Embassy Office Parks REIT declined 2.01% to Rs 440.12 after the company announced Q3 results after market hours on Friday, 14 February 2020.
Revenue from operations for Q3 December 2019 grew year-on-year (YoY) by 14% to Rs 545.90 crore. Net operating income for Q3 December 2019 grew YoY by 16% to Rs 463.90 crore. Net operating income margin for Q3 December 2019 was 85%, reflecting scale efficiencies and low manager fees.The quarter was marked by strong leasing, delivery of under-construction blocks ahead of schedule and completion of first acquisition since listing.
Commenting on the quarterly results, Michael Holland, chief executive officer of Embassy REIT said, "Our office portfolio continues to deliver. In 2019, leasing across the Indian markets crossed a record 60 million square feet (msf), again underlining the strength of India's office sector as the leading office absorption market globally. We continue to capitalize on this occupier demand, driven by international corporations, through consistent leasing, early delivery of our accretive development pipeline, commencement of additional on-campus office developments and the acquisition of additional area to support further growth at our largest business park."
The company said it raised Rs 1640 crore debt at 9.03%. Its balance sheet continues to be conservatively levered with net debt to TEV (total enterprise value) at 12% as of 31 December 2019, it added.
The company's portfolio occupancy increased to 95.1% as on 31 December 2019, an increase of 220 bps year-on-year and 40bps quarter-on-quarter. New leasing for Q3 December 2019 was c.527k sf with a strong forward pipeline of c.500k sf.
The company said it delivered c.1.4 msf of office space ahead of schedule with 44% pre-committed to occupiers. It launched next phase of growth with an additional c.2.6 msf of on-campus projects. The firm said it acquired 0.6 msf leasable area within the overall Embassy Manyata business park in Bengaluru, at 9.25% initial yield on development completion in Q4 FY23.
The board of directors of Embassy Office Parks Management Services, Manager to Embassy REIT, declared a distribution of Rs 470.7 crore or Rs 6.1 per unit for Q3 December 2019. The cumulative distribution for year to date FY20 totals Rs 17.5 per unit. The record date for the distribution is 24 February 2020 and the distribution will be paid on or before 29 February 2020.
Embassy Office Parks REIT is a private office park portfolio which engages in communities within its parks and delivers a productive environment for its occupiers. It operates in business parks in Bangalore, Pune, Mumbai and NCR. Fortune 500 companies such as JP Morgan, Google and Microsoft form a part of its 160 marquee tenant base. Today, it is the single largest private office park portfolio in India, spread out over 33 million sq.ft. of operational business parks and city-centric assets and 13 million sq.ft. is ongoing and future development.
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