Embassy REIT records highest H1 leasing ever, revises guidance to 6.5 million sq ft for FY25

Bengaluru: Embassy Office Parks REIT, the first listed real estate investment trust (REIT) in India and the largest office REIT in Asia by area, revised its leasing guidance for fiscal 2025 to 6.5 million sq ft from 5.6million sq ft, citing robust demand from corporate occupiers, including global capability centres (GCCs).

In the second quarter ended September 30, 2024, the company leased 2.1 million sq ft across 24 deals, taking the total for the first half of the fiscal year to a record 4.0 million sq ft. GCCs accounted for about half the leasing activity the past quarter, while Bengaluru contributed 77% to the quarterly leasing activity.

“We are delighted to report one of our best quarters across the business, reflecting the strength and momentum in our portfolio. We have seen our occupancy grow to 90% (by value) this quarter, and with a very healthy 12% growth in both revenue and NOI (net operating income,” said Aravind Maiya, Chief Executive Officer of Embassy REIT.



For the Q2 of FY2025, both revenue from operations and net operating income grew 12% from a year earlier to Rs 997 crore and Rs 805 crore, respectively. Embassy REIT said it raised Rs 2,000 crore debt at 7.95% in the quarter, to refinance maturingnon-convertible debentures, with strong participation from mutual funds and banks.

The REIT’s portfolio occupancy continued on an upward trend, reaching 90% by value and 87% by area. Bengaluru, Mumbai and Chennai each reported more than 90% occupancy. The firm reported over 95% occupancy across half of the REIT's properties, mentioned the release.

During the second quarter, Embassy REIT delivered 0.6 million sq ft of office block at Embassy Manyata in Bengaluru, 100% pre-leased to global banking major ANZ. The company has a development pipeline of 8 million sq ft with an expected yield on cost of 19% in Bengaluru and Chennai.

The board of Embassy Office Parks Management Services, which manages Embassy REIT, declared distribution of Rs 553 crore, or Rs 5.83 per unit, for the second quarter, with a record date of October 29. The distribution date is on or before November 6.

Based on independent valuation as of September 2024, the REIT’s gross asset value increased 12% y-o-y to Rs 59,104 crore, and net asset value by 4.3% to Rs 415.84 per unit, it said.

Embassy REIT owns and operates 14 office parks with 51.1 million sq ft of office space in Bengaluru, Mumbai, Pune, the National Capital Region and Chennai. The portfolio comprises 38.4 million sq ft completed operating area. It assets include four operational business hotels, two under-construction hotels and a 100 MW solar park supplying renewable energy to tenants.