Embassy Office Parks REIT explores acquisition opportunities

Country's first REIT, Embassy Office Parks REIT, which reported a 19 per cent increase in revenue from operations for the quarter ended June 30 said it will explore acquisition opportunities and continue its focus on completing existing projects. The REIT, which was listed on April 1 of this year, had reported a revenue of Rs 535.1 crore in June quarter driven by continued leasing momentum across the portfolio. The company reported a revenue of Rs 449.4 crore in the corresponding period last fiscal.

Its net operating income for the quarter increased 19 per cent to Rs 452.8 crore as compared to Rs 381.8 crore for quarter ended June 30, 2018 with a margin for the quarter at 85 per cent. The REIT declared a quarterly distribution of Rs 416.7 crore or Rs 5.4 per unit.

"We had a strong start to FY20 with both revenue and net operating income was up 19 per cent YoY. This was achieved through our underlying commitment to provide world class and customised office space solutions to corporate occupiers," Embassy REIT chief executive officer Michael Holland told reporters here on Tuesday. He said there is 8 million sqft, which will get added organically to the REIT portfolio taking it from 25 million sqft to 33 million sqft.

"Apart from this REIT will also look at external acquisition opportunities. We cannot quantify how much we will add, but we are looking at opportunities in cities like Mumbai, Pune, Bengaluru and NCR, where it is already present and add Hyderabad and Chennai cities for inorganic expansion," Holland said. He further said the quarterly performance also reflects the quality and scale of the portfolio, which continues to deliver impressive organic growth.

"We have a strong base of low-volatility assets with significant market-to-market potential, a de-risked development pipeline, and prudent capital management program, he added. Embassy Office Parks deputy chief financial officer said, contracted lease escalations, ramp-up of solar plant at Embassy Energy and an increase in maintenance and other contracted income were the key drivers for the growth.

During the quarter, it raised Rs 3,000 crore through listed non-convertible debentures maturing in June 2022, with a yield to maturity of 9.4 per cent..

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