K Raheja Corp-backed Mindspace Business Parks REIT has raised over Rs 100 crore through an issue of commercial papers, the first ever such issue by a real estate investment trust in India after the capital market regulator the Securities & Exchange Board of India (SEBI’s) approved the use of this instrument by REITs earlier this year.

The REIT has raised the short-term funds at an interest rate of 7.2% per annum for a maturity of three months. The funds will be utilised for the working capital requirements of Mindspace REIT’s asset special purpose vehicles.

In September, SEBI allowed REITs and Infrastructure Investment Trusts (InvITs) to raise funds through issuance of commercial papers. This move provided an additional avenue for fund raising exercises of REITs through shorter tenor instruments at a potentially lower interest cost and swifter timelines.

“After successfully exploring capital market fund raising through issuance of multiple debentures, we are glad to be the first Indian REIT to raise funds through Commercial Papers. This is part of our larger strategy to diversify our lender base and optimise borrowing costs and maturity profile of our well-staggered debt book,” said Vinod Rohira, CEO, Mindspace Business Parks REIT.

According to him, as part of the REIT’s larger ESG commitment, it will also explore opportunities to raise funds through issuance of green bonds.

With this issue, Mindspace REIT has broadened its debt profile further. At the time of its IPO, in August 2020, 100% borrowings of Mindspace REIT were in the form of bank borrowings at the asset’s special purpose vehicle level.

Over the last two years, Mindspace Business Parks REIT has diversified its lender portfolio and reduced its borrowing costs through multiple fixed-cost debenture issuances that are primarily subscribed by mutual funds, pension funds and insurers.

Mindspace Business Parks REIT, sponsored by K Raheja Corp, listed on the Indian bourses in August 2020. The REIT owns office portfolios located in four key office markets of India including Mumbai Metropolitan Region (MMR), Pune, Hyderabad, and Chennai.

The REIT's portfolio has a total leasable area of 31.9 million sq ft and consists of five integrated business parks and five independent office assets. It has a diversified tenant base, with over 185 tenants as of September end.