Global investor Blackstone-sponsored Embassy REIT on Tuesday reported a 10 per cent rise in net income to Rs 461.8 crore for the quarter ended March 31, mainly on the back of increase in revenue from operations and reduction in expenses.
Embassy Office Parks REIT, India's first real estate investment trust, which was listed in April 2019, reported an eight per cent growth in total income at Rs 543.4 crore.
The board of Embassy Office Parks declared a distribution of Rs 531.67 crore or Rs 6.89 per unit for its unitholders for the quarter ended March.
Together with distributions already made during the three previous quarters, the distributions for full year ended March 31, 2020, total to Rs 1.882.1 crore or Rs 24.39 per unit.
"Despite the challenging times that we are in today because of COVID-19, we have delivered strong performance during the quarter and declared a dividend of Rs 531.67 crore, which is a 100 per cent distribution for the quarter," its Chief Executive Officer Michael Holland told reporters during an online media conference.
For the whole year 2019-20, the company's total income rose 14 per cent to Rs 2,144.9 crore, while the net operating income grew by 15 per cent to Rs 1,817 crore.
"We delivered a total return of 25 per cent for the full year. Our performance during the quarter and year once again illustrates the stability and resilience of Embassy REIT delivering cash flows that are backed by the covenants of our more than 160 largely multinational occupier base," he said.
Holland further said the increase in the net income for the year was a result of higher operating income and reduction in operating expenses due to the cost saving measures adopted by the company.
"The performance displays our strong leasing momentum and contracted rental escalation of office leases. We achieved overall occupancy of 92.8 per cent on 26.2 million sqft operating office portfolio, and leased 3.89 lakh sqft new area during the fourth quarter, with full year lease-up of 2.4 million sqft, being the highest absorption in previous five years," he said.
On the impact of COVID-19, Holland said, "While the pandemic has resulted in an uncertain near-term outlook for many businesses worldwide, we are uniquely positioned to weather this pandemic-induced storm with our best-in-class office portfolio and strong balance sheet."
He further noted that while demand is likely to moderate considerably through 2020, Grade-A supply will reduce considerably over the medium term and consolidation in the office market will continue and high-quality institutional landlords, such as Embassy REIT, will gain market share.
On rent collections, Holland said, "While some smaller tenants did negotiate for rentals and we showed leniency for them, most of tenants are large multinationals, so rent collections from office these occupiers remained strong at 92 per cent for the month."
He further said that as per the instructions of the government, the company halted all construction activity and hotel operations, which it will resume once the government eases lockdown restrictions.
Commenting on the results, Vikaash Khdloya, deputy CEO and chief operating officer, said, "The fourth quarter operating performance was resilient, led by business continuity support for our occupiers and employee wellness support. Our immediate focus remains ensuring the health and safety of all our stakeholders as they return to work in our parks."
With around 7.1 million sqft of on-campus development in the pipeline, the total portfolio spans 33.3 million sqft across seven Grade-A office parks and four city-center office buildings in India's best-performing office markets of Bengaluru, Mumbai, Pune and the National Capital Region.
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