Embassy Office Parks REIT leased 1.1 million square feet of commercial space across 22 deals in the quarter ended June 30, the listed real estate developer said in a July 26 regulatory filing.
Net operating income rose 9 percent to Rs 738 crore from a year earlier. The commercial office segment margins were at 85 percent.
The leased space included 407,000 sq. ft at a re-leasing spread of 68 percent and pre-leasing of 448,000 sq. ft at a premium to market rents. Leasing spread is the difference between new rent and the prior expiring rent over the same space.
The company said expansionary demand was strong, with over 80 percent of the new/pre-leasing by existing occupiers and 71 percent by global captive centres (GCCs) across sectors.
“As India continues to be a favoured global investment destination, Embassy REIT’s world-class portfolio continues to attract global multinationals seeking to capitalise on India’s skilled talent pool. Our ability to raise capital to fund our growth initiatives is demonstrated by our repeated debt raises at industry-leading rates," said Aravind Maiya, chief executive officer of Embassy REIT.
Embassy REIT raised non-convertible debentures totalling Rs 2,075 crore at an average rate of 7.8 percent in the quarter.
The company delivered distribution of Rs 510 crore, or Rs 5.38 per unit.
With a leasing pipeline of 2 million sq. feet comprised mainly of GCCs, a clearer interest rate outlook, and focus on optimising its operational and development portfolio, Embassy REIT projected leasing of 6 million square feet and distribution in the range of Rs 20.5 to Rs 22 per unit in FY24, Maiya added.
Stable occupancy
Occupancy at Embassy Manyata, its office property in Bengaluru, touched 91 percent, up from 89 percent in the previous quarter and 87 percent a year earlier.
The company refurbished two buildings totalling 600,000 sq. ft and leased 52 percent at 212 percent leasing spreads.
With an increase in domestic institutional and retail participation, the unitholder register expanded to over 85,000, up from 4,000 at the initial public offering and an 80 percent jump from 47,000 last year.
A REIT is a trust that owns, operates or finances income-producing real estate. It gives investors access to the benefits of real estate investment through publicly traded units.
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