Accumulate Brookfield India Real Estate Trust Ltd for the Target Rs 312 By Geojit Financial Services Ltd
Strong Distributions Ahead...
Brookfield India REIT, managing 7 Grade-A assets across Delhi, Mumbai, Gurugram, Noida, and Kolkata. The Brookfield India REIT portfolio consists of 26msf of total leasable area, comprising 21msf of operating area.
• In Q3FY25, revenue surged 13% YoY owing to a 16% YoY increase in in-place rent (Rs. 96/sf.) and better occupancies.
• Net operating income for the quarter improved 17% YoY, however NOI margin contracted 168bps YoY. • Gross leasing for the quarter stood at ~1.13msf, comprising of ~0.9msf new leasing and 0.2msf renewals.
• At the end of the quarter, committed occupancy stood at 87%, marking 500 bps and 770 bps growth on a QoQ and YoY basis, respectively.
• Distribution for the quarter stood at Rs. 4.90 (+3% YoY vs. +7% QoQ).
• During the quarter, Brookfield successfully completed QIP of Rs. 35Bn. with an additional issue of 128 Mn. units.
Outlook & Valuation
We remain optimistic on Brookfield India REIT on the back of strong growth in distribution due to 1) escalations in in-place rentals, 2) better occupancies (management guides occupancies to reach 89% by March 2025), 3) completion of ongoing projects, and 4) inorganic growth supported by recent QIP proceeds, which brings in LTV headroom. Further, the ongoing interest rate downcycle would bring down the finance cost, leading to higher NDCF. Considering all these factors, we retain our Accumulate rating on the stock with a revised target price of 312 based on 15x Dec’27E DPU, implying a TER of 15% (7% distribution yield and 8% capital appreciation).
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