Embassy REIT to invest Rs 3,200 crore over the next 4 years

25 Oct 2022 , 12:57 PM

According to Vikaash Khdloya, CEO of Embassy REIT, who talked to ET, about Rs 3,200 crore will be invested in the development of 7.1 million square feet over the next three to four years.

Once stabilised, the pipeline, of which 80% is being developed in Bengaluru, is anticipated to increase its net operating income by more than Rs800 crore.

“Our balance structure sets us very well to support our growth plans,” said Khdloya. “Our balance sheet with low 26% leverage, favourable 7.1% debt cost, and with over two-thirds of the debt book at fixed rates.”

Additionally, the REIT has signed non-binding offer letters to purchase two office buildings in Bengaluru and Chennai from Embassy Sponsor and its affiliates.

Leasable space is available throughout the sites for a combined 7.1 million square feet, of which 3.7 million square feet are finished or nearly finished.

The Right of First Offer (ROFO) invitation for the 5 million square foot Embassy Splendid TechZone, Chennai, from the Embassy Sponsor has been under evaluation by the REIT. The company is also considering acquiring a 2.1 million square foot office building in Bengaluru’s Embassy business district.

Park at Embassy Offices In the three months ending in September, the REIT reported leasing 1.6 million square feet of space through 27 transactions, including a 500,000 square foot pre-commitment from ANZ at Embassy Manyata. The REIT increased its customer base and recruited 15 new high-growth tenants in industries like cloud computing, cybersecurity, renewable energy, and healthcare technology.

Given India’s dual structural advantages as the unrivaled digital talent factory of the world combined with much lower leases, Embassy REIT anticipates that the country’s office market will continue to be notably distinct from other international office markets.

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