Embassy REIT Secures ₹1,200 Crore Loan for Chennai Business Park Acquisition

Embassy Office Parks REIT has successfully acquired a 50 lakh square feet business park in Chennai for ₹1,185 crore, aligning with its strategy to expand its office assets portfolio. The acquisition was financed through a ₹1,200 crore debt.

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

"The ₹1,185 crore acquisition was funded primarily through a debt raise of around ₹1,200 crore and internal accruals," the filing stated.

This acquisition increases Bengaluru-based Embassy REIT's total portfolio to 50.5 million square feet. Aravind Maiya, Chief Executive Officer of Embassy REIT, expressed satisfaction with the acquisition, highlighting that it marks the REIT's entry into Chennai, a leading office market in India.

"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.

Maiya noted that given the company's diverse unitholder base and 92 percent public float, raising equity for defined purposes would be considered when market conditions are favorable.

The business park in Chennai enjoys a stable cash flow with 95 percent occupancy of its 1.4 million square feet of completed buildings, leased to prominent multinational occupiers such as Wells Fargo and BNY Mellon.

"Embedded growth from 1.6 million square feet of on-campus development and 2 million square feet future development potential," the company highlighted.

Before this acquisition, Embassy REIT, 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 includes 36.5 million square feet of completed operating area, four operational business hotels, two under-construction hotels, and a 100 MW solar park supplying renewable energy to tenants.

BS