Embassy REIT’s net operating income up 30% y-o-y in Q2 FY22

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October 30, 2021 12:15 AM

The company declared a distribution of Rs 537 crore or Rs 5.66 per unit for Q2 FY22. Of which, Rs 4.52 per unit or 80% of distributions are tax-free for unit holders. Record date for distribution is November 10, 2021 and the distribution will be paid on or before November 13.

It is also in discussions on lease-up of 5 lakh sq ft.It is also in discussions on lease-up of 5 lakh sq ft.

Embassy Office Parks REIT on Friday reported a 30% year-on-year (y-o-y) growth in its net operating income (NOI) at Rs 624 crore during the July-September quarter. Revenue grew 36% on an annual basis to Rs 735 crore during the same period.

The company declared a distribution of Rs 537 crore or Rs 5.66 per unit for Q2 FY22. Of which, Rs 4.52 per unit or 80% of distributions are tax-free for unit holders. Record date for distribution is November 10, 2021 and the distribution will be paid on or before November 13.

The Bengaluru-based company’s Ebitda grew 28% y-o-y to Rs 605 crore, while Ebitda margin contracted to 85% from 88% a year ago. It collected over 99% rent across its 32.3 million sq ft (MSF) of office portfolio. It achieved a stable portfolio occupancy of 89% with 15% rent increases on 1.4 million sq ft (MSF) across 22 leases.

“We delivered our strongest leasing activity since the start of the pandemic, we successfully completed a significant Rs 4,600 crore debt raise at an impressive 6.5% interest rate and we received global recognition for our continuing commitment to sustainability,” Embassy REIT CEO, Michael Holland said.

“We have reconfirmed our full year guidance as we see multiple tailwinds for our business – India’s stabilising Covid situation, a reviving office leasing market especially in our core Bengaluru market, and occupiers’ business-expansion driven by global tech mega-trends. These positive trends are clear to our expanding investor base which has tripled in the last twelve months,” he noted.

During the September quarter, Embassy REIT inked 7.13 lakh sq ft of total lease-up across 7 deals and achieved 20% leasing spreads. This includes 1.69 lakh sq ft of new lease-up at 13% re-leasing spread and 5.44 lakh sq ft of renewals at 21% renewal spread. It is also in discussions on lease-up of 5 lakh sq ft.

The firm achieved rent escalations of 15% on 1.4 MSF across 22 leases in Q2 FY22, representing 100% of scheduled escalations. On track for 14% rent escalations due on 4.1 MSF across 35 leases in FY22. Construction is in full swing for 5.7 MSF of development projects of the company, and the 1.1 MSF JP Morgan campus at ETV is on-track for handover by year-end

On demand trends, the firm said that leasing momentum is likely to rebound in 2022 with Bengaluru leading pan-India office recovery. Technology sector and global captive centres will drive office recovery. Large occupiers are initiating expansion/ consolidation plans and next year could witness strong recover.

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