Embassy REIT Announces First Quarter FY2020-21 Results and Quarterly Distributions of ₹4,499 million

Embassy Office Parks REIT (NSE: EMBASSY / BSE: 542602) ('Embassy REIT'), India's first listed REIT and the largest in Asia by area, reported results today for the first quarter ended June 30, 2020.

The Board of Directors of Embassy Office Parks Management Services Private Limited ('EOPMSPL'), Manager to Embassy REIT, at its Board Meeting held earlier today, declared a distribution of ₹4,499 million or ₹5.83 per unit. The record date for the distribution is August 14, 2020, and the distribution will be paid on or before August 21, 2020.

Mike Holland, Chief Executive Officer, said, "Amidst challenging market conditions, we are pleased to report a resilient set of results this quarter, marked by robust office rental collections, a healthy distribution payout, and our strong financial position. Embassy REIT continues to enable our occupiers to operate while keeping their employees safe. We remain well positioned to meet the anticipated increase in demand over the coming quarters for institutional grade office space, and to capitalize on the continued consolidation in office market given considerable future supply shrinkage."

Business Highlights

- Rental collections from office occupiers remained robust at 98.9%, with office rental collections at 99.2% for April 2020, 99.3% for May 2020 and 98.2% for June 2020 (as of August 5, 2020)

- Portfolio occupancy remained healthy at 92.2% on our 26.2 msf operating office portfolio, with same-store occupancy of 94.1%

- Leases signed for the quarter stood at 526k sf, including 201k sf of new leases at market rents, and 325k sf of renewals at 20% spreads to existing rentals

- Achieved rental increases of 14% on 1.8 msf from 22 office leases across portfolio

Financial Highlights

- Net Operating Income was ₹4,569 million, up 1% year-on-year mainly due to resilient commercial office revenues despite adverse impact of COVID-19 pandemic on the hospitality business

- Net Operating Income margin stood at 88%, up 400 bps year-on-year reflecting efficiencies of scale and rigorous expense management

- Distributions stood at ₹4,499 million or ₹5.83 per unit, representing a 100% payout ratio

- Balance sheet remains strong, with ample liquidity and low leverage of 16% Net Debt to TEV; existing cash and undrawn committed facilities totals ₹12.6 billion, and only 1.3% of total debt maturities till FY2022

Business Continuity Update

- Our priority remains delivering a safe workplace and business ecosystem for our occupiers and their employees; a daily average of 13,000 employees are operating from our properties across India

- Our properties remained open and complied with all government regulations to support the business continuity of our occupiers; over 90% of our 160+ corporate occupiers continue to operate their core business functions from our properties across India

- Our operations team continues to actively engage with occupiers to support their 'Return to Workplace' strategies

- Resumed construction activity on our 2.7 msf of ongoing on-campus development as well as operations on our 477 key operating hotels in June 2020 post lifting of lockdown restrictions

Source : Equity Bulls

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