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Our data-driven approach keeps us at the forefront of India's commercial real estate industry, continuously improving performance and elevating experiences."
Dear valued unitholders,
Presenting our third Annual Report, as I reflect, I see a year where we remained steady to our core objectives, viz. focused execution, a continuing commitment to sustainability, enhancing governance and sustainable growth.
The effective economic occupancy of our portfolio remained steady at 89% while we achieved a 15% growth in the contracted NOI run rate from Q4 FY2022. Our gross leasing stood at 2.1M sf which is 1.8x of our historical average. We successfully re-leased 0.9M sf to TCS for a 15-year term and achieved a robust renewal spread of 35%, substantially de-risking our portfolio.
Maintaining our commitment to our unitholders, we are pleased to uphold our NDCF guidance and distribute ₹0.2 per unit this year.
With sustainable development at our core, we advanced our net zero target by 10 years to 2040. With a focus on enhancing governance, we now have six members on our board of directors.
We are pleased with our robust performance and are poised for rapid organic and inorganic growth in our business after having delivered our objectives for the year.
By focusing on technology, innovation and ESG initiatives, we continue to successfully meet the needs of a young and growing workforce.
Our sustainable and innovative workplace solutions in India have fueled a remarkable eight-fold increase in physical occupancy from January 2022 driven by accelerating return-to-office trends. FY2023 witnessed impressive gross leasing of 2.1M sf, including new leases and renewals. These achievements are a testament to our deep-rooted tenant relationships and our commitment to delivering exceptional workplace experiences.
Our diversified client sectors, led by technology and followed by consulting, BFSI, healthcare, telecom, and others, were instrumental in driving this success. We achieved an average escalation of 11% on 4.1M sf of leased area, and our Adjusted Net Operating Income grew by 38% YoY to ₹9,608M, while income from Operating Lease Rentals rose by 28% year on year to ₹8,268M. Currently, 94% of our Gross Asset Value is in operating properties. Our portfolio has a robust effective economic occupancy of 89% and a commendable weighted average lease expiry (WALE) of 7.9 years.
Brookfield India REIT leads through technology integration, optimizing assets and delivering exceptional tenant experiences. Smart building integration enables energy efficiency, sustainability, and operational insights. Our data-driven approach keeps us at the forefront of India's commercial real estate industry, continuously improving performance and elevating experiences.
Our innovative way of encouraging new ideas led to the creation of the ‘Innovation Club’, a collaborative platform uniting diverse perspectives and ideas, fostering creativity, sharing best practices, and implementing solutions for a better workplace tomorrow.
We prioritize sustainability, responsible investments, and community engagement, creating long-term value while minimizing our footprint and promoting social well-being. We are fully committed to developing and operating high-quality assets that meet the highest standards of environmental sustainability, enable positive social impact and have an institutional governance mechanism.
Committed to building a vibrant, inclusive and sustainable space, Brookfield India REIT has been awarded a 5-star rating for its environmental, social, and governance performance from GRESB in its first submission. We outperformed GRESB global averages across all criteria, scoring 100% in Social and Governance categories for our operating portfolio.
To minimize our environmental impact, we prioritized energy efficiency, water conservation, recycling and indoor air quality across all our campuses. As a result, by 2025, we are committed to achieving building certifications for 95% of our portfolio, allocating 50% of the material cost of development to green materials, and transitioning 100% of our power consumption to renewables by 2027. A recent assessment reveals that the ~20,000 trees at our REIT assets have sequestered 812 metric tons of CO2. We have advanced our net zero target by 10 years to 2040 with a commitment to accelerate renewable energy procurement and transition to clean energy.
In addition to our sustainability initiatives, we take great pride in fostering a diverse and inclusive community. On International Women's Day, we launched the Brookfield Properties Women's Network (BPWN) in India, a forum that aims to attract, develop, and empower women by providing initiatives and support for career growth and leadership development.
We have advanced our net zero target by 10 years to 2040 with a commitment to accelerate renewable energy procurement and transition to clean energy."
CO2 SEQUESTERED BY 20,000 TREES IN OUR BROOKFIELD INDIA REIT ASSETS
EXPANSION OF BROOKFIELD INDIA REIT PORTFOLIO IN GURUGRAM AND MUMBAI
CURRENT PORTFOLIO SIZE
With a continuing focus on governance, we inducted two eminent members in our board of directors. I am pleased to welcome Mr. Rajnish Kumar, a veteran banker with nearly four decades of experience, as an independent director on the Brookfield India REIT board. I am also pleased to welcome Mr. Jan Sucharda to the board of Brookfield India REIT. He is a Managing Partner and Global Head of Office in Brookfield Asset Management’s Real Estate Group.
Our commitment to growing and diversifying Brookfield India REIT portfolio is a key aspect of our long-term strategy. Continuing our growth journey, we are delighted to announce on May 18, 2023, the expansion of our portfolio through the proposed acquisitions of a 6.5M sf portfolio in Gurugram and Mumbai, in a 50-50 partnership with GIC for a total consideration of ₹112,250M. Brookfield India REIT is the first Indian REIT to set up a long-term partnership with a global institutional investor through its strategic partnership with GIC.
The acquisitions are well aligned with our growth plan, enhancing the value of our REIT and increasing our operating area to an impressive 20.6M sf. The proposed acquisitions will increase our Operating Area by 44% and Consolidated Gross Asset Value by 73%, with sizeable geographic and tenant diversification thereby strengthening the overall resilience of our portfolio. It will further solidify our position as the premier destination for India's talent and the preferred choice for multinational tenants. The acquisitions are accretive for Brookfield India REIT unitholders and expected to increase NDCF per unit by 4.5% and valued at a 5.8% discount to Consolidated Gross Asset Value.
Our proposed strategic acquisition, combined with our existing portfolio, lays a solid foundation for future success. By leveraging our assets, market dynamics, and development opportunities, we create sustainable long-term value for our unitholders.
I would like to extend my gratitude to our employees, associates, customers, communities, and all stakeholders for their continued support. We deeply appreciate your continued support, trust and partnership, which have been instrumental in the success of Brookfield India REIT. As we move forward, we are committed to staying ahead of industry trends and delivering high-quality, innovative, and sustainable real estate assets where India’s talent aspires to be.
Sincerely,
