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Embassy Office Parks REIT reported 3% increase in net-operating-income to INR 757.5 crore for Q1 FY25. The board declared a INR 531 crore distribution, or INR 5.60 per-unit. Leasing activity rose 70% YoY, totaling 1.9 million sq. ft. Key areas like Bengaluru, Noida, Chennai show strong demand, driven by Global Capability Centres. The company reaffirmed its NOI guidance of INR 3,210-3,350 crore for FY25. The portfolio includes 51 million sq. ft. across major cities, with strategic amenities like hotels and a solar park. Debt raised totaled INR 1,450 crore at an 8.06% rate.
Embassy Office Parks REIT, India's first publicly listed Real Estate Investment Trust and the largest office REIT in Asia by area, reported a 3% increase in net operating income (NOI) for the June 2024 quarter, reaching INR 757.5 crore. This is up from INR 737.6 crore in the same period last year. The Board of Directors of Embassy Office Parks Management Services Pvt Ltd, which manages Embassy REIT, declared a distribution of INR 531 crore, equivalent to INR 5.60 per unit, for the first quarter of FY25. This distribution will be paid on or before August 9, 2024, with a record date of August 2, 2024. Advertisement
CEO Aravind Maiya highlighted the strong performance, noting that the REIT leased 1.9 million square feet in the quarter, a 70% year-on-year increase. This robust leasing activity is supported by a solid pipeline across key markets such as Bengaluru, Noida, and Chennai. Global Capability Centres (GCCs) were significant drivers of this demand, accounting for 70% of the quarter's leasing activity.
Embassy REIT's portfolio includes 51 million square feet of space, with 37.7 million square feet of completed operating area, housing 258 leading global companies. The portfolio spans major cities including Bengaluru, Mumbai, Pune, the National Capital Region (NCR), and Chennai, and features strategic amenities such as four operational business hotels, two under-construction hotels, and a 100 MW solar park supplying renewable energy to tenants.
The company has also strengthened its relationship with one of its largest occupiers through a redevelopment project at Embassy Manyata in Bengaluru, which aims to triple the leasable area and achieve a potential 20% yield on cost. Embassy REIT also completed the acquisition of Embassy Splendid TechZone, a premium business park in Chennai, adding approximately 5 million square feet to its portfolio.
Occupancy rates are strong across its properties, with Bengaluru at roughly 90%, Mumbai at 99%, and Chennai at 95%. Notably, Embassy GolfLinks in Bengaluru, Embassy 247, and FIFC in Mumbai, and Embassy Galaxy in Noida boast 100% and 99% occupancy rates, respectively.
In financial terms, the company has raised INR 1,450 crore in debt at an average rate of 8.06%, maintaining a competitive average cost of 7.8% for its INR 18,000 crore debt book. Embassy REIT has also launched a 0.9 million square feet office block redevelopment at Embassy Manyata in Bengaluru, supported by a strong development pipeline of 8.6 million square feet and a total capital investment of INR 4,600 crore. This pipeline is expected to contribute approximately INR 1,000 crore to NOI upon stabilisation.
For the fiscal year 2024-25, Embassy REIT reaffirmed its NOI guidance of INR 3,210-3,350 crore and distribution guidance of INR 22.4 to INR 23.1 per unit, reflecting an anticipated 10% growth in NOI and a 7% increase in distribution per unit year-on-year at the midpoint of the guidance range. Additionally, the company has made significant progress in its SEZ strategy, denotifying 3.4 million square feet since April 2023 and demarcating 0.8 million square feet to non-processing areas, with 65% of this space already leased.
Embassy REIT's ongoing commitment to sustaining business momentum and delivering value to stakeholders is underscored by its impressive growth in unitholders, which has increased 25-fold since its listing, surpassing the 100,000 mark this quarter.
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