Embassy REIT’s Impressive Growth: Leasing 1.9 Million Square Feet And Increasing Distributions By 4% YoY in Q1 FY2025

Leases 1.9 msf across 22 deals with 70% of leasing by area driven by Global Capability Centres

Redeveloping 0.9 msf at Embassy Manyata in Bengaluru; leasable area expands 3x with potential 20% yield on cost

Actively developing 8.6 msf; ~70% of next 2 years’ deliveries pre-leased to leading multinationals; potential increase in NOI by ~₹1,000 crores on a stabilized basis

Three office parks at 100% occupancy; Bengaluru, Mumbai, and Chennai properties at ~90%, 99%, and 95% occupancy, respectively; all three markets cumulatively represent 86% by value

Distributes ₹531 crores or ₹5.6 per unit, up 4% YoY and 7% QoQ

BENGALURU: Embassy Office Parks REIT (NSE: EMBASSY / BSE: 542602) (‘Embassy REIT’), India’s first listed REIT and the largest office REIT in Asia by area, reported results today for the first quarter ended June 30, 2024.

Aravind Maiya, Chief Executive Officer of Embassy REIT, said, “We are delighted to report another excellent quarter of strong leasing across our portfolio. 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.”

The Board of Directors of Embassy Office Parks Management Services Private Limited (‘EOPMSPL’), Manager to Embassy REIT, at its Board Meeting held earlier today, declared a distribution of ₹531 crores or ₹5.60 per unit for Q1 FY2025. The record date for the Q1 FY2025 distribution is August 02, 2024, and the distribution will be paid on or before August 09, 2024.

Business Highlights

Leased 1.9 msf across 22 deals at 11% leasing spreads

Global Capability Centres (GCCs) remain the primary drivers of demand and contributed 70% of the quarter’s leasing activity

Bengaluru Occupancy is at ~90%, Mumbai at 99%, and Chennai at 95%. 3 properties at 100% occupancy – Embassy GolfLinks in Bengaluru, Embassy 247, and FIFC in Mumbai. Embassy Galaxy in Noida at 99%.

Financial Highlights

Grew Revenue from Operations and Net Operating Income (NOI) for the commercial office segment by 4% YoY; on track to meet FY25 NOI guidance

Distributed ₹531 crores or ₹5.60 per unit, up 4% YoY and 7% QoQ

Raised debt of ₹1,450 crores at an average rate of 8.06%; c.₹18,000 crore debt book remains highly competitive at 7.8% average cost

Operational & Growth Highlights

Completed acquisition of Embassy Splendid TechZone, a ~5 msf premium business park in Chennai

Launched 0.9 msf office block redevelopment at Embassy Manyata in Bengaluru with a 3x increase in leasable area, at a potential 20% yield on cost

Strong development pipeline of 8.6 msf with a total capital investment of ₹4,600 crores; expected to add approximately ₹1,000 crores to NOI upon stabilization

SEZ strategy on track: 3.4 msf denotified since April’23, 0.8 msf demarcated to non-processing areas, with 65% already leased

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