operational portfolio, the anticipated growth from assets currently under development and the expected low leverage levels.