Embassy REIT Announces Q3 FY2022 Results, Raises Full Year Guidance Given Accelerated Leasing Activity

Bangalore, Karnataka, India Friday, January 28, 2022 1:50PM IST (8:20AM GMT)
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, 2021.
Executes 428k square feet leases, raises full year leasing guidance to 1 msf
Grows Net Operating Income by 30% YoY, distributing Rs 493 crores to Unitholders, 83% tax-free
Delivers 1.1 msf JP Morgan campus at ETV, kick-starts next growth cycle with 1.9 msf new development
Raises full year NOI and DPU guidance, reflecting pick-up in new leasing
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, 2021.
Michael Holland, Chief Executive Officer of Embassy REIT, said,“We are delighted to announce another great set of results despite Covid disruptions, once again underscoring the resilience and growth potential of Embassy REIT. We continue to see multiple positive indicators for our business – the uptick in new leasing, our delivery of the 1.1 million square feet (‘msf’) JP Morgan campus, our 4.6 msf of development pipeline, and a 5 msf potential acquisition opportunity in Chennai. Positive leasing momentum gives us the confidence to increase our guidance for the full year FY2022 as we look beyond the external challenges of the past two years. We are excited for the next phase of growth and value creation for our Unitholders through our focused investments in developing, enhancing, and expanding our world-class portfolio.”
Business Highlights
Leased 428k square feet (‘sf’) at 24% spreads across 15 deals, achieved 14% rent increases on 1.8 msf
Raised FY2022 full year guidance for new leasing from 400k sf to 1 msf, already achieved ~700k sf YTD
Added 8 new occupiers including from high-growth sectors such as SaaS, logistics and e-commerce; occupier roster now over 200
Successfully integrated Rs 9,782 crores Embassy TechVillage (‘ETV’) property within a year of acquisition, delivered better than underwriting on a number of metrics
Financial Highlights
Grew Net Operating Income (‘NOI’) by 30% to Rs 621 crores, with operating margin of 84%
Raised FY2022 full year guidance for both NOI and Distribution per Unit (‘DPU’); NOI estimate now up by 3% to Rs 2,450 crores
Raised Rs 4,600 crores at 6.5% to refinance existing zero-coupon bond, delivered significant 300 bps or Rs 130 crores proforma annual interest savings
Maintained strong balance sheet with low leverage of 24% and Rs 11,600 crores debt headroom to finance growth
Growth Initiatives
Delivered 1.1 msf JP Morgan campus at ETV within budget, commenced new growth cycle with 1.9 msf new office development
Continued construction in full swing on 4.6 msf on-campus development projects, labor at sites at peak strength
Received Right of First Offer (‘ROFO’) notice for 5 msf Embassy Splendid TechZone, Chennai from Embassy Sponsor
Launched one of Asia’s largest solar rooftop projects, with over 20 MW scale and over 30% projected IRR; committed to 75% renewable energy by FY2025
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 Rs 493 crores or Rs 5.20 per unit for Q3 FY2022. Of this, Rs 4.32 per unit or 83% of distributions are tax-free for Unitholders. The record date for the Q3 FY2022 distribution is February 07, 2022 and the distribution will be paid on or before February 12, 2022.