Embassy REIT’s net operating income up 36% in Q1FY22

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July 29, 2021 1:30 AM

Ongoing construction on 5.7 MSF development projects, with 1.1 MSF JP Morgan campus targeted for handover by year-end. The second wave of Covid induced disruptions in April-June impacted project delivery timelines by 1 quarter.

A strong balance sheet allows Embassy to pursue growth opportunities for its unitholders, he added.A strong balance sheet allows Embassy to pursue growth opportunities for its unitholders, he added.

Bengaluru-based Embassy Office Parks REIT on Wednesday reported a 36% year-on-year (y-o-y) growth in its net operating income (NOI) at Rs 621 crore during Q1FY22. Revenues grew 43% on an annual basis to Rs 738 crore during the same period.

The company declared a distribution of Rs 535 crore, or Rs 5.64 per unit, for the April-June quarter this fiscal. Of this, Rs 4.51 per unit or 80% of the distribution is tax-free for unitholders. Ebitda grew 36% y-o-y to Rs 601 crore in Q1 FY22, while Ebitda margins fell to 81% from 87% a year ago.

“Having delivered to guidance in FY21, Embassy REIT continued its strong performance through Q1 despite the challenges of the recent lockdown. Notwithstanding that, the global megatrends towards technology growth will benefit us as we see record hiring and investments in technology and captives housed in India,” Embassy REIT CEO, Michael Holland said.

With effective vaccine rollouts and a clear desire from business leaders to get their employees back to Embassy’s high-quality workplaces, the company is optimistic for the future. A strong balance sheet allows Embassy to pursue growth opportunities for its unitholders, he added.

Embassy REIT collected over 99% of office rent across its 32.3 million sq ft (MSF) office portfolio. It achieved a stable portfolio occupancy of 89% with successful rent increases of 13% on 2.2 MSF across 32 leases in Q1 FY22, representing 100% of scheduled escalations. The firm is on track for 14% rent escalations due on 5.5 MSF of office space across 57 leases in FY22.

During the June quarter, the company inked 5.45 lakh sq ft of total lease-up across 9 deals, comprising of 1.61 lakh sq ft of new lease-up at 17% re-leasing spread and 3.84 lakh sq ft of renewals at 10% renewal spread. It is in discussions on lease-up of 1.5 lakh sq ft.

Ongoing construction on 5.7 MSF development projects, with 1.1 MSF JP Morgan campus targeted for handover by year-end. The second wave of Covid induced disruptions in April-June impacted project delivery timelines by 1 quarter.

Embassy REIT’s board approved fundraising of up to Rs 4,600 crore via rupee-denominated, listed, rated, secured/unsecured, redeemable, transferrable non-convertible debentures in one or more tranches. It raised Rs 1,200 crore debt at 7.4% interest cost and refinanced Rs 520 crore leading to 80 bps saving in Q1 FY22.

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