Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Q1 2025 Earnings Presentation
48 slides from Embassy Office Parks REIT's earnings presentation, Jul 25, 2024
Slide 1: Q1 FY2025 Earnings Materials
Embassy Office Parks REIT Q1 FY2025 Earnings Materials July 25, 2024 1
Slide 2: Press Release
Q1 FY2025 Earnings Materials Press Release Embassy REIT Leases 1.9 Million Square Feet in Q1 FY2025, up 70% YoY, and Grows Distributions by 4% YoY • Leases 1.9 msf across 22 deals with 70% of leasing by area driven by Global Capability Centres • Redeveloping 0.9 msf at Embassy Manyata in Bengaluru;
Slide 3: Press Release (Cont'd)
Q1 FY2025 Earnings Materials Press Release (Cont’d) Financial Highlights • Grew Revenue from Operations and Net Operating Income (NOI) for commercial office segment by 4% YoY; on track to meet FY25 NOI guidance • Distributed ₹531 crores or ₹5.60 per unit, up 4% YoY and 7% QoQ • Raised debt of ₹1,450
Slide 4: Table of Contents
Q1 FY2025 Earnings Materials Table of Contents I. Key Highlights 5 II. Q1 Business Updates 12 III. Development Updates 18 IV. Financial Updates 26 V. Market Outlook 30 VI. ESG and Total Business Ecosystem 35 VII. Appendix 39 4
Slide 5: I. Key Highlights
Q1 FY2022 Earnings Materials I. Key Highlights Central Garden, Embassy TechVillage, Bangalore
Slide 6: Strong Leasing Performance, Continued Growth Investments
Q1 FY2025 Earnings Materials Strong Leasing Performance, Continued Growth Investments Robust quarter with 1.9 msf of total leasing, driven by GCCs. Unlocked value at Embassy Manyata with 0.9 msf redevelopment project and expanded our footprint into new growth market of Chennai Leased 1.9 msf, 70% by
Slide 7: Delivering Growth on all Financial Metrics
Q1 FY2025 Earnings Materials Delivering Growth on all Financial Metrices Q1 Revenue up 2% YoY and NOI up 3% YoY, with commercial office segment NOI up 4% YoY. Efficient flowthrough with distributions of ₹5.3 billion or ₹5.60 per unit, up 4% YoY and 7% QoQ Revenue (₹ mn) NOI (₹ mn) +2% 9,342 81% 81%
Slide 8: Upcoming Deliveries in Next Years
Q1 FY2025 Earnings Materials Upcoming Deliveries in Next 2 Years 15% area expansion with 5.8 msf deliveries scheduled till end of FY2026. Of this, c.70%(1) is already pre-leased to marquee tenants Embassy Manyata – M3 Block B (0.6 msf) Embassy TechVillage – Block 8 (1.9 msf) Delivery in FY2025 Persp
Slide 9: FY2025 Guidance
Q1 FY2025 Earnings Materials FY2025 Guidance Reaffirm FY2025 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 FY2025 Guidance NOI (₹ mn) Revised Lea
Slide 10: Multiple Embedded Growth Levers
Q1 FY2025 Earnings Materials Multiple Embedded Growth Levers Strong embedded growth levers in the business give a clear pathway to deliver DPU growth Vacant area lease-up – occupancy expected to stabilize at pre-Covid 5.8 msf levels of mid-90s in the next few years New developments over the next
Slide 11: Expanding Unitholder Base
Q1 FY2025 Earnings Materials Expanding Unitholder Base Unitholder base crossed the 100k mark during the quarter. Public float of 92% is well distributed among foreign and domestic institutions and retail unitholders Well-diversified Investor Base Increasing Acceptance of REIT as an Investment Class
Slide 12: II. Q1 Business Updates
Q1 FY2022 Earnings Materials II. Q1 Business Updates FIFC, Mumbai
Slide 13: Continued Leasing Momentum
Q1 FY2025 Earnings Materials Continued Leasing Momentum Leased 1.9 msf across 22 deals in Q1 at 11% leasing spreads. Jun’24 Occupancy at 85% on a portfolio level and 86% on same store basis Area (msf) 1.9 msf Total Lease-up 8.1 across 22 deals(1) FY2025 Revised Guidance: 5.6 msf(2) 0.7 msf New Lease
Slide 14: Leasing Highlights for the Quarter
Q1 FY2025 Earnings Materials Leasing Highlights for the Quarter Q1 lease deals spanned multiple sectors such as Technology, Financial Services and Research, Consulting & Analytics. 70% of the leasing was driven by GCCs Area Q1 Leasing across Sectors Occupier Property Sector ('000 sf) Others New Leas
Slide 15: Embedded Rent Growth
Q1 FY2025 Earnings Materials Embedded Rent Growth Achieved rent escalations of 13% on 1.4 msf leases and renewed 0.6 msf at 9% renewals spreads. 29% MTM opportunity available on upcoming 1.3 msf expiries during the year Embedded Rent Escalations of ~15% aids NOI Growth 22% of Leases Expiring with 15
Slide 16: Hospitality Business Continued its Growth Trajectory
Q1 FY2025 Earnings Materials Hospitality Business Continued its Growth Trajectory Hotel portfolio recorded a 61% occupancy in Q1, up 8% YoY. Hotel NOI grew by 16% YoY and EBITDA by 12% YoY Revenue (₹ mn), EBITDA (₹ mn) and Occupancy (%) 10% 26% 50% 56% 53% 61% 4,363 3,394 1,841 982 1,014 1,066 609 4
Slide 17: Completed ESTZ Chennai Acquisition
Q1 FY2025 Earnings Materials Completed ESTZ Chennai Acquisition Acquired Embassy Splendid TechZone asset in Chennai at an Enterprise Value of around ₹12 bn. Transaction financed through debt at 8.05% and internal accruals 5.0 msf Total Leasable Area Chennai ~₹12 bn Enterprise Value(1) 9.2% Discount
Slide 18: III. Development Updates
Q1 FY2022 Earnings Materials III. Development Updates Embassy Oxygen, Noida
Slide 19: Active Development Pipeline
Q1 FY2025 Earnings Materials Active Development Pipeline 8.6 msf active developments at ~20% expected yield on cost. 100% of our developments in Bangalore and Chennai, both amongst top 3 Indian cities(1) in terms of absorption and annual rent growth Development Pipeline(2) (msf) Area (msf) 60% 81% 5
Slide 20: Unlocking Value at Embassy Manyata
Q1 FY2025 Earnings Materials Unlocking Value at Embassy Manyata Launched 0.9 msf redevelopment project at Embassy Manyata, with expected yield on cost of ~20%. The built-to-suit building is fully pre-leased (including expansion option) to a global bank ~3x Increase in Leasable Area to 0.9 msf Actual
Slide 21: Upcoming Deliveries | Embassy Manyata – M3 Block B
Q1 FY2025 Earnings Materials Upcoming Deliveries | Embassy Manyata – M3 Block B Perspective Actual Picture 0.6 msf ANZ 100% Sep’24 Total Area Marquee GCC Occupier Pre-leasing Target Delivery(1) Notes: (1) Modified Development Plan, Building Plan and Fire NOC obtained. Awaiting Occupancy Certificate
Slide 22: Upcoming Deliveries | Embassy TechVillage – Block 8
Q1 FY2025 Earnings Materials Upcoming Deliveries | Embassy TechVillage – Block 8 Perspective Actual Picture 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.(1) Expansion Options(1) Notes: (1) Includes expansion option of
Slide 23: Upcoming Deliveries | Embassy Manyata – Block L4
Q1 FY2025 Earnings Materials Upcoming Deliveries | Embassy Manyata – Block L4 Perspective Actual Picture 0.8 msf 0.8 msf 100% Sep’25 Total Area Pre-leased to American Pre-leasing(1) Target Delivery Retail Major(1) Notes: (1) LOI signed and ATL underway 23 (2) Jul’24 Picture
Slide 24: Upcoming Deliveries | Embassy Manyata – Block D1 and D2
Q1 FY2025 Earnings Materials Upcoming Deliveries | Embassy Manyata – Block D1 and D2 Perspective Actual Picture 1.4 msf 0.8 msf 78% Feb’26 Total Area Pre-leased to Major Pre-leasing Incl. Target Delivery Australian Bank(1) Expansion Options(1) Notes: (1) Includes expansion option of 313k sf availabl
Slide 25: Upcoming Deliveries | Embassy Splendid TechZone – Block 4 & 10
Q1 FY2025 Earnings Materials Upcoming Deliveries | Embassy Splendid TechZone – Block 4 & 10 Block 4 Block 10 Block 4 Actual Picture Actual Picture Perspective Perspective Total Area 0.6 msf Total Area 0.4 msf Target Delivery Jun’25 Target Delivery Jun’25 Façade and masterplan being upgraded, post
Slide 26: IV. Financial Updates
Q1 FY2022 Earnings Materials IV. Financial Updates Embassy TechVillage, Bangalore
Slide 27: Delivering on Distributions
Q1 FY2025 Earnings Materials Delivering on Distributions Delivered distributions of ₹5,308 mn or ₹5.60 per unit, up 4% YoY and 7% sequentially. Cumulative distributions of over ₹100 bn since listing Distribution Highlights Distribution Mix – Q1 FY2025 Particulars Q1 FY2025 Dividend Distribution peri
Slide 28: Well-Diversified Debt Book
Q1 FY2025 Earnings Materials Well-Diversified Debt Book Option 1: ₹30 bn Bond at REIT Level and ₹15 bn LRD at Manyata to refinance ZCB at an average Total debt book of ₹182 bn well-balanced across diverse investor pools, debt instruments and tenures coupon rate of 7%, average maturity period of 4 ye
Slide 29: Walkdown of Key Financial Metrics
Q1 FY2025 Earnings Materials Walkdown of Key Financial Metrics Particulars (₹ mn) Q1 FY2025 Q1 FY2024 YoY Variance (%) Q4 FY2024 QoQ Variance (%) Revenue from Operations 9,342 9,136 2% 9,458 (1%) NOI Property Taxes and Insurance (345) (326) 6% (360) (4%) Direct Operating Expenses (1,421) (1,434) (1%
Slide 30: V. Market Outlook
Q1 FY2022 Earnings Materials V. Market Outlook Embassy TechZone, Pune
Slide 31: India: The Office to the World
Q1 FY2025 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 32: India Office Market – Highest ever H1 leasing
Q1 FY2025 Earnings Materials India Office Market – Highest ever H1 leasing India office market recorded a strong first half with 31 msf absorption, up 26% YoY. CY2024 expected to create a new absorption record, beating the all-time high of 61 msf in 2019 Demand and Supply Trends 80.0 32% 69.6 70.7 7
Slide 33: Bangalore – India's Leading Office Market
Q1 FY2025 Earnings Materials Bangalore – India’s Leading Office Market On the back of sustained demand from GCCs, Bangalore continues to lead India’s office absorption which has resulted in continued rent growth in key micro-markets Balanced Demand-Supply Aiding Rent Growth Embassy REIT’s Strategic
Slide 34: Chennai – New Growth Market in India
Q1 FY2025 Earnings Materials Chennai – New Growth Market in India Supported by established education infrastructure and abundant STEM talent, the Chennai office market features amongst top 3 Indian cities(1) in terms of absorption and annual rent growth Demand Outstripping Cumulative Supply Aiding A
Slide 35: VI. ESG & Total Business Ecosystem
Q1 FY2022 Earnings Materials VI. ESG & Total Business Ecosystem Embassy GolfLinks, Bangalore
Slide 36: Certifications and Awards
Q1 FY2025 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 37: ESG Roadmap – Progress Report
Q1 FY2025 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) Q1 FY25 Update Status ► Renewable energy consumption
Slide 38: Continued Stakeholder Engagement
Q1 FY2025 Earnings Materials Continued Stakeholder Engagement Partnered with our occupiers to host multiple lifestyle and sports events, aimed at engaging the employees working in our properties International Yoga Day @ Embassy Manyata NovoHealth@Embassy Manyata 38 38
Slide 39: VII. Appendix
Q1 FY2022 Earnings Materials VII. Appendix Embassy Manyata, Bangalore
Slide 40: Who We Are: Quick Facts
Q1 FY2025 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 5 major cities in India 51.0 msf(1)(2) 258 85% Portfolio Blue-chip Occupancy occupiers 14 1,614(2) 100
Slide 41: High Quality, Diversified Occupier Base
Q1 FY2025 Earnings Materials High Quality, Diversified Occupier Base GCCs and Tech occupiers constitute over 70% of our total occupier base, which now boasts of 258 marquee names Industry Diversification Top 5 Occupiers Sector % of Rentals Financial Services Global Technology and Technology 6.9% 22%
Slide 42: Portfolio Summary
Q1 FY2025 Earnings Materials Portfolio Summary 37.7 msf completed Grade A office assets (85% occupied, 7.6 years WALE, 9% MTM opportunity) (2) (3) Leasable Area (msf)/Keys/MW (2) Occupancy Rent (₹ psf / mth) (3) WALE GAV Property Completed Development Total (yrs) (%) In-place Market MTM (%) ₹ mn % o
Slide 43: Embassy REIT Structure
Q1 FY2025 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%(3) 100% 100
Slide 44: Ten Infrastructure-like Office Parks
Q1 FY2025 Earnings Materials Ten Infrastructure-like Office Parks Embassy Manyata Embassy TechVillage Embassy TechZone Bangalore (16.2 msf) Bangalore (9.6 msf) Pune (5.5 msf) Embassy Splendid TechZone Embassy Oxygen Embassy GolfLinks Chennai (5.0 msf) Noida (3.3 msf) Bangalore (3.1 msf) Embassy Quad
Slide 45: Four Prime City-center Offices
Q1 FY2025 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) 45
Slide 46: Key Terms & Definitions
Q1 FY2025 Earnings Materials Key Terms & Definitions Notes: 37. MNC – Multinational Corporation ► All figures in this presentation are as of Jun 30, 2024 unless otherwise specified 38. msf – Million square feet ► All figures corresponding to year denoted with “FY” are as of or for the one-year perio
Slide 47: Disclaimer
Q1 FY2025 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 48: Investor Contact
Embassy Splendid TechZone Acquisition AS INDIA’S FIRST LISTED REIT 51.0 MSF TOTAL PORTFOLIO | 5 GATEWAY CITIES | 14 OFFICE PARKS | 258 BLUE CHIP OCCUPIERS INVESTOR CONTACT: Website: www.embassyofficeparks.com | Email: ir@embassyofficeparks.com | Office: +91 80 6935 4864
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