New Delhi: Buoyed by demand for premium workspace, Embassy Office Parks REI will invest Rs 3,800 crore over the next four years to complete its ongoing office complexes as part of its strategy to expand rental portfolio.
Embassy REIT, which is India's first publicly listed real estate investment trust (REIT), currently has 36.5 million (365 lakh) square feet of completed office space across Bengaluru, Mumbai, Pune and Delhi-NCR.
Arvind Maiya, CEO of Embas REIT, said in an interview that the company's business is continuously growing strongly.
To expand its portfolio, he said the company is building 6.1 million (6 lakh) square feet of premium office space in Bengaluru to meet the growing demand from global capacity centers (GCCs) and domestic players.
Additionally, Maiya said the company has signed an agreement to purchase Embassy Splendid TechZone (ESTZ), a grade-A business park, from sponsor Embassy Group at an enterprise value of Rs 1,269 crore.“We are currently building 6.1 million square feet at grade. An office space, which will be completed in the next four years,” he said.
Asked about the total cost of construction of this 6.1 million sq ft space, he said, "We have already invested some amount. The pending construction cost to complete these office buildings is estimated to be around Rs 3,800 crore " Is.,
The company will finance the planned investment primarily through debt.
He said that out of the 6.1 million square feet, 2.5 million (25 lakh) square feet will be constructed this financial year, 2.2 million (22 lakh) square feet will be constructed in 2025-26, 0. million (4 lakh) square feet will be constructed Will be done in 2026-27. And the remaining 1 million (10 lakh sq ft) in financial year 2027-28. When asked about the acquisition of new properties in Chennai, Maiya said that I am hopeful that this deal will be completed by the end of next month.
Business Park ESTZ has a total area of 1.4 million (14 lakh) square feet, 95 per cent of which has been leased to large global companies such as Wells Fargo and BNY Mellon.It also includes 1.6 million (16 lakh) square feet under construction and 2 million (20 lakh) square feet of future development potential.
Embassy REIT plans to raise up to Rs 2,500 crore for this acquisition to reduce its leverage and further expand the business.
The operational portfolio is likely to grow from the current 36.5 million sq ft to 40.5 million sq ft through organic and organic routes in the current financial year. On the performance of the last financial year, Maiya said, “Overall, FY24 was really good with the growth in revenue and net operating income (NOI) being around 8 per cent year-on-year.”
The occupancy level has stabilized at 85 percent, he said.The company achieved gross leasing of 8.1 million square feet last year, its highest ever.
Noting the positive outlook on the Indian office market, Maiya said the company has given guidance for 2024-25 of total leasehold of 5.4 million sq ft. The board of directors of Embassy Office Parks Management Services, the manager of Embassy REIT, announced a distribution of Rs 495 crore or Rs 5.22 per unit for Q4 FY24.
With this, the cumulative disbursement for the entire 2023-24 totals Rs 2,02 crore or Rs 21.33 per unit.
In addition to office spaces, Embassy REIT also has four operational commercial hotels, two under-construction hotels and a 100 MW solar park supplying renewable energy to tenants.
Embassy REIT, which is India's first publicly listed real estate investment trust (REIT), currently has 36.5 million (365 lakh) square feet of completed office space across Bengaluru, Mumbai, Pune and Delhi-NCR.
Arvind Maiya, CEO of Embas REIT, said in an interview that the company's business is continuously growing strongly.
To expand its portfolio, he said the company is building 6.1 million (6 lakh) square feet of premium office space in Bengaluru to meet the growing demand from global capacity centers (GCCs) and domestic players.
Additionally, Maiya said the company has signed an agreement to purchase Embassy Splendid TechZone (ESTZ), a grade-A business park, from sponsor Embassy Group at an enterprise value of Rs 1,269 crore.“We are currently building 6.1 million square feet at grade. An office space, which will be completed in the next four years,” he said.
Asked about the total cost of construction of this 6.1 million sq ft space, he said, "We have already invested some amount. The pending construction cost to complete these office buildings is estimated to be around Rs 3,800 crore " Is.,
The company will finance the planned investment primarily through debt.
He said that out of the 6.1 million square feet, 2.5 million (25 lakh) square feet will be constructed this financial year, 2.2 million (22 lakh) square feet will be constructed in 2025-26, 0. million (4 lakh) square feet will be constructed Will be done in 2026-27. And the remaining 1 million (10 lakh sq ft) in financial year 2027-28. When asked about the acquisition of new properties in Chennai, Maiya said that I am hopeful that this deal will be completed by the end of next month.
Business Park ESTZ has a total area of 1.4 million (14 lakh) square feet, 95 per cent of which has been leased to large global companies such as Wells Fargo and BNY Mellon.It also includes 1.6 million (16 lakh) square feet under construction and 2 million (20 lakh) square feet of future development potential.
Embassy REIT plans to raise up to Rs 2,500 crore for this acquisition to reduce its leverage and further expand the business.
The operational portfolio is likely to grow from the current 36.5 million sq ft to 40.5 million sq ft through organic and organic routes in the current financial year. On the performance of the last financial year, Maiya said, “Overall, FY24 was really good with the growth in revenue and net operating income (NOI) being around 8 per cent year-on-year.”
The occupancy level has stabilized at 85 percent, he said.The company achieved gross leasing of 8.1 million square feet last year, its highest ever.
Noting the positive outlook on the Indian office market, Maiya said the company has given guidance for 2024-25 of total leasehold of 5.4 million sq ft. The board of directors of Embassy Office Parks Management Services, the manager of Embassy REIT, announced a distribution of Rs 495 crore or Rs 5.22 per unit for Q4 FY24.
With this, the cumulative disbursement for the entire 2023-24 totals Rs 2,02 crore or Rs 21.33 per unit.
In addition to office spaces, Embassy REIT also has four operational commercial hotels, two under-construction hotels and a 100 MW solar park supplying renewable energy to tenants.
