Home / Companies / Company Results /  Embassy REIT expects demand, leasing rebound in second half FY22

BENGALURU: Embassy Office Parks REIT on Wednesday reported a 36% year-on-year rise in its net operating income to Rs621.3 crore for the June-ended quarter. It declared distribution, including dividend, of Rs534.61 crore to unit holders for the April-June period.

The firm said it collected over 99% of office rent across its 32.3 million square feet operating portfolio.

"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 mega trends towards technology growth will benefit us as we see record hiring and investments in technology and captives housed in India," said Embassy REIT CEO Michael Holland.

With effective vaccine rollout and a clear desire from business leaders to get their employees back to high quality workplaces, the future looks optimistic, Holland said. Embassy REIT said it achieved stable portfolio occupancy of 89% with 13% rent increase on 2.2 million sq ft leases.

The firm has ongoing construction on about 5.7 million sq ft in Bengaluru, Pune, and Noida. A 1.1 million sq ft JP Morgan campus in Embassy Tech Village is targeted for handover by the year end.

Holland, in an interview, said he expects strong pick-up in demand and leasing momentum in the latter half of 2021-22, as supply of good quality office space will remain restrained.

“Demand for new space will be led by global captives across sectors, who have actively leased space in recent years, e-commerce firms who came of age during the pandemic. The tremendous amount of hiring activity by IT and tech firms is also reassuring," he said.

The REIT board on Wednesday also approved fundraising by way of issuance of rupee-denominated, listed, rated, secured/unsecured, redeemable, transferrable non-convertible debentures aggregating up to 4,600 crore in one or more tranches. The funds will be utilized towards refinancing of Series I non-convertible debentures and for general purposes.

"Declared distribution of 5,346.12 million/ 5.64 per unit for the quarter ended June 30, 2021," Embassy REIT said in a regulatory filing.

The distribution comprises 2,379.21 million/ 2.51 per unit in the form of dividend; 1,895.79 million/ 2 per unit in the form of the proceeds of amortisation of SPV (special purpose vehicle) level debt; and 1,071.12 million/ 1.13 per unit in the form of interest, less applicable taxes, if any.

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