July 25, 2024: Embassy Office Parks REIT has leased 1.9 million square foot (msf) across 22 deals at 11% leasing spreads, according to the results reported by the company for the first quarter ended June 30, 2024. Global Capability Centres (GCCs) remain the primary drivers of demand and contributed 70% of the quarter’s leasing activity. According to an official release, Bangalore’s Occupancy was at 90%, while Mumbai and Chennai recorded occupancy of 99% and 95%, respectively. Three office parks recorded 100% occupancy – Embassy GolfLinks in Bangalore, Embassy 247 and FIFC in Mumbai and Embassy Galaxy in Noida recorded 99% occupancy.
The company grew revenue from operations and Net Operating Income (NOI) for the commercial office segment by 4% YoY. It raised debt of Rs 1,450 crore at an average rate of 8.06%; Rs 18,000 crore debt book remains highly competitive at 7.8% average cost.
The Board of Directors of Embassy Office Parks Management Services (‘EOPMSPL’), Manager to Embassy REIT, at its Board Meeting, declared a distribution of Rs 531 crore or Rs 5.60 per unit for Q1 FY2025. This is an increase of 4% YoY and 7% QoQ. The record date for the Q1 FY2025 distribution is August 02, 2024, and the distribution will be paid on or before August 09, 2024, according to the release.
Embassy REIT has completed the acquisition of Embassy Splendid TechZone, a premium business park of around 5 msf in Chennai. It has launched 0.9 msf office block redevelopment at Embassy Manyata in Bengaluru with 3x increase in leasable area, at a potential 20% yield on cost. Further, it has a development pipeline of 8.6 msf with a total capital investment of Rs 4,600 crores, expected to add around Rs 1,000 crore to NOI upon stabilisation. According to company’s SEZ strategy, 3.4 msf is denotified since April’23, 0.8 msf demarcated to non-processing areas, with 65% of space already leased.
Aravind Maiya, chief executive officer of Embassy REIT, said, “We leased 1.9 msf this quarter, marking a 70% YoY increase, and we have a strong pipeline across Bangalore, Noida and Chennai. We are excited to strengthen our partnership with one of our largest occupiers through a new redevelopment project at Embassy Manyata, a testament to our best-in-class office solutions. Our distributions have grown 4% YoY, and we crossed the 100k unitholder mark this quarter, a 25x increase since our listing. We’re seeing a lot of tailwinds in our business, and we are focused on sustaining this momentum and delivering value to all our stakeholders.”
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