Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Shareholder Meeting (June 2022)
44 slides from Embassy Office Parks REIT's shareholder meeting presentation, Jun 13, 2022
Slide 1: 4th Annual Unitholders' Meeting
Embassy Office Parks REIT 4th Annual Unitholders’ Meeting June 13, 2022 Hilton Convention Centre, Embassy Manyata Business Park 1
Slide 2: Resilient Year, Positioned for Growth
4th Annual Unitholders’ Meeting Resilient Year, Positioned for Growth LEASING DEVELOPMENT TOTAL BUSINESS ECOSYSTEM Signed 1 msf new leases, achieved 27% Ramped-up construction on 4.6 msf new Launched 619 keys dual-Hilton hotels at leasing spreads across 31 deals build given occupier demand Embassy M
Slide 3: Leasing
1Q FY2022 Earnings Materials Leasing Embassy Quadron, Pune
Slide 4: Pickup in Leasing Activity, Driven by High Growth Occupiers
4th Annual Unitholders’ Meeting Pickup in Leasing Activity, Driven by High Growth Occupiers Achieved 2.2 msf total lease-up at 18% spreads; focused on occupiers from high growth sectors such as SaaS, EV and E-Commerce New leasing focused on high growth occupiers 1 msf New Lease-up at 27% MTM Employt
Slide 5: Embedded Rent Growth
4th Annual Unitholders’ Meeting Embedded Rent Growth Achieved rental spread of 26% on 6.4 msf in last 3 years. On track for additional 14% rent escalations due on 8.2 msf across 68 leases in FY2023 Strong Leasing Performance Embedded Rent Escalations of 14% aids NOI growth Area (msf) 6.4 msf 8.2 7.6
Slide 6: Development
1Q FY2022 Earnings Materials Development Hudson and Ganges Block, Embassy TechZone, Pune
Slide 7: Delivering to Global Occupiers
4th Annual Unitholders’ Meeting Delivering to Global Occupiers Delivered office space to JP Morgan – this 1.1 msf state-of-the-art campus at ETV was completed in Dec’21 despite Covid challenges Note: (1) Apr’22 Picture 7
Slide 8: Investing in Next Growth Cycle
4th Annual Unitholders’ Meeting Investing in Next Growth Cycle Our 4.6 msf on-campus office development helps cater to occupier growth needs Embassy TechVillage – Block 8 (1.9 msf) Embassy Manyata – M3 Block A (1.0 msf) *Perspective Actual Picture Actual Picture Actual Actual Picture Picture Embassy
Slide 9: Total Business Ecosystem
1Q FY2022 Earnings Materials Total Business Ecosystem Flyover at Embassy Manyata, Bangalore
Slide 10: Launched Hilton Hotels at Embassy Manyata
4th Annual Unitholders’ Meeting Launched Hilton Hotels at Embassy Manyata 619 key Hilton hotels complex at Embassy Manyata launched ahead of target. One of India’s leading mixed-use complexes with Convention Centre, Retail and F&B offerings integrated with hospitality. ► Launched India’s largest Mix
Slide 11: Improving Hospitality Outlook
4th Annual Unitholders’ Meeting Improving Hospitality Outlook Rebound in hospitality demand given eased restrictions, ramp-up of corporate travel and pent-up leisure demand Hilton Garden Inn at Embassy Hilton at Embassy GolfLinks Four Seasons at Embassy One Manyata * Perspective 247 Keys 230 Keys 35
Slide 12: Deepening Business Moat
4th Annual Unitholders’ Meeting Deepening Business Moat Continuing investment in infrastructure and amenities deepens business moat and fortifies REIT properties for the next phase of growth South Side Skywalk at Embassy Manyata (WIP, May’22) 1 km long flyover at Embassy Manyata (Delivered, Nov’21)
Slide 13: Acquisitions
4th Annual Unitholders’ Meeting Acquisitions 13 Embassy GolfLinks, Bangalore
Slide 14: Integrated Embassy TechVillage
4th Annual Unitholders’ Meeting Integrated Embassy TechVillage Acquired in December 2020, ETV successfully integrated into REIT’s portfolio. The marquee asset’s occupancy increased by 170 bps to 99%, and the acquisition has performed better than underwriting 14
Slide 15: Add-on Acquisition by GLSP
4th Annual Unitholders’ Meeting Add-on Acquisition by GLSP Completed ₹9.3 bn debt financing to GLSP, REIT’s investment entity, which used proceeds to acquire 0.4 msf area within Embassy GolfLinks campus (‘EGL’) and CAM business for EGL 357k sf 4.7 msf Key Benefits to GLSP Consolidation of addition
Slide 16: Acquisition Opportunity in Chennai
4th Annual Unitholders’ Meeting Acquisition Opportunity in Chennai Evaluating ROFO(1) opportunity received from Embassy Sponsor in relation to Embassy Splendid TechZone asset, a 26-acre business park in Chennai totaling around 5 msf when fully developed Note: (1) Received ROFO intimation on January
Slide 17: ESG
1Q FY2022 Earnings Materials ESG Embassy TechVillage, Bangalore
Slide 18: ESG Vision and Framework – Pillars
4th Annual Unitholders’ Meeting ESG Vision and Framework – 3 Pillars ESG Framework, comprising of 19 specific programs, is driven by our vision to “Reimagine spaces” for a sustainable tomorrow for all our stakeholders Energy and Risk Emissions 1 c Management Water Stewardship Framework Regulatory Co
Slide 19: Green Impetus across Investing, Operations and Financing
4th Annual Unitholders’ Meeting Green Impetus across Investing, Operations and Financing ESG focus and commitment aligned with broader goals of occupiers and investors. ESG leadership position a strong differentiator and long-term advantage Invested in 20+ MW Solar Rooftop, Mar’23 completion Green L
Slide 20: ESG Memberships and Certifications
4th Annual Unitholders’ Meeting ESG Memberships and Certifications Current ESG memberships, certifications and performance on global benchmarks reflect our commitment to sustainability, transparency and operational excellence Past Achievements Current Achievements and Focus Areas Future Plans CSA 20
Slide 21: Launching our Annual ESG Report
4th Annual Unitholders’ Meeting Launching our Annual ESG Report Please scan this QR code to download the report 21
Slide 22: Financials
1Q FY2022 Earnings Materials Financials Embassy TechZone, Pune
Slide 23: Robust Financial Performance
4th Annual Unitholders’ Meeting Robust Financial Performance FY22 NOI and EBITDA up 23% each year-on-year respectively with NOI and EBITDA margins at 84% and 82% respectively FY2022 FY2021 Variance % Remarks (mn) (mn) Revenue from ETV’s 6.1 msf completed area(2) Revenue from Embassy Manyata and
Slide 24: Delivering on Distributions
4th Annual Unitholders’ Meeting Delivering on Distributions Distributions for FY22 stood at ₹20,626 mn i.e., ₹21.76 per unit with 82% being tax-free for Unitholders Distribution Highlights Distribution Mix – FY22 Particulars 4Q FY2022 FY2022 Distribution period Jan’22 – Mar’22 Apr'21 – Mar’22 Intere
Slide 25: ZCB Refinance substantially reduced debt costs
4th Annual Unitholders’ Meeting ZCB Refinance substantially reduced debt costs Successfully raised ₹46 billion NCDs at 6.5% to refinance legacy ZCB at 9.4%, ~300bps or Rs 130 crore proforma annual interest savings Successful ZCB Refinance REIT Debt Composition Raised ₹46 bn coupon bearing debt at
Slide 26: Business Performance and Price Movement
4th Annual Unitholders’ Meeting Business Performance and Price Movement Robust business performance since listing across leasing, delivery and acquisitions. Delivered 53%(5) total returns since listing to period until April 22, 2022 Business Performance since Listing Performance since Listing (5) To
Slide 27: Macro Outlook
1Q FY2022 Earnings Materials Macro Outlook FIFC, Mumbai
Slide 28: Back to Office Ramp-up
4th Annual Unitholders’ Meeting Back to Office Ramp-up Significant ramp-up in park population since Jan’22, ~21% physical occupancy highest since the start of the pandemic Daily Covid Cases (‘000) Latest Physical (‘000) Occupancy - 60k 350 (as of June 9, 2022) 70 “Most professionals learn their job
Slide 29: Benefitting from Record Tech Spends, Offshoring and Hiring
4th Annual Unitholders’ Meeting Benefitting from Record Tech Spends, Offshoring and Hiring Our tech customer base continues to grow as digital transformation accelerates globally. Global tech spends are driving record earnings, deal pipelines and robust hiring for tech occupiers Record Global Tech S
Slide 30: Bangalore Leading India's Office Recovery
4th Annual Unitholders’ Meeting Bangalore Leading India’s Office Recovery Given its position as India’s best performing office market and with its well-established tech and start- up ecosystem, Bangalore is at the forefront of office demand rebound Largest Tech, Start-up and GCC Hub in India Dominan
Slide 31: Business Strategy
1Q FY2022 Earnings Materials Business Strategy Express Towers, Mumbai
Slide 32: Global Tech Occupier Base Driving Rent Growth
4th Annual Unitholders’ Meeting Global Tech Occupier Base Driving Rent Growth Tech occupiers and Global Captives constitute over 72% of our occupier base Industry Diversification(1) Market Rents 24% above in-place rents Financial Rent (₹ psf / month) Services Technology 19% 40% 93 Others 11% 75 Rese
Slide 33: Development Fueling Organic Growth
4th Annual Unitholders’ Meeting V. Development Update Development Fueling Organic Growth Delivered 1.1 msf JP Morgan campus at ETV, ramped up construction activity for 4.6 msf office development Development Pipeline(1) (msf) Construction Status by Gross Asset Value Area (msf) Under 2.7 2.5 3.8 const
Slide 34: Kickstarted New Growth Cycle
4th Annual Unitholders’ Meeting Kickstarted New Growth Cycle New growth cycle at ETV gaining momentum with construction of 1.9 msf office development underway and launch of construction of 518 key Hilton hotels Tower B Tower A Tower C Hilton Garden Inn: 4-Star, 207 keys Hilton Hotel: 5-Star, 311 key
Slide 35: Opportunity for Acquisition led Inorganic Growth
4th Annual Unitholders’ Meeting Opportunity for Acquisition led Inorganic Growth Lowly levered balance sheet helps capitalize on our healthy acquisitions pipeline, both ROFO and third-party acquisition opportunities Acquisitions Delivered / Pipeline(1) 5 msf Chennai invitation from Embassy Sponsor 1
Slide 36: Supported by Fortress Balance Sheet
4th Annual Unitholders’ Meeting Supported by Fortress Balance Sheet Balance sheet well positioned to finance growth given ₹120 bn proforma debt headroom Net Debt to Market Capitalization(1) 6.7% Net Debt ₹119,883 Average Debt Cost 25% As of Mar’22 Equity ₹352,379 75% <1% Debt Headroom Debt Maturity
Slide 37: Pathway to Net Zero 2040
4th Annual Unitholders’ Meeting Pathway to Net Zero 2040 Targeting to increase renewable energy usage and to enhance energy efficient initiatives thereby reducing the overall carbon emissions in our operating portfolio Reduction of Carbon emissions Direct Emissions Indirect Emissions Increased Energ
Slide 38: 3-Year ESG Roadmap
4th Annual Unitholders’ Meeting 3-Year ESG Roadmap In-line with 2040 net zero commitment, defined next 3-year sustainability targets across 19 ESG Programmes within the overall 3 Pillar ESG framework Pillar Metric Target(1) FY2022 Actuals Status ► Renewable energy consumption share 75% by FY25 55% O
Slide 39: Strategic Pillars to Drive REIT's Growth
4th Annual Unitholders’ Meeting Strategic Pillars to Drive REIT’s Growth Embassy REIT’s business strategy focuses on enhancing NAV and delivering long-term, total return value for Unitholders 1 Grow Operating income by leasing vacant spaces ~95% Leasing Capture mark-to-market upside Occupancy ov
Slide 40: Q&A
1Q FY2022 Earnings Materials Q&A Hilton Hotel Complex, Embassy Manyata
Slide 41: Resolutions
1Q FY2022 Earnings Materials Resolutions Embassy Galaxy, Noida
Slide 42: Resolutions for Unitholder Approval
4th Annual Unitholders’ Meeting Resolutions for Unitholder Approval To consider, approve and adopt the audited standalone financial statements and audited consolidated financial statements of RESOLUTION 1 Embassy REIT as at and for the financial year ended March 31, 2022 together with the report o
Slide 43: Disclaimer
4th Annual Unitholders’ Meeting Disclaimer This presentation is issued by Embassy Office Parks Management Services Private Limited (the “Manager”) in its capacity as the Manager of the Embassy Office Parks REIT (“Embassy REIT”), for general information purposes only, without regards to the specific
Slide 44: Investor Contact
Investor Contact: Website: www.embassyofficeparks.com | Email: ir@embassyofficeparks.com | Office: +91 80 4722 2222
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