Embassy REIT Acquires Chennai Business Park for Rs 1,200 Cr

Bengaluru, Jun 3 (PTI) Embassy Office Parks REIT has completed the acquisition of a 50 lakh square feet business park in Chennai for Rs 1,185 crore as part of its strategy to expand its office assets portfolio and grow business.

The acquisition was funded through a debt of Rs 1,200 crore.

In a regulatory filing on Monday, Embassy REIT informed that it has completed the acquisition of 'Embassy Splendid TechZone (ESTZ), a Grade-A business park in Chennai. The business park has 1.4 million square feet of completed buildings, besides under-construction area of 1.6 million square feet and 2 million square feet of future development potential.

"The Rs 1,185 crore acquisition was funded primarily through a debt raise of around Rs 1,200 crore and internal accruals," it added.

This acquisition increases Bengaluru-based Embassy REIT's total portfolio to 50.5 million square feet.

Aravind Maiya, Chief Executive Officer of Embassy REIT, said the completion of this accretive acquisition facilitates the REIT's entry into Chennai, one of India's leading office markets.

"With this acquisition, we are delighted to add another premium business park that perfectly complements and strengthens our high-quality office portfolio. While we evaluated funding this acquisition by issuing equity, we decided to finance it through debt and internal accruals, in the best interest of all our stakeholders," he added.

Given its diverse unitholder base and 92 per cent public float, Maiya said the company would consider raising equity for defined purposes when the markets are more conducive to doing so.

The company highlighted that the business park in Chennai has a stable cash flow from 95 per cent occupancy on 1.4 million square feet of completed buildings that are leased to marquee multinational occupiers such as Wells Fargo and BNY Mellon, among others.

"Embedded growth from 1.6 million square feet of on-campus development and 2 million square feet future development potential," it said.

Prior to this acquisition, Embassy REIT, which is India's first publicly listed Real Estate Investment Trust, owned and operated 45.4 million square feet of commercial assets in Bengaluru, Mumbai, Pune, and the National Capital Region (NCR).

Embassy REIT's portfolio comprises 36.5 million square feet of completed operating area. It also has four operational business hotels, two under-construction hotels, and a 100 MW solar park supplying renewable energy to tenants.