CMP: ₹340

CMP: ₹289.71

Brookfield India REIT portfolio has been impacted by dislocations in the commercial real estate market (uncertainty regarding DESH Bill, Covid induced work from home and build-up in supply over the past 2 years on account of lower leasing) however our recent management interactions/site visits indicate early signs of reversals.

The key monitorable over here remains the physical occupancy which has inched upwards to 50 per cent (8 per cent in Jan’22; steady increase in all months) and is likely to head towards 60% by year end. Secondly, clarity with regards to SEZ area and DESH Bill is expected by mid-Q4FY23 which is likely to drive leasing in SEZ area.

Thirdly, tenant expansions plans which were on-hold, are firming up and BIRET assets remain a preferred choice in the respective micro-markets. Presently, BIRET has a NDCF guidance of INR 20.25 per unit for FY23 (INR 10.2 achieved in 1HFY23) and remains on track to meet it. A possible equity dilution to fund purchase of 6.4msf of completed assets remains an optionality.

We maintain BUY rating with a Sep’23 TP of ₹340. At the current juncture, risk-reward looks favourable to us.

Key risks: Slow pickup across commercial markets.

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