Embassy Group has announced plans to launch a significant residential portfolio comprising 4 million square feet in the fiscal year 2023-24. The company aims to generate an estimated revenue of Rs 3,300 crore, with a focus on mid-segment residential properties. Additionally, the company plans to reduce project completion time to 3-4 years and diversify assets to reduce their debt, currently standing at Rs 8,800 crore. Embassy Group also expects a robust pipeline in their office space portfolio, particularly in Bengaluru, with the banking sector as the dominant occupant. They hold a stake in WeWork India and aim to raise additional funds while doubling last year's earnings.
Embassy Group, a prominent real estate developer, has unveiled plans to launch a significant residential portfolio encompassing 4 million square feet in the fiscal year 2023-24, with an estimated revenue of Rs 3,300 crore. The company's Chief Operating Officer confirmed their intention to introduce one million square feet of residential space in Chennai alone. With inventories worth over Rs 2,000 crore already compliant with occupation certificate requirements and ready for possession this year, the company aims to collect Rs 3,000 crore in the coming year.
Embassy Group is currently restructuring its residential portfolio, shifting its focus towards the mid-segment market. The ticket size for these properties will be below Rs 2 crore, with apartment costs ranging from Rs 9,000 to 10,000 per square foot. Seeking quicker exits, the company aims to reduce project completion time from 8 years to 3-4 years, in contrast to their luxury segment projects, which generated a revenue of Rs 1,100 crore last year.
While pursuing their mid-segment strategy, Embassy Group also has plans for luxury segment launches. These include a 30-acre villa project in Bengaluru and upcoming launches in Whitefield and Embassy Springs. To reduce their debt, which currently stands at Rs 8,800 crore, the company intends to diversify its assets. This involves selling assets such as the Chennai office park, an asset in Manyata Tech Park, and 1 million square feet in Thiruvananthapuram. Additionally, the company is expanding its office parks, with over 10 million square feet of saleable office portfolio in various stages of development across southern India.
Last year, the Embassy Group leased 5.1 million square feet of office space, generating a revenue of Rs 3,400 crore. This year, they expect a robust pipeline in the office space portfolio, with the banking sector as the dominant occupant of non-special economic zone office spaces in Bengaluru. However, regulatory filings indicate a vacancy of about 4.9 million square feet of office space, with 3.3 million square feet falling under the SEZ segment. The COO highlighted challenges in the SEZ segment, including regulatory issues and delays in closing office deals.
Furthermore, Embassy Group holds a stake in WeWork India, with 73 percent ownership of WeWork India's flex office space. The company aims to raise additional funds and targets doubling last year's earnings before interest, taxes, depreciation, and amortization (EBIDTA) of Rs 240 crore to Rs 400-500 crore this year.
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