Buy Embassy Office Parks REIT; target of Rs 429: ICICI Securities

ICICI Securities research report on Embassy Office Parks REIT

Embassy Office Parks REIT’s (Embassy REIT) overall portfolio occupancy, as of Dec’24, was 87% – including infusion of 1.4msf Splendid Techzone, Chennai asset of 1.4msf from 1 Jun’24. Driven by a combination of filling up of SEZ vacancy, office leasing momentum and pre-leased assets, we estimate portfolio occupancy of >90% by FY26E, resulting in FY25E DPU of INR 22.5/unit vs. INR 21.3/unit in FY24 with FY26E DPU of INR 26.6/unit. The REIT manager has guided for 6.5msf of total leasing and expects 10% NOI and 7% DPU growth in FY25.

Outlook

We reiterate our BUY rating with an unchanged TP of INR 429 based on 1x Mar’26E NAV. At CMP of INR 366, we estimate distribution yield of 7.3% in FY26E.