Embassy REIT: Embassy REIT plans to invest over Rs 3,200 crore in four years

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Embassy REIT plans to invest more than Rs 3,200 crore in developing 7.1 million square feet over the next 3-4 years, Vikaash Khdloya, CEO of Embassy REIT, told ET. The pipeline, 80% of which is under development in Bengaluru, is expected to add more than Rs 800 crore to its net operating profit once stabilised.

“Our balance sheet with low leverage of 26%, an attractive cost of debt of 7.1% and with over two-thirds of the portfolio fixed rate debt, and headroom of Rs 11,200 crore we very well positioned to fund our growth initiatives,” Khdloya said.

The REIT has also signed non-binding offer letters for the purchase of two office buildings from Embassy Sponsor and its subsidiaries in Bengaluru and Chennai.

The properties offer a total of 7.1 million square feet of leasable area, of which 3.7 million square feet are completed or nearing completion.

“In addition to generating new leases at premium rents, we are focused on accelerating growth through on-campus development and accretive acquisitions. We remain focused on prudently financing any acquisition to deliver value added to our unitholders as our prior acquisition of Embassy TechVillage totaling 9.2 msf has demonstrated in the past,” Khdloya said.

The REIT has evaluated the Invitation to Right of First Offer (ROFO) for the 5 million square foot Embassy Splendid TechZone, Chennai, from the sponsor of the Embassy. The company is also planning to acquire a 2.1 million square foot office development at the Embassy Business Center in Bengaluru.

Embassy Office Park REIT said it leased 1.6 million square feet of space in 27 deals in the quarter ending September, including a 500,000 square foot pre-commitment from ANZ to Embassy Manyata . The REIT added 15 new high-growth tenants in sectors such as cloud, cybersecurity, renewable energy and health technology, and also expanded its customer base.

“Earlier on April 22, we set an ambitious rental target of 5 msf for fiscal year 2023, and we remain at or ahead of our guidance, having already achieved approximately 70% of our rental guidance,” said said Khdloya.

Embassy REIT expects the Indian office market to remain highly differentiated from other global office markets, given India’s dual structural advantage as the world’s unrivaled factory of tech talent, combined with significantly higher rents. lower.

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