Buy

With a 14% upside from the CMP, we maintain our long-term BUY rating on the stock.

With a 14% upside from the CMP, we maintain our long-term BUY rating on the stock.

We attended Nexus Select Trust REIT’s (Nexus) recently held Analyst Meet. The company has unveiled its “Nexus 2.0: Re-imagining the Future” strategy.

With a 18% upside from the CMP, we maintain our long-term BUY rating on the stock.

Embassy Office Parks REIT’s (Embassy REIT) overall portfolio occupancy, as of Dec’24, was 87% – including infusion of 1.4msf Splendid Techzone, Chennai asset of 1.4msf from 1 Jun’24.

The REIT manager of Nexus Select Trust announced the closure of the acquisition of Vega City Mall, a Grade A mall located in south Bengaluru for a total EV of INR 9.1bn (initial purchase cost of INR 8.7bn – funded 100% by debt at 7.7% and balance towards planned capex).

Embassy REIT has provided strong guidance on NOI and NDCF for the next year at the midpoint. Therefore, a BUY rating is maintained with a target price of Rs 405/share, implying an upside of 11% from the current market price (CMP).

We maintain our BUY recommendation on the stock.

We have maintain BUY rating on the stock

We have BUY on the stock.

The Embassy has achieved the annual leasing guidance in just 9 months. Recommendation: BUY

Mindspace Business Parks REIT (MREIT) delivered a steady performance in Q2FY24 with both revenue and NOI increasing 7% QoQ to INR6.0bn and INR4.9bn, respectively. Overall portfolio occupancy as of Sep’23 was at 83.8% (decline of 310bps QoQ) owing to fresh exits of 0.3msf and acquisition of Porur, Chennai asset of 0.24msf which has higher vacancy.

We have BUY on stock

The Embassy Office Parks REIT (Embassy REIT) delivered a stable performance in Q2FY24 with NOI of INR7.2bn (decline of 3% QoQ) and NDCF of INR5.2bn or INR5.5/unit. During the quarter, while gross leasing of 2.0msf was healthy, fresh exits of ~1msf mainly by third party IT/ITeS service providers led to same-store occupancy declining by 200bps QoQ to 85%.

Nexus REIT clocked 18% LTL (like-to-like) consumption growth across its urban consumption centres (malls) in Q1FY24 with footfalls up 10% YoY and balance growth from high spend per customer. We expect Nexus’ NOI CAGR of 10.4% over FY23-26E to INR18.8bn on expected ramp-up in occupancies in existing assets, annual rental escalations and mark-up of leases that are expiring.

Company Outlook & Guidance: The distribution growth did not flow through due to higher interest costs and the refinancing of zero-coupon bonds.

The Embassy Office Parks REIT (Embassy REIT) delivered a resilient performance in Q1FY24 with NOI of INR7.4bn (up 8% QoQ) and NDCF of INR5.1bn or INR5.4/unit. During the quarter, the REIT manager achieved 1.1msf of leasing and expects to achieve 6.0msf of gross leasing in FY24.

Mindspace Business Parks REIT (MREIT) delivered a steady performance in Q1FY24 with both revenue and NOI increasing 5% QoQ to INR5.6bn and INR4.6bn, respectively. Overall portfolio occupancy as of Jun’23 was at 86.9% (increase of 350bps QoQ) with committed occupancy at 88.8% (flat QoQ).

We initiate coverage on Nexus Select Trust (Nexus) REIT with BUY rating based on Mar’24E DCF-based target price of Rs126/share. As of Dec 31, ’22, Nexus owns and operates 17 Grade A urban consumption centres or retail malls with total leasable area of 9.2msf, two complementary hotel assets (354 keys) and three office assets (1.3msf).