Embassy Office Parks REIT plans to raise debt as well as equity to finance potential acquisitions as it looks to expand its 33 million sq.ft portfolio--the largest real estate investment trust in Asia by size.
Embassy Office Parks REIT has around 43 million sq.ft of right of first offer (ROFO) opportunity to acquire from its sponsor Embassy Property Developments Pvt. Ltd.
The REIT said on Monday that it has received a ROFO invitation from Embassy Property Developments for the potential sale of about 8.7 million sq ft of completed and under-construction office space in Embassy Tech Village, Bengaluru.
Embassy Property’s ROFO notice states the intention to potentially sell 6.2 million sq ft of completed office space and 2.5 million sq.ft of under-construction area in Embassy Tech Village, a large office park in Bengaluru’s Outer Ring Road.
The 6.2 million sq.ft in Embassy Tech Village would be valued at around ₹6,000-6,500 crore, according to analyst estimates.
“The REIT has a strong balance sheet and as and when we make acquisitions, we will raise either debt or equity from investors on an opportunistic basis," said Mike Holland, chief executive officer (CEO), Embassy REIT.
Holland said the REIT is likely to acquire large scale business parks and high quality assets and not standalone office buildings.
Blackstone Group Lp and Embassy Property are sponsors to REIT that was launched earlier this year and is also India’s first listed REIT.
A ROFO is a contractual obligation held by the rights holder to buy an asset before the owner tries to sell it to someone else. If the rights holder is not interested in the asset, the owner can sell it to a third party.
Other than the Embassy ROFO, the REIT is also in talks to buy assets from other real estate developers, who are looking to monetize their commercial portfolio, said Vikaash Khdloya, deputy CEO and chief operating officer, Embassy REIT.
The Embassy REIT has a variety of assets which are owned by Blackstone and Embassy, including individually owned properties as well as those which they jointly own. Embassy Tech Village is currently not part of the REIT and would significantly expand the size of the REIT portfolio if included.