| Gigaplex Estate Private Limited | ||
| Rating Withdrawn | ||
| Rating Action | ||
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| & ^A prefix of 'Provisional' indicates that the rating centrally factors in the strength of specific structures, and will be supported by certain critical documentation by the issuer, without which the rating would either have been different or not assigned ab initio. This is in compliance with directive issued by the Securities and Exchange Board of India (SEBI) on May 6, 2015, on 'Standardising the term, rating symbol, and manner of disclosure with regard to conditional/provisional/in-principle ratings assigned by credit rating agencies (CRAs)’ | ||
| 1 crore = 10 million | ||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has withdrawn its ‘Provisional CRISIL AAA/Stable’ rating to the proposed non-convertible debentures (NCDs) of Gigaplex Estate Private Limited (Gigaplex, part of Mindspace Business Parks REIT [Mindspace REIT, rated ‘CCR AAA/Stable’]) on receipt of withdrawal request from client.
Mindspace REIT is sponsored by the K Raheja Corp group. The real estate investment trust (REIT) owns eight special purpose vehicles (asset SPVs) comprising 10 commercial offices, information technology (IT) parks and special economic zone (SEZ) assets, and houses the facility management division.
The ratings continue to reflect Mindspace REIT's comfortable net loan-to-value (LTV) ratio, characterised by low debt, strong debt protection metrics supported by a cap on incremental borrowings, and stable revenue profile of the assets, amidst benefits of high occupancy and geographic diversification. The strengths are partially offset by susceptibility to volatility in the real estate sector, causing fluctuations in rental rates and occupancy levels
Subdued economic activity or extended periods of work-from-home adopted by certain corporates may lead to build up of vacancy in the near term. Further, there was a temporary halt in planned construction activity during the lockdown phase. Nevertheless, work has resumed for most projects now. CRISIL Ratings will continue to monitor events around the pandemic. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of Mindspace REIT with those of its asset SPVs, in-line with its criteria for rating entities in homogeneous groups and equated the rating of Gigaplex to that of the REIT. This is because Mindspace REIT has direct control over the asset SPVs, and will support them in the event of any exigency. Additionally, as per SEBI’s REIT Regulations, 2014, Mindspace REIT and its asset SPVs are mandated to distribute 90% of their net distributable cash flow. Also, the cap on borrowing by the REIT has been defined at a consolidated level (equivalent to 49% of the aggregate value of Mindspace REIT’s assets).
Please refer Annexure - List of entities consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
About the Company Gigaplex owns and operates an SEZ/IT park, Mindspace, in Airoli (West), Mumbai region. The property has been operational since 2013, and has a total completed leasable area of approximately (approx.) 35 lakh square feet (sq. ft) with committed occupancy of 72.3% as on December 31, 2020, while an additional area of approx. 10 lakh sq. ft is under construction and expected to be completed in phases over the next 12 months. |
About the Trust Mindspace REIT is registered as an irrevocable trust under the Indian Trust Act, 1882, and as a REIT with SEBI’s REIT Regulations, 2014, as amended. Mindspace REIT’s portfolio assets are held through the following asset SPVs:
K Raheja IT Park (Hyderabad) Ltd (KRIT), Sundew Properties Ltd (Sundew) and Intime Properties Ltd (Intime) own and operate a SEZ/IT park, Mindspace, in Madhapur, Hyderabad. The property has been operational since 2005, and has a total completed area of approx. 100 lakh sq. ft with committed occupancy of 95.2% as on December 31, 2020, while an additional area of approx. 6 lakh sq. ft is expected to be developed over the medium term.
Avacado Properties and Trading (India) Pvt. Ltd (Avacado) owns and operates: a)An IT park, Mindspace, in Malad, Mumbai region. The property has been operational since 2004, and has a total leasable area of approx. 7 lakh sq. ft with committed occupancy of 82.4% as on December 31, 2020. b)A commercial office, The Square, in Bandra Kurla Complex, Mumbai region, with a total leasable area of approx. 1 lakh sq. ft and committed occupancy of 27.4% as on December 31, 2020. The property was acquired by the group in August 2019, and is being leased gradually.
Mindspace Business Parks Pvt. Ltd (MBPPL) owns and operates: a)An SEZ, Mindspace, in Airoli (East), Mumbai region. The property has been operational since 2007, and has a total completed leasable area of approx. 47 lakh sq. ft with committed occupancy of 93.2% as on December 31, 2020, while an additional area of approx. 21 lakh sq. ft is expected to be gradually developed over the medium-to-long term. b)An IT park, Commerzone, in Yerwada, Pune. The property has been operational since 2010, and has a total leasable area of approx. 17 lakh sq. ft with committed occupancy of 97.5% as on December 31, 2020. c)An IT park/commercial office, The Square, in Nagar Road, Pune. The property has been operational since 2015, and has a total leasable area of approx. 7 lakh sq. ft with committed occupancy of 79.8% as on December 31, 2020. d)An SEZ, Mindspace, in Pocharam, Hyderabad. The property has been operational since 2012 and has a total completed leasable area of approx. 4 lakh sq. ft with committed occupancy of 71.1% as on December 31, 2020.
KRC Infrastructure and Projects Pvt. Ltd (KRC Infra): a)Owns and operates a SEZ/IT park, Commerzone, in Kharadi, Pune. The property was completed in fiscal 2020, and has completed leasable area of approx. 13 lakh sq. ft with committed occupancy of 93.1% as on December 31, 2020. Another approx. 13 lakh sq. ft of area is under development or proposed to be developed over the medium term. b)The facility management arm, housed under this entity beginning October 1, 2020, provides services for each asset under the REIT. Services include housekeeping, management of equipment, facade cleaning, security expenses, repair and maintenance and maintenance of common areas, etc.
Horizonview Properties Pvt. Ltd (Horizonview, rated ‘CRISIL AAA (CE)/Stable’) owns an IT park, Commerzone, in Porur, Chennai. The property was completed in June 2020, having completed leasable area of approx. 8 lakh sq. ft, to be leased gradually over the medium term. |
Key Financial Indicators (consolidated)*
*CRISIL-adjusted numbers |
Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL complexity levels are assigned to various types of financial instruments. The CRISIL complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
*Not yet placed |
Annexure – List of entities consolidated with Mindspace REIT
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| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||
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