NEW DELHI: Embassy Office Parks REIT (Embassy REIT) has completed the acquisition of Embassy Splendid TechZone (ESTZ), a grade-A business park in Chennai.
The Rs 1,185 crore acquisition was funded primarily through a debt raise of about Rs 1,200 crore at 8.05% and internal accruals.
This acquisition increases Embassy REIT’s total portfolio by 11% to 50.5 million sq ft. It expects growth from 1.6 million sq ft of on-campus development and 2 million sq ft future development potential.
Aravind Maiya, chief executive officer of the company said, “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. Given our diverse unitholder base and 92% public float, we will consider raising equity for defined purposes, when the markets are more conducive for us to do so.”
Rs 1,185 crore enterprise value is at a 9.2% discount to the average of two independent valuation reports. Accretive by 2% and 0.2% to FY2025 mid-point NOI and DPU guidance, respectively, and accretive to March 2024 NAV by 0.2%, on a proforma basis.
The company expects stable cash flows from 95% occupancy on 1.4 million sq ft completed buildings; leased to occupiers such as Wells Fargo and BNY Mellon, among others
