Target: ₹280
CMP: ₹245.78
Brookfield India REIT (BIRET) reported a subdued quarter with overall committed occupancy declining to 80 per cent (82 per cent in Q1-FY24) as expiries (851K sqft) outpaced leasing (476K sqft). Accounting for income support at the Candor N2 asset and Candor G1 asset, the effective economic occupancy also decreased to 88 per cent (89 per cent in Q1-FY24).
In Aug’23, BIRET completed the acquisition of Downtown Powai and Candor Techspace G1 in an equal partnership with GIC. This acquisition has increased its scale, further diversified its tenant base and improved GAV by 74 per cent to ₹28,500 crore (as on September 30).
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Going forward, the management is confident it will achieve positive net leasing by Q1-FY25 and a distribution of ₹5 per unit from Q3-FY24. Furthermore, with income support at N2 coming to an end in Mar’24, leasing will be a key monitorable at this asset in H2-FY24. We revise our estimates and maintain a BUY rating with an unchanged Sept-2024 target price of ₹280 (23.6 per cent total return; 15.7 per cent capital appreciation; 7.9 per cent dividend yield).