Embassy Office Parks REIT reported results today for the second quarter ended September 30, 2024. Aravind Maiya, chief executive officer of Embassy REIT, said, “We are delighted to report one of our best quarters across the business, reflecting the strength and momentum in our portfolio. With a record 4 msf of leasing in the first half of FY2025, and a robust pipeline for the rest of the year, we are pleased to revise our leasing guidance upwards to 6.5 msf.
We’ve seen our occupancy grow to 90% (by value) this quarter, and with a very healthy 12% growth in both revenue and NOI, we continue to solidify our position as the home for leading corporates that prefer large, integrated office ecosystems. Our focus on delivering world-class office spaces has cemented our market leadership in India’s commercial real estate sector, and we remain committed to delivering value to our stakeholders, with distributions continuing to grow.”
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 553 crores or Rs 5.83 per unit for Q2 FY2025. The record date for the Q2 FY2025 distribution is October 29, 2024, and the distribution will be paid on or before November 06, 2024.
Business Highlights
Leased 2.1 msf across 24 deals, including 1.3 msf of new leases and 0.4 msf of renewals at 71% rent reversions
Global Capability Centers (GCCs) accounted for around 50% of the leasing activity this quarter, with Bengaluru leading the demand, contributing to 77% of the total quarterly leasing activity
Portfolio occupancy continues on an upward trend, reaching 90% by value and 87% by area. Bengaluru, Mumbai, and Chennai each boast over 90% occupancy
Strengthens REIT Leadership Team – Amit Shetty, currently Head of Leasing has been promoted to Chief Operating Officer, and Rishad Pandole, co-Head of Commercial Leasing, has been elevated to Head of Leasing
Financial Highlights
Grew Revenue from Operations and Net Operating Income (NOI) by 12% YoY to ₹997 crores and ₹805 crores, respectively
Distributed Rs 553 crores or Rs 5.83 per unit, up 5% YoY and 4% QoQ
Raised Rs 2,000 crores debt at ~7.95% to refinance upcoming NCDs maturity, which saw strong participation from mutual funds and banks
Based on independent valuation as of September ‘24, the REIT’s Gross Asset Value increased by 12% YoY to ₹59, 104 crores, and Net Asset Value by 4.3% to ₹415.84 per unit
Operational & Growth Highlights
Delivered 0.6 msf office block at Embassy Manyata in Bengaluru, 100% pre-leased to global banking major, ANZ
Active development pipeline of 8 msf with an expected yield on cost of 19%. All projects are located in Bengaluru and Chennai, two of the top three Indian cities for absorption and rent growth
Hotel portfolio performed strongly with a 14% increase in occupancy year-on-year to 67%, all the three Hilton hotels at ~70% occupancy