Embassy REIT to invest ~2,300 cr in office space

Blackstone-backed Embassy Office Parks REIT on Friday announced an investment of ~2,300 crore to construct 5.7 million square feet (msft) of office space over the next three years.

“As there’s a supply side reduction in the overall market because of liquidity crunch, we see this as an opportunity in markets such as Bengaluru,” said Embassy REIT Deputy Chief Executive and Chief Operating Officer Vikaash Khdloya.

The REIT on Friday reported a 15 per cent decline in its consolidated net profit to ~214.8 crore for the third quarter ended December against ~253.5 crore in the year-ago period. Total income, however, rose to ~595.94 crore from ~568.12 crore, according to a regulatory filing. While net operating income increased 3 per cent to ~478 crore for the quarter, operating margin for Asia’s largest REIT by area stood at 85 per cent. Lease deals signed for the quarter was 311,000 sq ft, with 1 million sq ft lease deals signed year-to-date. The firm said it was seeing green shoots in leasing space and would gain full momentum in the next 23 quarters.

“As India’s outlook steadily improves with a continued downward trend in active Covid-19 cases and the encouraging progress on vaccine rollout, we remain optimistic that Indian office leasing demand will continue to increase as occupiers accelerate their return-to-work programmes,” said Michael Holland, chief executive officer of Embassy

“ABOUT 97% OF OCCUPIERS AND A DAILY AVERAGE OF 20,000 EMPLOYEES OPERATED FROM OUR PROPERTIES IN Q3, UP 27% SINCE Q2” MICHAEL HOLLAND Chief executive officer, Embassy REIT

REIT. While the company achieved rental increases of 15 per cent on 1.5 msft during the quarter, rent collections for the period from office occupiers remained strong at 99.5 per cent. “About 97 per cent of occupiers and a daily average of 20,000 employees operated from our properties in Q3, up 27 per cent since Q2,” said Hollande.

The REIT completed the acquisition of ~9,780-crore Embassy Tech Village (ETV) in December and successfully raised ~3,680 crore through an institutional placement to fund the acquisition. It launched 1.9 msft of on-campus office development at ETV. It is looking at large-scale dominant office spaces in top six cities, including Bengaluru, Pune and Chennai, for inorganic expansion.