ICICI Securities research report on Embassy Office Parks REIT
The Embassy Office Parks REIT (Embassy REIT) delivered a stable performance in Q2FY24 with NOI of INR7.2bn (decline of 3% QoQ) and NDCF of INR5.2bn or INR5.5/unit. During the quarter, while gross leasing of 2.0msf was healthy, fresh exits of ~1msf mainly by third party IT/ITeS service providers led to same-store occupancy declining by 200bps QoQ to 85%. The REIT manager has upped its FY24 leasing guidance to 6.5msf (earlier 6.0msf) and expects recovery in leasing decisions by GCCs and possible floor-wise SEZ denotification on the cards in H2FY24. We retain our FY24E DPU estimate of INR21.8/unit (flattish YoY) and believe that a pick-up in leasing and SEZ should flow into NOI and DPU growth from FY25E.
Outlook
We retain our BUY rating with an unchanged Mar’24E NAV based target price of INR390/unit. Key risks are a slower recovery in office leasing and higher portfolio vacancy levels.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
