Embassy REIT's net operating income up 30% in Q2 FY22NEW DELHI: Embassy Office Parks REIT (Embassy REIT) reported 30% increase in its net operating income to Rs 624 crore, with 85% NOI margin, the company said in a BSE filing.

Its revenue from operation was Rs 735.20 crore in Q2 FY22, up 36 per cent from Rs 540.10 crore it recorded in the similar quarter last year.

During the quarter, it raised Rs 4,600 crore debt at 6.5% to refinance existing zero-coupon bond, delivering significant c.300 bps interest savings

Embassy REIT maintained balance sheet with low leverage of 24% and Rs 12,000 crore debt headroom to finance growth, according to the media release.

According to its investor presentation, it collected over 99% of office rents on 32.3 million sq ft operating portfolio, absorption witnessed a rebound with 8 million sq ft taken up in Q2, 48% higher than Q1. Bengaluru led office absorption and contributes over 50% of active pan-India RFPs

Michael Holland, chief executive officer of Embassy REIT, said, “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.”

The board of directors of Embassy Office Parks Management Services (EOPMSPL), manager to Embassy REIT declared a distribution of Rs 537 crore or Rs 5.66 per unit for Q2 FY22. Of this, Rs 4.52 per unit or 80% of distributions are tax-free for unitholders.

According to the company, it saw total lease-up of 7.13 lakh sq ft across seven deals, achieved 20% leasing spreads and portfolio occupancy of 89% and construction is in full swing on 5.7 million sq ft projects, with 1.1 million sq ft JP Morgan campus on track for handover by year-end.

The total lease-up of 7.13 lakh sq ft comprised of 1.69 lakh sq ft new lease-up at 13% re-leasing spread and 5.44 lakh sq ft renewals at 21% renewal spread. NCSI Tech leased 46,000 sq ft and CitiusTech rented 32,000 sq ft in Embassy Qubix, Employtech leased 43,000 sq ft in Embassy TechVillage and Rockwell Automation leased 25,000 sq ft in Embassy TechZone during the said quarter.

The board of directors declared net asset value of Rs 388.26 per unit for Embassy REIT based on the valuation report dated October 25, 2021 issued by iVAS Partners, represented by Manish Gupta, partner with value assessment services undertaken by CBRE South Asia.

Overall covid situation continues to improve, uptick in number of corporate preparing to ramp-up back-to-office programs. About 10% of employees operating from our properties, a 1.6x uptick in September 2021 vs June 2021, the company said in its investor presentation.

Embassy REIT achieved rent escalations of 15% on 1.4 million sq ft across 22 leases in Q2, representing 100% of scheduled escalations. It is on track for 14% rent escalations due on 4.1 million sq ft across 35 leases in FY22.





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