Embassy REIT Sees Strong Profit Growth

Embassy REIT Posts Impressive Net Profit in Q2 FY25

New Delhi – Embassy Office Parks REIT, one of the leading real estate investment trusts in India, has reported a net profit of Rs 1,530.35 crore during the quarter ended September 30, 2024. This marks a significant increase compared to the profit of Rs 216.67 crore recorded in the same quarter of the previous fiscal year.

Steady Growth in Revenue

During Q2 FY25, Embassy REIT’s revenue from operations and net operating income (NOI) experienced a 12% year-on-year growth. The revenue from operations reached Rs 997 crore, while the NOI amounted to Rs 805 crore. This growth reflects the resilience and strength of Embassy REIT in the current market.

Furthermore, the company successfully raised Rs 2,000 crore in debt at an interest rate of approximately 7.95%. The funds raised will be primarily used to refinance the upcoming maturity of non-convertible debentures (NCDs).

Distribution Announcement

In a recent declaration, the board members of Embassy Office Parks Management Services, which manages Embassy REIT, announced a distribution of Rs 553 crore or Rs 5.83 per unit for Q2 FY25. This distribution includes interest, dividends, and the repayment of SPV level debt.

Leasing Activity and Outlook

Embassy REIT demonstrated its robustness in the market by leasing 2.1 million square feet of office space in Q2 FY25. Out of these, 1.3 million square feet account for new leases, while 0.4 million square feet consist of lease renewals. The leasing activity achieved rent reversions of 71%, showcasing the attractiveness of Embassy REIT’s office spaces to potential tenants.

For the first half of FY25, Embassy REIT successfully leased four million square feet. Consequently, the company decided to raise its leasing guidance for the fiscal year from 5.6 million square feet to an impressive 6.5 million square feet. This revision illustrates the company’s confidence in meeting its leasing targets.

Aravind Maiya, the CEO of Embassy REIT, expressed satisfaction with the company’s achievements. “With a record 4 million square feet of leasing in the first half of FY25, and a robust pipeline for the rest of the year, we are pleased to revise our leasing guidance upwards to 6.5 million square feet.”

Gross Asset Value and Restructuring

As of September 2024, Embassy REIT’s gross asset value rose by 12% year-on-year to Rs 59,104 crore, highlighting the remarkable growth of the company. Additionally, the net asset value recorded a growth of 4.3% to reach Rs 415.84 per unit.

Moreover, the board of directors has approved the restructuring of Quadron Business Park, Manyata Promoters, the SPV, and Holdco of Embassy REIT, aimed at consolidating similar assets under each Special Purpose Vehicle (SPV) to enhance strategic alignment and long-term operational efficiency.

In Conclusion

Embassy Office Parks REIT has posted an impressive net profit and maintained its solid growth trajectory despite the challenging economic climate. With consistent revenue growth, successful leasing activities, and remarkable asset value appreciation, Embassy REIT continues to solidify its position as a premier real estate investment trust in India. The company’s consistent performance and strategic initiatives bode well for its future prospects in the market.

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