Standalone Financial Statements
CEO’S MESSAGE
Recently, we have been instrumental in forming the Indian REITs Association (IRA) in collaboration with our peers and the SEBI regulatory authority. The IRA will help to ensure the highest standards of compliance and governance by all the REITs. It will help to protect and promote the interests of the unit holders. The Association will also encourage educational initiatives amongst all stakeholders and retail investors, to enhance knowledge about investments into REITs as a long-term capital appreciation vehicle.
In the last two quarters, we have delivered a steady leasing performance; the compelling demand from both our existing and new tenants, catalyzed by their return-to-office programs, underscored the exceptional quality and demand of our offerings. During this period, our gross leasing activity reached 822,000 sf(1). We secured substantial new leasing agreements, encompassing a total of 529,000 sf* with marquee tenants across all our properties.
A noteworthy 95% of our gross asset value (GAV) is now encapsulated within our operating properties, signifying the resilience of our portfolio. Our campuses have an effective economic occupancy of 88%, with a weighted average lease expiry (WALE) spanning 7.4 years.
In this growing environment, our adjusted Net Operating Income (NOI) surged by 24% in H1 FY2024, compared to the same period the previous year. This financial fortitude resulted in a Distribution per Unit (DPU) of ₹3,574M or ₹8.25 per unit.
In our pursuit to enhance value for our unitholders, we have executed a strategic expansion plan by acquiring 6.5M square feet of Grade A commercial office properties in Mumbai and Gurugram. This achievement was made possible through an equal partnership with GIC, a globally recognized institutional investor, reinforcing our shared commitment to creating significant value.
(1)including a pre-lease of 45,000 SF * including pre-lease of 45,000 SF
This endeavor was supported by successful fundraising, totaling ₹27.1B, to fund these acquisitions. Notably, this funding included ₹23.1B obtained through our initial institutional placements, where 91.3M units were issued to 64 institutional investors, representing a diverse array of stakeholders. An additional ₹4.0B was raised through preferential allotment to the Sponsor Group, set at a premium of 25%, further highlighting the confidence and backing from our supporters. An additional ₹7.5B was sourced through commercial paper offerings. These transformative acquisitions have substantially increased our operational footprint by 45%. Furthermore, the concentration of our top five tenants has been successfully reduced from 52% to 31%, creating a more balanced and less risk-prone portfolio.
Our ESG ethos promotes belonging and stakeholder engagement, enhancing environmental and social impact. This is consistent with our philosophy of conducting business, in a sustainable and ethical manner, with a long-term perspective. Our commitment to sustainability extends to our ongoing efforts to ensure that our assets are environmentally friendly, efficient, resilient, and future ready. We remain dedicated to achieving our ambitious goal of net zero emissions by the year 2040.
We've made significant progress in this direction, with a particular focus on transitioning our campuses to green energy. During the period, we achieved a notable milestone, with nearly 26% of our electricity consumption sourced from sustainable and eco-friendly sources. Candor TechSpace Sector 62 and Candor TechSpace Sector 135, Noida have taken significant steps towards sustainability, achieving 36% green energy status each. These accomplishments reflect our commitment to reducing our carbon footprint and promoting eco-friendliness.
Our efforts in sustainability have garnered several recognitions this quarter. For the second consecutive year, we received a prestigious 5-star rating by GRESB and ranked #1 in Management score in Asia. Kensington has been recognized with an IGBC Gold Rating, and the entire Candor TechSpace Sector 21, Gurugram campus achieved the prestigious IGBC Platinum Rating, including the newly constructed Towers 11 and 11A. We secured the Golden Peacock Award for energy efficiency in the real estate and construction category for the year 2023. Furthermore, 13 of our properties across six cities achieved five-star ratings in occupational health and safety audit conducted by British Safety Council and honored with the prestigious Sword of Honour for the year 2023.
We celebrated Earth Day with an impressive Ploggers Drive, where 650 tenants and employees joined forces to jog and collect over 450 kilograms of waste, demonstrating our dedication to environmental stewardship. Additionally, we took a significant step towards promoting diversity and inclusion by organizing our first-ever Pride March during Pride Month, which saw participation from over 1,500 individuals across five cities.
The demand for high-quality assets remains strong, with a notable trend of occupiers relocating from Grade B to Grade A properties. Additionally, the increased workforce among our occupiers propels the need for additional integrated office spaces. We are well positioned to capitalize on these opportunities with our high-quality portfolio and steady financials.
I would like to thank our stakeholders who have been our committed partners in progress. I also want to extend sincere gratitude to our unitholders for believing in our business, our ethics, and our promise of creating lasting value. Our tenants, by choosing us as their partner of choice, have always placed their unwavering faith in us. And lastly, I thank our management team and all our employees, who are our most invaluable assets, for tirelessly striving to build a strong organization.
