Embassy Office Parks REIT on Thursday reported 12 per cent growth in net operating income to Rs 2,032 crore and distribution of Rs 1,836 crore to unitholders during the last financial year despite the COVID-19 pandemic.
Embassy REIT expects office demand to be muted over the next 2-3 quarters but sees strong recovery thereafter on pent-up demand.
The Board of Directors of Embassy Office Parks Management Services Pvt Ltd, Manager of Embassy REIT, declared a distribution of Rs 530.8 crore or Rs 5.6 per unit for the quarter ended March.
The cumulative distribution for FY2021 totals Rs 1,836.4 crore or Rs 21.48 per unit, which is on target with the guidance issued earlier by the management, the company said in a statement.
Embassy REIT CEO Michael Holland said, "Despite the significant challenges caused by the COVID-19 pandemic, Embassy REIT has again performed strongly and delivered on its financial guidance". Despite the second wave headwinds, he said, its global clients/occupiers continue to report strong earnings and hiring growth.
This will translate into demand for quality offices in due course, Holland said.
"With our leading presence in India''s highest absorption markets, our low leverage levels and our access to capital markets, we are well-positioned to capitalise on the fundamental global demand for Indian office space that will long outlast this pandemic," he added.
Embassy reported stable occupancy of 88.9 per cent with strong rent collections at 99.8 per cent on a 32.3 million sq ft operating portfolio.
When contacted, Vikaash Khdloya, Deputy CEO & COO, Embassy Office Parks Management Services, said the company is focusing on completing the ongoing development of 57 lakh sq ft of office space.
Of this, he said, 11 lakh would be operational by September this year and space have already been pre-leased to J P Morgan.
The remaining 46 lakh sq ft will be completed in 2- 3 years, Khdloya said.
"Despite pandemic, our financial performance has been resilient. Demand will be muted in the next 2-3 quarters," he said.
However, Khdloya said the long term outlook for the premium office space remains bullish.
"Office is here to stay. There will be some flexibility of work from home for employees," he noted.Khdloya said people started to return to office during the January-March quarter but the second wave has again halted the process.