Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Q4 FY2024 Earnings Presentation
59 slides from Embassy Office Parks REIT's earnings presentation, Apr 25, 2024
Slide 1: FY2024 Earnings Materials
Embassy Office Parks REIT FY2024 Earnings Materials April 25, 2024 1
Slide 2: Press Release
Q4 FY2024 Earnings Materials Press Release Embassy REIT Announces Record Full-Year FY2024 Results with 8.1 Million Square Feet of Total Leases; Guides to ~7% Distribution Growth in FY2025 • Leases record 8.1 msf across 99 deals; exceeds full year initial guidance of 6 msf by 35% • Delivers distribut
Slide 3: Press Release (Cont'd)
Q4 FY2024 Earnings Materials Press Release (Cont’d) Financial Highlights • Grew Revenue from Operations and Net Operating Income by 8% YoY to ₹3,685 crores and ₹2,982 crores, respectively • Delivered distributions of ₹2,022 crores or ₹21.33 per unit for FY2024; cumulative distributions of ~₹9,900 cr
Slide 4: Table of Contents
Q4 FY2024 Earnings Materials Table of Contents I. 5-Year Highlights 5 II. FY2024 Highlights 9 III. Looking Ahead 14 IV. Business Updates 21 V. Financial Updates 26 VI. Development and Acquisition Updates 33 VII. Market Outlook 43 VIII. ESG and Total Business Ecosystem 46 IX. Appendix 51 4
Slide 5: I. 5 Year Highlights
Q1 FY2022 Earnings Materials I. 5 Year Highlights Central Garden, Embassy TechVillage, Bangalore
Slide 6: Embassy REIT – 5 Year Highlights
Q4 FY2024 Earnings Materials Embassy REIT – 5 Year Highlights Since listing, Embassy REIT has demonstrated strong operational performance and delivered annualized total returns of over 11% 47% 12.0 msf 5.5 msf 19.5 msf Increase in Completed Area Acquisitions(1) New Buildings Delivered(2) Gross Leasi
Slide 7: Resilient Performance Since Listing
Q4 FY2024 Earnings Materials Resilient Performance Since Listing Delivered NOI growth of 64%, primarily driven by acquisitions, in-place rent growth of 38% and new hotel launches Total Leasable Area (msf) Total Annual Gross Leasing (msf) 94% 93% 89% 87% 86% 85% 8.1 42.4 42.8 45.0 45.4 5.1 32.7 33.3
Slide 8: Diversified Unitholder Base
Q4 FY2024 Earnings Materials Diversified Unitholder Base Unitholder base continues to expand and diversify since listing; public float of 92% well distributed among foreign and domestic institutions and retail unitholders Well-diversified Investor Base Increasing Acceptance of REIT as an Investment
Slide 9: II. FY2024 Highlights
Q1 FY2022 Earnings Materials II. FY2024 Highlights Hilton Hotel Complex, Embassy Manyata, Bangalore
Slide 10: FY2024 – Outstanding Year with Robust Leasing Performance
Q4 FY2024 Earnings Materials FY2024 – Outstanding Year with Robust Leasing Performance With 8.1 msf of total leasing, 2.2 msf of new office deliveries and ₹72 bn of debt refinancing at best-in- class interest rates, we surpassed our leasing guidance and delivered on our financial guidance Higher-eve
Slide 11: Highest Ever Annual Leasing
Q4 FY2024 Earnings Materials Highest Ever Annual Leasing Leased a record 8.1 msf across 99 deals at 31% leasing spreads, surpassing initial leasing guidance of 6 msf by 35%. Mar’24 Occupancy of 85% on a portfolio level and 87% on a same-store basis Area (msf) 8.1 msf 8.1 Total Lease-up across 99 dea
Slide 12: FY2024 – Marquee Pre-Commitment Deals
Q4 FY2024 Earnings Materials FY2024 – Marquee Pre-Commitment Deals Signed four large pre-commitment deals, totaling 2.4 msf in our under-development projects in Bangalore Embassy Manyata – Blocks D1 & D2 (1.4 msf) Embassy TechVillage – Block 8 (1.9 msf) Perspective Perspective 78% Pre-leased(1,2) to
Slide 13: Robust Financial Performance
Q4 FY2024 Earnings Materials Robust Financial Performance Met FY2024 guidance for NOI and distributions. Revenue and NOI up 8% each year-on-year. Commercial office margins of 85% and hotel margins of over 45% continue to be best-in-class Revenue (₹ mn) NOI (₹ mn) 36,852 81% 81% +8% 29,819 34,195 +8%
Slide 14: III. Looking Ahead
Q1 FY2022 Earnings Materials III. Looking Ahead Embassy Manyata, Bangalore
Slide 15: India: The Office to the World
Q4 FY2024 Earnings Materials India: The Office to the World India remains optimally positioned to drive global offshoring demand, led by favorable demographics, skilled talent availability and cost-efficient high-quality spaces offered in India’s gateway cities India’s Dual Structural Advantage Cont
Slide 16: Bangalore is Asia's and India's Leading Office Market
Q4 FY2024 Earnings Materials Bangalore is Asia’s and India’s Leading Office Market Embassy REIT’s portfolio concentration in Bangalore remains a key competitive advantage, as the city continues to lead India’s office absorption on the back of sustained interest from GCCs Balanced Demand-Supply Aidin
Slide 17: Multiple Embedded Growth Levers for Embassy REIT
Q4 FY2024 Earnings Materials Multiple Embedded Growth Levers for Embassy REIT Embassy REIT’s strategy leverages on multiple levers to enhance NOI and delivering long term total return value for Unitholders Vacant area lease-up – occupancy expected to stabilize at pre-Covid 5.6 msf levels of mid-90
Slide 18: Active Development Pipeline
Q4 FY2024 Earnings Materials Active Development Pipeline 6.1 msf active developments at highly attractive yields, with 100% of the projects in Bangalore, India’s best office market Development Pipeline(1) (msf) Area (msf) (3) 48% 81% 87% - - 2.5 2.2 2.2 1.4 1.0 0.4 0.8 FY2024 FY2025 FY2026 FY2027 FY
Slide 19: Embedded Rent Growth
Q4 FY2024 Earnings Materials Embedded Rent Growth Contracted rent escalations (generally ~15% every 3 years) and significant mark-to-market opportunity (16% blended MTM till FY2028) are key drivers for NOI growth Embedded Rent Escalations of ~15% aids NOI Growth 29% of Leases Expire Between FY2025–2
Slide 20: Full Year FY2025 Guidance
Q4 FY2024 Earnings Materials Full Year FY2025 Guidance FY25 NOI guidance of ₹32.1 to ₹33.5 bn and distributions guidance of ₹22.4 to ₹23.1 per unit, implying a 10% NOI growth and 7% DPU growth year-on-year, at the mid-point of guidance range Key Assumptions for FY25 Guidance NOI (₹ mn) 32,800 Pre-co
Slide 21: IV. Business Updates
Q1 FY2022 Earnings Materials IV. Business Updates FIFC, Mumbai
Slide 22: GCCs Continue to Drive Demand
Q4 FY2024 Earnings Materials GCCs Continue to Drive Demand GCCs contributed to 66% of the FY2024 leasing. Added 31 new corporates in our occupier roster and leased expansionary space to 68 existing occupiers FY2024 Leasing Driven by GCCs Lowe’s Australian American Banking Major Retail Major GCCs GCC
Slide 23: Leasing Highlights for the Quarter
Q4 FY2024 Earnings Materials Leasing Highlights for the Quarter 1.5 msf leased in Q4 FY2024, spanning multiple sectors such as Financial Services, Co-working, Healthcare and Technology Area Q4 Leasing across Sectors Occupier Property Sector ('000 sf) Others New Leases 1,286 Research, 3% 4% Financial
Slide 24: High Quality, Diversified Occupier Base
Q4 FY2024 Earnings Materials High Quality, Diversified Occupier Base GCCs and Tech occupiers constitute over 70% of our total occupier base, which now boasts of 255 marquee names Industry Diversification Top 5 Occupiers Sector % of Rentals Financial Services JP Morgan Financial Services 6.1% 21% Glo
Slide 25: Hospitality Business Continued its Growth Trajectory
Q4 FY2024 Earnings Materials Hospitality Business Continued its Growth Trajectory Operating hotel portfolio continued to grow strongly with 56% occupancy, 14% YoY ADR growth and FY2024 EBITDA of ₹1,841 mn RevPAR (₹) and Occupancy (%) Revenue (₹ mn) and EBITDA (₹ mn) 42% 10% 26% 50% 56% Revenue EBITD
Slide 26: V. Financial Updates
Q1 FY2022 Earnings Materials V. Financial Updates Embassy TechVillage, Bangalore
Slide 27: Financial Performance during Q4 FY2024
Q4 FY2024 Earnings Materials Financial Performance during Q4 FY2024 Revenue and NOI for Q4 up 9% and 13% year-on-year respectively. Commercial office margins stood at 84% and hotel margins at over 50%, both continue to be best-in-class Revenue (₹ mn) NOI (₹ mn) 78% 81% 9,458 +9% 7,656 8,676 +13% 6,8
Slide 28: Delivering on Distributions
Q4 FY2024 Earnings Materials Delivering on Distributions Delivered distributions of ₹4,948 mn or ₹5.22 per unit, marking 20th quarter of 100% distribution payout. Cumulative distributions of around ₹99 bn since listing Distribution Highlights Distribution Mix – FY24 Particulars Q4 FY2024 FY2024 Dist
Slide 29: Active Debt Management
Q4 FY2024 Earnings Materials Active Debt Management Successfully refinanced ₹72 bn at industry-leading rates. Focused on fixing rates for shorter term tactically and diversifying investor base ₹41 bn of Maturing Debt Refinanced at 8.2% ₹31 bn of Proactive Debt Refinance Listed NCD Listed NCD ~9% Ann
Slide 30: Well-Diversified Debt Book
Q4 FY2024 Earnings Materials Well-Diversified Debt Book Option 1: ₹30 Total gross debt Bondofat₹168 bnbook REIT bnLevel and ₹15 bn well-balanced across LRD diverse at Manyata investor to refinance pools, debt ZCBinstruments at an average and tenures rate of 7%, average maturity period of 4 years, wi
Slide 31: Portfolio Valuation Update
Q4 FY2024 Earnings Materials Portfolio Valuation Update GAV up by 8% YoY to ₹555 bn and NAV up by 1.7% YoY to ₹401.59 per unit. Over 75% of the portfolio value concentrated in Bangalore, India’s best performing office market Particulars (₹ mn) March 31, 2024 GAV Break-up by Segment Gross Asset Value
Slide 32: Walkdown of Key Financial Metrics
Q4 FY2024 Earnings Materials Walkdown of Key Financial Metrics Particulars (₹ mn) Q4 FY2024 Q4 FY2023 YoY Var (%) FY2024 FY2023 YoY Var (%) Revenue from Operations 9,458 8,676 9% 36,852 34,195 8% NOI Property Taxes and Insurance (360) (355) 1% (1,371) (1,295) 6% Direct Operating Expenses (1,443) (1,
Slide 33: VI. Development and Acquisition Updates
Q1 FY2022 Earnings Materials VI. Development and Acquisition Updates Embassy Oxygen, Noida
Slide 34: Delivered | Embassy Oxygen – Tower 1
Q4 FY2024 Earnings Materials Delivered | Embassy Oxygen – Tower 1 0.7 msf Non-SEZ 3 29% Total Area Building(2) Blue-chip Occupiers Occupancy Notes: (1) Apr’24 Picture 34 (2) Demarcated as Non-Processing Area under the amended SEZ rules
Slide 35: Delivered | Embassy Business Hub – Phase 1
Q4 FY2024 Earnings Materials Delivered | Embassy Business Hub – Phase 1 0.4 msf Airport Road Philips 92% Total Area High Visibility Location Marquee GCC Occupier Occupancy Note: (1) Apr’24 Picture 35
Slide 36: Delivered | Embassy Manyata – M3 Block A
Q4 FY2024 Earnings Materials Delivered | Embassy Manyata – M3 Block A 1.0 msf 15.6 msf 2 44% Total Area One of the Largest Office Marquee GCC Occupiers Occupancy Parks in India 36
Slide 37: Upcoming Deliveries | Embassy TechVillage – Block 8
Q4 FY2024 Earnings Materials Upcoming Deliveries | Embassy TechVillage – Block 8 Actual Picture Perspective 1.9 msf 1.2 msf 76% Oct’24 – Dec’24 Total Area Pre-leased to JP Morgan Pre-leasing Incl. Target Delivery and a US-based Tech Co.(2) Expansion Options(1) Notes: (1) Includes expansion option of
Slide 38: Upcoming Deliveries | Embassy Manyata – M3 Block B
Q4 FY2024 Earnings Materials Upcoming Deliveries | Embassy Manyata – M3 Block B Actual Picture Perspective 0.6 msf ANZ 100% Mar’25 Total Area Marquee GCC Occupier Pre-leasing Target Delivery Note: (1) Apr’24 Picture 38
Slide 39: Upcoming Deliveries | Embassy Manyata – Block L4
Q4 FY2024 Earnings Materials Upcoming Deliveries | Embassy Manyata – Block L4 Actual Picture Perspective Perspective 0.8 msf 0.8 msf 100% Sep’25 Total Area Pre-leased to American Pre-leasing Target Delivery Retail Major Note: (1) LOI signed and ATL underway 39
Slide 40: Upcoming Deliveries | Embassy Manyata – Block D1 and D2
Q4 FY2024 Earnings Materials Upcoming Deliveries | Embassy Manyata – Block D1 and D2 Actual Picture Perspective 1.4 msf 0.8 msf 78% Feb’26 Total Area Pre-leased to Major Pre-leasing Incl. Target Delivery Australian Bank Expansion Options(1) Notes: (1) Includes expansion option of 313k sf available w
Slide 41: Compelling Acquisition Opportunity | Embassy Splendid TechZone
Q4 FY2024 Earnings Materials Compelling Acquisition Opportunity | Embassy Splendid TechZone Proposed acquisition of a best-in-class office park that marks Embassy REIT’s entry into a new growth market of Chennai 5.0 msf campus-style office park spread over ~26 acres; complementary to the REIT’s ex
Slide 42: About Embassy Splendid TechZone
Q4 FY2024 Earnings Materials About Embassy Splendid TechZone Pallavaram- Location Thoraipakkam Road, Chennai Total Leasable 5.0 msf Area Completed Area / 1.4 msf / 95% Occupancy Under Construction Area 1.6 msf / 26% / Pre-Leased % Future 2.0 msf Development Area In-Place Rent Actual Picture ₹69 (psf
Slide 43: VII. Market Outlook
Q1 FY2022 Earnings Materials VII. Market Outlook Embassy TechZone, Pune
Slide 44: Market Fundamentals – Update
Q4 FY2024 Earnings Materials Market Fundamentals – Update Gross office absorption continued to exceed supply during the quarter, driven by resilient offshoring demand, especially in Bangalore Demand and Supply Trends City-wise Performance (Jan’24 – Mar’24) 70.0 32% City Gross Supply Vacancy 60.8 Abs
Slide 45: Demand and Supply Outlook
Q4 FY2024 Earnings Materials Demand and Supply Outlook Gross office absorption projected to continue last year’s highs, primarily driven by GCC demand. Supply remains balanced in our micro-markets, with only 21% comparable and competing supply Demand Outlook Supply Outlook Gross Absorption (msf) Sup
Slide 46: VIII. ESG & Total Business Ecosystem
Q1 FY2022 Earnings Materials VIII. ESG & Total Business Ecosystem Embassy GolfLinks, Bangalore
Slide 47: Certifications and Awards
Q4 FY2024 Earnings Materials Certifications and Awards ESG certifications, awards and performance on global benchmarks reflect our commitment to sustainability and transparency Building Certifications World’s Largest USGBC LEED 35 Buildings Certified for 5-star Rating for 100% ISO 9001/14001/45001/2
Slide 48: ESG Roadmap – Progress Report
Q4 FY2024 Earnings Materials ESG Roadmap – Progress Report Continued progress on our 3-year sustainability targets, which are defined and monitored across 19 ESG programs and aligned to our broader 2040 net zero commitment Pillar Metric Target(1) FY24 Update Status ► Renewable energy consumption sha
Slide 49: Annual 'Occupier Connect' Event
Q4 FY2024 Earnings Materials Annual ‘Occupier Connect’ Event Successfully hosted the second edition of the ‘Occupier Connect’ event, themed ‘Powering India’s Growth’, with participation of 300+ corporate occupiers and strategic partners Occupier Connect Event 2024 49
Slide 50: Embassy 'Energize' Events Across Properties
Q4 FY2024 Earnings Materials Embassy ‘Energize’ Events Across Properties Held multiple cultural, sports and lifestyle events across our business parks, aimed at engaging the 200,000+ employees working in these properties ‘Embassy Office Parks Got Talent’ Event NovoHealth@Embassy Manyata Lululemon ‘S
Slide 51: IX. Appendix
Q1 FY2022 Earnings Materials IX. Appendix Embassy Manyata, Bangalore
Slide 52: Who We Are: Quick Facts
Q4 FY2024 Earnings Materials Who We Are: Quick Facts Embassy REIT is India’s first listed REIT and the largest office REIT in Asia by area. It owns and operates a commercial office portfolio across 4 major cities in India 45.4 msf(1)(2) 255 85% Portfolio Blue-chip Occupancy occupiers 13 1,614(2) 100
Slide 53: Portfolio Summary
Q4 FY2024 Earnings Materials Portfolio Summary 36.5 msf completed Grade A office assets (85% occupied, 6.8 years WALE, 10% MTM opportunity) (2) (2) (3) (3) Leasable Area (msf)/Keys/MW WALE Occupancy Rent (₹ psf / mth) GAV Property Completed Development Total (yrs) (%) In-place Market MTM (%) ₹ mn %
Slide 54: Embassy REIT Structure
Q4 FY2024 Earnings Materials Embassy REIT Structure Blackstone Embassy Sponsor Group Sponsor Public Unitholders Acts on behalf Management of Unitholders Embassy Services Trustee Manager (Axis Trustee) REIT (EOPMSPL) 100% Manyata Promoters Private Limited (Embassy Manyata) 80% 50%(1) 100% 100% 100% 1
Slide 55: Nine Infrastructure-like Office Parks
Q4 FY2024 Earnings Materials Nine Infrastructure-like Office Parks Embassy Manyata Embassy TechVillage Embassy Business Hub Bangalore (15.6 msf) Bangalore (9.6 msf) Bangalore (1.4 msf) Embassy GolfLinks Embassy Quadron Embassy TechZone Bangalore (2.7 msf) (3.1 msf) Pune (1.9 msf) Pune (5.5 msf) Emba
Slide 56: Four Prime City-center Offices
Q4 FY2024 Earnings Materials Four Prime City-center Offices Express Towers FIFC Embassy One Mumbai (0.5 msf) Mumbai (0.4 msf) Bangalore (0.3 msf) Embassy 247 Mumbai (1.2 msf) 56
Slide 57: Key Terms & Definitions
Q4 FY2024 Earnings Materials Key Terms & Definitions Notes: 37. NAV – Net Asset Value ► All figures in this presentation are as of Mar 31, 2024 unless otherwise specified 38. NCD – Non-Convertible Debentures ► All figures corresponding to year denoted with “FY” are as of or for the one-year period e
Slide 58: Disclaimer
Q4 FY2024 Earnings Materials 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 obj
Slide 59: Embassy Splendid TechZone Acquisition
Embassy Splendid TechZone Acquisition
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