Sunday, June 16News That Matters

Embassy REIT Reports Strong Operating and Financial Results for 2Q FY2024

: Delivers Record 2 Million Square Feet of Total Leases and Raises Leasing Guidance for FY2024

  • Thursday, October 26, 2023 5:11PM IST (11:41AM GMT) Bengaluru, Karnataka, India:

  • Highest ever quarterly leasing of 2 msf across 25 deals including 7 new deals over 100k sf
  • Strengthens partnership with large global tech occupier for ~600k sf office space at Embassy GolfLinks, Bengaluru
  • Raises leasing guidance for FY2024 from a record 6.0 msf to 6.5 msf; On-track with FY2024 NOI and distribution guidance
  • 90%+ occupancy levels across 50% of the REIT’s properties with Embassy 247 in Mumbai 100% occupied
  • Delivers distributions of Rs 524 crores or Rs 5.53 per unit
  • 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 second quarter ended September 30, 2023.
 Aravind Maiya, Chief Executive Officer of Embassy REIT, said, “We’re delighted to report a record quarter of leasing of 2 msf. For the first half of FY2024, we have successfully leased 3.1 msf, and the outlook for the full year looks promising, bolstered by a record leasing pipeline of 2.5 msf. We’re also very pleased to further strengthen our long-standing partnership with one of our largest clients at Embassy GolfLinks, a testament to our commitment to provide best-in-class workspaces to our occupiers. This coupled with the strong leasing momentum in the business, has resulted in a revised leasing guidance of 6.5 msf for FY2024 from the earlier announced 6 msf.”

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 Rs 524 crores or Rs 5.53 per unit for Q2 FY2024. The record date for the Q2 FY2024 distribution is November 03, 2023, and the distribution will be paid on or before November 10, 2023.

Business Highlights  Leased record 2 msf across 25 deals including 1.2 msf of new leases; Signed 7 new deals over 100k sf reflecting a return of large deal closures

  • Significant demand from Global Captive Centres (GCCs) accounting for over 70% of total leasing activity
  • Bengaluru and Mumbai led the demand, contributing 90% of the total leasing in the quarter; 90%+ occupancy levels across 50% of our properties with Embassy 247 in Mumbai 100% occupied

Financial Highlights  Revenue from Operations grew by 4% YoY to Rs 889 crores

  • Delivered distributions of Rs 524 crores or Rs 5.53 per unit, marking the 18th consecutive quarter of 100% payout
  • Achieved lowest 121 bps spread over G-Sec and secured first-time participation from pension funds in the Rs 1,000 crores new NCD issuance; Strong balance sheet with lowest average cost of debt in the industry at 7.4% and dual AAA/Stable credit ratings
  • Operational & Development Highlights
 Delivered 1 msf new office tower in Bengaluru; 7.1 msf total development portfolio of which ~90% is in Bengaluru, expected to yield around 20% return on cost spends
  • Hospitality business continued to perform strongly with 52% occupancy, 24% YoY ADR growth and an EBITDA of Rs 37 crores; Robust NOI margins of close to 50% at the 3 Hilton hotels
  • Ranked number one in India by GRESB for public disclosures, and awarded a 5-star rating for the entire 45 million square feet office portfolio for the second consecutive year