June 3, 2024: Embassy Office Parks REIT, India’s first listed REIT and the largest office REIT in Asia by area, announced today that it has completed the acquisition of Embassy Splendid TechZone (‘ESTZ’), a Grade-A business park in Chennai. The Rs 1,185 crore acquisition was funded primarily through a debt raise of Rs 1,200 crore and internal accruals. This acquisition increases Embassy REIT’s total portfolio to 50.5 million square foot (msf), positions it as one of the largest office REITs globally and marks its entry into the new growth market of Chennai.
Aravind Maiya, chief executive officer of Embassy REIT, said, “We are pleased to announce the completion of this accretive acquisition that facilitates the REIT’s entry into Chennai, one of India’s leading office markets. With this acquisition, we’re delighted to add another premium business park that perfectly complements and strengthens our high-quality office portfolio. While we evaluated funding this acquisition by issuing equity, we decided to finance it through debt and internal accruals, in the best interest of all our stakeholders. Given our diverse unitholder base and 92% public float, we will consider raising equity for defined purposes, when the markets are more conducive for us to do so.”
As per an official release, accretive by 2.0% and 0.2% to FY2025 mid-point NOI and DPU guidance, respectively, and accretive to Mar’24 NAV by 0.2%, on a proforma basis* Rs 1,185 crore Enterprise Value is at a 9.2% discount to the average of two independent valuation reports.
Transaction financed primarily through debt at 8.05% and internal accruals. The company recorded stable cash flows from 95% occupancy on 1.4 msf completed buildings; leased to marquee multinational occupiers such as Wells Fargo and BNY Mellon, among others. It witnessed embedded growth from 1.6 msf of on-campus development and 2.0 msf future development potential. The company enhances its commercial portfolio by 11% to 50.5 msf, positioning the REIT as one of the largest office REITs worldwide
*Basis FY2024 actuals, NOI and DPU accretion is 2.2% and 0.23% respective
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