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Embassy REIT Reports Net Operating Income At ₹4,780 Mn In Q3

Distributed ₹4,313 million or ₹4.55 per unit for 3Q FY2021 and cumulatively ₹13,056 million or ₹15.88 per unit for YTD FY2021, representing a 100% payout ratio for both the periods

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The Board of Directors of Embassy Office Parks Management Services Private Limited reported results today for the third quarter ended December 31, 2020.

Embassy Office Parks REIT (NSE: EMBASSY / BSE: 542602) (‘Embassy REIT), India’s first listed REIT and the largest office REIT in Asia by area, reported results today for the third quarter ended December 31, 2020.

The Board of Directors of Embassy Office Parks Management Services Private Limited (‘EOPMSPL’), Manager to Embassy REIT, at its Board Meeting held earlier today, declared a distribution of ₹4,313 million for 3Q FY2021.

This translates to a Distribution per Unit (‘DPU’) of ₹4.55 for the third quarter on the expanded unit base of 947.89 million units, post the issuance of 176.23 million new units in December 2020 in connection with the acquisition of Embassy TechVillage (‘ETV’). The record date for the distribution is February 22, 2021 and the distribution will be paid on or before February 27, 2021.

 Michael Holland, Chief Executive Officer of Embassy REIT commented, “This quarter marked another resilient performance for Embassy REIT, as illustrated by our operating performance and distribution to Unitholders. As India’s outlook steadily improves with a continued downward trend in active COVID-19 cases and the encouraging progress on vaccine roll-out, we remain optimistic that Indian office leasing demand will continue to increase as occupiers accelerate their return-to-work programs. Additionally, our recent successful ₹97.8 billion acquisition of Embassy TechVillage in India’s best-performing office sub-market of ORR in Bengaluru cements our position as a landlord of choice for the world’s top companies.”

Financial Highlights

  • Net Operating Income (‘NOI’) for 3Q FY2021 grew year-on-year by 3% to ₹4,780 million and cumulatively by 5% to ₹14,163 million for YTD FY2021, with operating margins of 85% for the quarter and 87% for YTD FY2021
  • Distributed ₹4,313 million or ₹4.55 per unit for 3Q FY2021 and cumulatively ₹13,056 million or ₹15.88 per unit for YTD FY2021, representing a 100% payout ratio for both the periods
  • Raised ₹7.5 billion of listed debentures during 3Q FY2021 at an attractive 6.70% coupon; raised further ₹26.0 billion of listed debentures in Jan’21 at 6.40% coupon primarily to refinance the ETV debt
  • Balance sheet remains strong with low leverage of 23% Net Debt to TEV, liquidity of ₹9.4 billion and additional debt headroom of ₹120 billion

Business Highlights

  • Lease deals signed for 3Q FY2021 stood at 311k sf, with 1.0 msf lease deals signed YTD
  • Achieved 14% spreads on 206k sf re-leased area in 3Q FY2021, with 16% spreads on 450k sf re-leased YTD
  • Achieved rental increases of 15% on 1.5 msf in 3Q FY2021, with YTD rental increases of 13% on 5.3 msf
  • Rent collections for 3Q FY2021 from office occupiers remained strong at 99.5%, in-line with office rent collections of 100% for 1Q FY2021 and 99.9% for 2Q FY2021 (as of February 11, 2021)
  • Portfolio occupancy stood at 90.6% on our enlarged 32.3 msf operating portfolio, with same-store occupancy of 90.5%
  • Ongoing support to occupiers as they bring forward ‘Back to Office’ plans encouraged by vaccine roll-out; 97% of occupiers and daily average of ~20k employees operated from our properties in 3Q FY2021, up 27% since 2Q FY2021

Growth Initiatives

  • Completed ₹97.8 billion ETV acquisition in December 2020 and successfully raised ₹36.8 billion through an Institutional Placement to fund the acquisition
  • Post ETV acquisition, integrated on-ground teams and the 1.1 msf built-to-suit project, initiated restructuring of the 2-tier holdings at the ETV level and refinanced ₹26.4 billion of in-place ETV debt at 328 refinancing bps spread
  • Launched 1.9 msf of new on-campus office development at ETV. Along with the existing 2.7 msf development, organic growth through 5.7 msf on-campus development across portfolio, with 19% area pre-committed to JP Morgan

ALSO READ: Delhi Cooperative Housing Finance Corp Slashes Rate Of Interest On Home Loans

 

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