Embassy REIT Raises ₹1,200 Crore Debt to Acquire 50 Lakh Sq Ft Business Park in Chennai

Embassy Office Parks REIT has successfully completed the acquisition of a 50 lakh square feet business park in Chennai. The acquisition, valued at ₹1,185 crore, was funded through a debt raise of ₹1,200 crore along with internal accruals.

Embassy Splendid TechZone Acquisition:

Embassy REIT's newly acquired property, known as Embassy Splendid TechZone (ESTZ), is a Grade-A business park located in Chennai. The park boasts 1.4 million square feet of completed buildings, with an additional 1.6 million square feet under construction and 2 million square feet earmarked for future development.

Financial Details:

The ₹1,185 crore acquisition was predominantly financed through a debt raise of around ₹1,200 crore. Aravind Maiya, CEO of Embassy REIT, emphasized that while issuing equity was considered for funding, the decision to opt for debt and internal accruals was made to benefit all stakeholders. He also indicated that the company might consider raising equity for specific purposes when market conditions are favorable.

Portfolio Expansion:

This acquisition marks Embassy REIT's entry into the Chennai office market, further diversifying its portfolio, which now totals 50.5 million square feet across key Indian cities including Bengaluru, Mumbai, Pune, and the National Capital Region (NCR). Prior to this, Embassy REIT managed 45.4 million square feet of commercial assets.

High Occupancy and Revenue Potential:

Embassy Splendid TechZone features a high occupancy rate, with 95% of the 1.4 million square feet of completed space leased to prominent multinational companies such as Wells Fargo and BNY Mellon. This stable occupancy ensures a steady cash flow. Additionally, the park holds significant growth potential with 1.6 million square feet under construction and a future development potential of 2 million square feet.

Diversified Portfolio:

Embassy REIT's comprehensive portfolio includes 36.5 million square feet of completed operational area, four operational business hotels, two under-construction hotels, and a 100 MW solar park providing renewable energy to tenants.

The strategic acquisition of Embassy Splendid TechZone underscores Embassy REIT's commitment to enhancing its portfolio with high-quality assets in prime locations, thereby ensuring long-term value for its stakeholders.

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