Embassy Office Parks REIT (Embassy REIT) has reported robust financial results for the quarter ending March 31, 2024, with a net consolidated profit after tax of INR 2,834.14 crore and total income exceeding INR 9,922.26 crore, driven by strong leasing activity. The company leased a record 8.1 million square feet of office space, primarily to Global Capability Centers (GCCs). They distributed dividends totaling INR 2,022 crore for FY24 and project leasing out 5.4 million square feet in FY25, with expected dividend distributions of INR 22.40 to INR 23.10 per unit. Additionally, they plan to acquire Embassy Splendid TechZone in Chennai and raise up to INR 3,000 crore through an institutional placement to support future growth initiatives. With strong occupancy rates in key markets like Bengaluru and Mumbai, Embassy REIT remains poised for continued success and growth in the Indian REIT sector.
Embassy Office Parks REIT (Embassy REIT), a leading player in the market, has reported strong financial results for the quarter ending March 31, 2024. This performance, coupled with their expansion plans, positions them for continued growth.
Embassy REIT's net consolidated profit after tax for the quarter reached INR 2,834.14 crore, reflecting a significant increase compared to the previous year. Their total income grew by over 10% to INR 9,922.26 crore. This growth is driven in part by their impressive leasing activity. The company leased a record 8.1 million square feet of office space in the last quarter, exceeding their initial guidance by 35%. This strong demand was primarily driven by Global Capability Centers (GCCs), which accounted for over 65% of their annual leasing activity of 99 deals.
The company is committed to rewarding its unitholders. For the financial year 2024, they distributed dividends totaling INR 2,022 crore, or INR 21.33 per unit. Looking ahead, they project leasing out 5.4 million square feet of space in FY25 and expect to maintain dividend distributions in the range of INR 22.40 to INR 23.10 per unit.
Embassy REIT is not resting on its successes. They recently announced the proposed acquisition of Embassy Splendid TechZone (ESTZ) in Chennai for an enterprise value of up to INR 1,269 crore. This strategic move marks their entry into a new market and signifies their confidence in the potential of the Chennai office space sector. Additionally, they plan to raise up to INR 3,000 crore through an institutional placement, which will further strengthen their financial position and support future growth initiatives of up to INR 3,000 crore.
Embassy REIT maintains strong occupancy rates in its existing portfolio, with Bengaluru and Mumbai boasting occupancy rates of 91% and 99% respectively. These two key markets represent about 86% of their total asset value. Their development pipeline of approximately 6.1 million square feet in Bengaluru is expected to generate yields of 20%, highlighting the continued demand for high-quality office space.
Aravind Maiya, Chief Executive Officer of Embassy REIT, remarked on their strong performance and commitment to driving growth for their stakeholders. Maiya stated that their record leasing activity and expansion plans position them for continued success in the Indian REIT market.
Embassy REIT's strong financial performance, impressive leasing activity, and strategic expansion plans solidify their position as a leader in the Indian REIT sector. Their commitment to growth and focus on new markets position them to capitalize on future opportunities and deliver value to their investors. Their strong hotel portfolio also shows promise, with a 6% year-on-year increase in occupancy and an annual EBITDA of INR 184 crore.
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