Embassy REIT net operating profit up 30% in the second quarter of FY22, Real Estate News, ET RealEstate

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

Its operating income was Rs 735.20 crore in the second quarter of FY22, up 36% from the Rs 540.10 crore recorded in the same quarter last year.

During the quarter, he raised debt of Rs 4,600 crore at 6.5% to refinance the existing zero coupon bond, resulting in significant interest savings of around 300 basis points.

Embassy REIT maintained its balance sheet with low leverage of 24% and a debt margin of 12,000 crore to fund growth, according to the press release.

According to its presentation to investors, it collected more than 99% of office rents on an operating portfolio of 32.3 million m², absorption rebounded with 8 million m² occupied in Q2, 48% of more than in T1. Bengaluru has led the absorption of offices and contributes over 50% of active Pan-Indian tenders

Michael Holland, CEO of Embassy REIT, said: “We have completed a significant debt increase of Rs 4,600 crore at an impressive 6.5% interest rate and have received worldwide recognition for our ongoing commitment to sustainability.

The Board of Directors of Embassy Office Parks Management Services (EOPMSPL), director of Embassy REIT, declared a distribution of Rs 537 crore or Rs 5.66 per unit for the second quarter of fiscal year 22. Of this amount, Rs 4.52 per unit or 80% of distributions are tax free for unitholders.

According to the company, it has seen a total rental of 7.13 lakh square feet across seven transactions, achieved rental spreads of 20% and portfolio occupancy of 89% and construction is in full swing on 5.7 million projects. square feet, with 1.1 million square feet JP Morgan campus is on track for delivery by year end.

The total rental of 7.13 lakh square feet included 1.69 lakh square feet of new rentals at 13% re-letting gap and 5.44 lakh of square footage renewals at 21% renewal gap. NCSI Tech leased 46,000 square feet and CitiusTech leased 32,000 square feet from Embassy Qubix, Employtech leased 43,000 square feet from Embassy TechVillage and Rockwell Automation leased 25,000 square feet from Embassy TechZone during the said quarter.

The Board of Directors declared a NAV of Rs 388.26 per unit for Embassy REIT based on the valuation report dated October 25, 2021 released by iVAS Partners, represented by Manish Gupta, valuation services partner of value undertaken by CBRE South Asia.

The overall covid situation continues to improve, with an increase in the number of companies preparing to accelerate back-to-office programs. About 10% of the employees operating at our properties, a 1.6-fold increase in September 2021 from June 2021, the company said in its investor presentation.

Embassy REIT achieved rent increases of 15% on 1.4 million square feet on 22 leases in the second quarter, which is 100% of planned increases. He’s on track for 14% rent increases due on 4.1 million square feet on 35 leases in fiscal 22.