CEO’s MessageHigh Quality Work Environments for Sustainable Growth

Dear Unitholders,I am pleased to present to you our report for our first year since the listing of Brookfield India Real Estate Trust. It is a narrative of our resilience and of the agility with which we moved forward, capitalizing on the emerging opportunities, and demonstrating strong operational and financial results.

Our REIT portfolio largely benefits from the rising demand for high quality and sustainable workspaces with modern amenities in prime locations. The return to office trend, coupled with the expansion plans of the global IT/ITeS industry is the primary drivers of this demand, which is also reflected in the healthy leasing momentum that we have witnessed across our assets this year. With India’s emergence as the largest outsourcing market globally, tenants are now looking for workspaces which are integrated, foster employee health and wellbeing and are conducive to encouraging a collaborative work culture. Our credentials as a trusted global player with local expertise and an enhanced focus on technological upgrades, innovation and ESG position us to steer the flight to quality journey of leading corporates in the years ahead.

Delivering Across Performance Metrics

I am proud to announce that we have achieved our stated growth objectives in the first year since listing. Our progress is highlighted by our efforts to deliver long-term sustainable value to our stakeholders by incorporating strategic enablers and optimizing the use of capital to drive organic and inorganic growth. We exited FY2022 with gross leasing of 1.6 M sf across our assets, including 1.2 M sf of new leasing and 0.4 M sf of renewals. We also signed expansion options of 0.3 M sf during the year. We have witnessed 9% average escalation on 2.8 M sf of leased area1 while rental collections remained strong at 99%.

We have delivered an attractive total return of 27%2 to our unitholders, including a stable yield of 8% since IPO. This has been enabled by robust organic growth and the accretive acquisition of Candor TechSpace N2, which has led to our operating area increasing by 35%. This acquisition has also resulted in a 4% improvement in our Effective Economic Occupancy and supported our efforts to diversify our tenant base. We have delivered 0.8 M sf across assets, including the 0.7 M sf IGBC Platinum rated Tower 11 in Candor TechSpace N2, and are also undertaking various asset upgrades and initiatives to improve our tenants’ experience across campuses.

Our current inorganic growth pipeline of 6.4 M sf of fully built properties puts us in the ideal spot for further increasing our scale and operating income. Our identified asset, Candor TechSpace G1, a 3.7 M sf fully operational campus, achieved 333,000 sf of new leasing in FY2022. Also, the Sponsor Group has initiated a carve-out of the rent generating assets in Powai Business District, comprising 2.7 M sf of leasable area and having a committed occupancy of 89%.

1Including Candor TechSpace N2 for the full year
2Based on the closing unit price of ₹328.03 on June 15, 2022 on the NSE

Raising the Bar

India’s transforming commercial real-estate landscape has led to a dynamic change in the way large corporates are looking at office parks to navigate their growth journey. At Brookfield India REIT, we have adopted a strategic approach, reimagining our assets to become a talent attraction and retention tool. The quality and resilience of our earnings drivers and differentiators set us apart with well amenitized ecosystems and flexible workplace solutions. We continue to drive strong organic growth to achieve the results that keep us ahead of the competition. We have upscaled our technological strength and upgraded our campuses to make them safer, more environment-friendly and collaborative, where our tenants can become the best version of themselves. We are committed to implementing industry-leading, sustainable development to deliver long-term value to our business, partners, and communities. We have augmented our efforts to decarbonize our assets with 6% energy reduction and promote water conservation measures in pursuance of our goal to make our campuses Net-Zero by 2050.

As an extension of our commitment, I am happy to share that Kensington is now operating with 100% green power through the Renewable Energy Guarantee of Origin (REGO) certificate for its common areas. We remain on track to receive our first GRESB score (a leading global benchmark for ESG reporting) for FY2022. The various awards and ratings received by our campuses during the year also endorse the success of our initiatives on ESG, innovation and technology. This further validates our stringent adherence to regulatory compliances as we continue to set new benchmarks of operational excellence across key metrics and processes at our campuses.

Looking Ahead

As India’s only institutionally managed REIT, we are positive about the outlook for the coming months at the back of visible tailwinds in the macro environment. While we have set new benchmarks for the industry in 2021, most of the benefits from the current environment will be realized in the future, supporting our continued sector-leading growth. We are seeing limited new supply in the REIT micro-markets over the next three years. While these micro-markets constitute 13% of India’s office stock, they are expected to account for only 7% of the upcoming supply in the country

Meanwhile, the technology and allied industries, which are the mainstay of our office demand, continue to evolve with sustained double⁠-⁠digit hiring. Our strong embedded organic growth, as well as a significant pipeline of inorganic growth opportunities, will drive our efforts to harness this emerging opportunity

Before I conclude, let me take this opportunity to thank the team at Brookfield India REIT for supporting us in our efforts to lead the ongoing transformation in the business eco-system. I would also like to thank our tenants and other stakeholders for their sustained confidence in our REIT. Together, we shall continue to effectively steer and surge ahead through this voyage on which we have collectively embarked.


Alok Aggarwal Chief Executive Officer

Manager of Brookfield India REIT