Mindspace REIT Makes a Landmark Entry into Hyderabad’s Financial District

Mindspace REIT Makes a Landmark Entry into Hyderabad’s Financial District

Date: July 24, 2025

Mindspace Business Parks REIT, the real estate investment trust backed by K Raheja Corp, has formalized its first third-party asset acquisition, securing Q‑City, a commercial office campus of approximately 0.81 million sq ft in Hyderabad, for around ₹512 crore.

Asset & Location Highlights

• Property: Q‑City, spread across 6 acres, located in Hyderabad’s Financial District, one of the city’s fastest‑growing commercial micro‑markets.

• Connectivity: Situated opposite the U.S. Consulate and within 1 km of the upcoming Wipro Circle Metro station, offering excellent last‑mile access.

• Occupancy: Currently leased to ~65%, with significant upside expected through value enhancement and leasing initiatives under Mindspace’s management.

• Rebranding: Post-acquisition, the campus will be renamed “The Square, 110 Financial District”

Strategic Financial Metrics

• Acquisition Value: ₹512 crore, translating to roughly ₹6,130 per sq ft — representing an 11.6% discount to independent valuation estimates.

• Cap Rate: Approximately 9.9%, delivering a projected ₹53.5 crore in pro‑forma Net Operating Income (NOI), contributing a 2.6% uplift to FY25 NOI.

• Funding & Leverage: Fully debt-financed, slightly increasing Loan‑to‑Value ratio from 24.3% to 25.1%.

• Portfolio Scale-up: Mindspace REIT’s total footprint now expands from 37.1 to 37.9 million sq ft, with Hyderabad holdings crossing 16 million sq ft post-deal; Gross Asset Value rises to ₹37,143 crore from ₹36,647 crore; and Net Asset Value jumps by ₹1.8 per unit.

Why This Deal Matters

1. Strategic Diversification

• Marks the first external acquisition beyond existing Mindspace parks, aligning with a disciplined growth strategy into prime office markets.

2. Hyderabad's Growth Story

   • The city is India’s hottest hub for Global Capability Centres (GCCs), hosting over 350 international centres, fueled by booming tech and BFSI employment demand.

   • As supply tightens in areas like Hitec City and Madhapur, demand is shifting westward to Financial District and Gachibowli — positioning Mindspace to capture future expansion opportunities.

3. Value‑Accretive Acquisition

• Securing the property at a valuation discount, high cap rate, and immediate NOI impact positions the REIT to deliver both yield and valuation uplift to unitholders.

What Lies Ahead

• Leasing Strategy: With significant pre-leasing potential, Mindspace will likely deploy asset enhancement and tenant network leverage to lift occupancy.

• Market Impact: Financial District’s growth trajectory is expected to intensify as occupiers look beyond traditional tech hubs.

• Portfolio Growth: This acquisition signals possible future third‑party additions as Mindspace pursues external value opportunities across its core markets — Mumbai, Pune, Chennai, and Hyderabad.

Snapshot Table

Metric	Details
Asset Name	Q‑City → The Square, 110 FD
Location	Financial District, Hyderabad
Size	~0.81 million sq ft
Transaction Value	₹512 crore (~₹6,130/sq ft)
Discount to Valuation	~11.6%
Cap Rate	~9.9%
Occupancy	~65%
NOI Uplift	₹53.5 crore (≈2.6% FY25 boost)
Impact on Portfolio	↑ to 37.9 msf total, 16 msf in Hyderabad
Financial Ratios	LTV ↑ to ~25.1%
NAV Impact	+₹1.8 per unit

Concluding Thoughts

This acquisition represents a pivotal moment for Mindspace REIT — both as a strategic milestone in Hyderabad and as a clear signal of its disciplined expansion ambitions. By entering the Financial District through a well-priced, value-accretive asset, the REIT not only deepens its presence in a high-demand market but also reinforces its commitment to delivering long-term, yield-driven returns to investors.

The westward shift of occupiers within Hyderabad, coupled with a lack of quality institutional-grade space, creates compelling tailwinds for Mindspace’s growth ambitions in the coming years.