Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Q2 FY2025 Earnings Presentation
47 slides from Embassy Office Parks REIT's earnings presentation, Oct 24, 2024
Slide 1: Embassy Office Parks REIT Q2 FY2025 Earnings Materials
Embassy Office Parks REIT Q2 FY2025 Earnings Materials October 24, 2024 1
Slide 2: Press Release
Q2 FY2025 Earnings Materials Press Release Embassy REIT Leases 2.1 Million Square Feet in Q2 FY2025, Grows Revenue by 12% YoY and Occupancy to 90% • Leases 2.1 msf in Q2 and 4.0 msf in the first half of FY2025, setting a new record for H1 performance • Raises FY2025 leasing guidance from 5.6 msf to
Slide 3: Press Release (Cont'd)
Q2 FY2025 Earnings Materials Press Release (Cont’d) Financial Highlights • Grew Revenue from Operations and Net Operating Income (NOI) by 12% YoY to ₹997 crores and ₹805 crores, respectively • Distributed ₹553 crores or ₹5.83 per unit, up 5% YoY and 4% QoQ • Raised ₹2,000 crores debt at ~7.95% to re
Slide 4: Table of Contents
Q2 FY2025 Earnings Materials Table of Contents I. Key Highlights 5 II. Q2 Business Updates 11 III. Development Updates 16 IV. Financial Updates 22 V. Market Outlook 29 VI. ESG and Total Business Ecosystem 34 VII. Appendix 38 4
Slide 5: I. Key Highlights
Q2 FY2025 Earnings Materials I. Key Highlights Central Garden, Embassy TechVillage, Bangalore
Slide 6: Robust Leasing Momentum, Strong Growth Outlook
Q2 FY2025 Earnings Materials Robust Leasing Momentum, Strong Growth Outlook Strong quarter with 2.1 msf of total leasing, leading to 200 bps increase in occupancy to 87%. With active debt management and embedded growth levers, focus remains on delivering DPU growth Leased 2.1 msf Across 24 Deals in
Slide 7: Occupancy on an Upward Trajectory
Q2 FY2025 Earnings Materials Occupancy on an Upward Trajectory Portfolio occupancy continued to trend upwards and increased by 4% YoY. This was despite addition of ~3 msf of new area to our completed portfolio, which increased from 35.3 msf to 38.4 msf Occupancy by Area (%) 35.3 35.8 36.5 37.7 38.4
Slide 8: Delivering Growth on all Financial Metrics
Q2 FY2025 Earnings Materials Delivering Growth on all Financial Metrics Q2 Revenue and NOI both up 12% YoY. Announced quarterly distributions of ₹5.5 billion or ₹5.83 per unit, up 5% YoY and 4% QoQ Revenue (₹ mn) NOI (₹ mn) 81% 81% 9,973 +12% +12% 8,046 8,893 7,189 Q2 FY24 Q2 FY25 Q2 FY24 Q2 FY25 NO
Slide 9: Upcoming Deliveries till FY26
Q2 FY2025 Earnings Materials Upcoming Deliveries till FY26 ~14% area expansion with 5.2 msf deliveries scheduled till end of FY2026. Of this, over 70%(1) is already pre-leased to marquee tenants Embassy TechVillage – Block 8 (1.9 msf) Embassy Splendid TechZone – Blocks 4 & 10 (1.0 msf) Perspective B
Slide 10: Revised FY2025 Leasing Guidance
Q2 FY2025 Earnings Materials Revised FY2025 Leasing Guidance Revised Leasing Guidance to 6.5 msf from the previous guidance of 5.6 msf. Remain on track to meet NOI and DPU guidance Key Assumptions for FY2025 Guidance NOI (₹ mn) Revised Leasing Guidance (msf) Pre-commitments +10% 32,800 1.5 msf 29,81
Slide 11: II. Q2 Business Updates
Q2 FY2025 Earnings Materials II. Q2 Business Updates FIFC, Mumbai
Slide 12: Record H1 Leasing
Q2 FY2025 Earnings Materials Record H1 Leasing Leased 2.1 msf across 24 deals in Q2 at 71% leasing spreads, achieving our highest-ever H1 leasing performance of ~4.0 msf. Sep’24 Portfolio Occupancy at 87% by area and at 90% by value Q2 Leasing Performance Area (msf) 8.1 2.1 msf Total Lease-up FY2025
Slide 13: Leasing Highlights for the Quarter
Q2 FY2025 Earnings Materials Leasing Highlights for the Quarter Q2 lease deals spanned multiple sectors such as Co-working, Technology, Financial Services, and Healthcare. Approx. 50% of the leasing was driven by GCCs Area Q2 Leasing across Sectors Occupier Property Sector ('000 sf) Others New Lease
Slide 14: Embedded Rent Growth
Q2 FY2025 Earnings Materials Embedded Rent Growth Secured 13% rent escalations on 1.4 msf and 78% renewal spreads on 0.4 msf in Q2. Of the 1.5 msf exits in H1, already backfilled over 40% area at 61% spreads and remainder offers 19% MTM potential Embedded Rent Escalations of 12%-15% aids NOI Growth
Slide 15: Hospitality Business Continued its Growth Trajectory
Q2 FY2025 Earnings Materials Hospitality Business Continued its Growth Trajectory Q2 hotel occupancy stood at 67%, registering a 14-percentage points uptick YoY. We also recorded a 31% YoY growth in RevPAR, keeping us on track with our annual hotel NOI guidance Revenue (₹ mn), EBITDA (₹ mn) and Occu
Slide 16: III. Development Updates
Q2 FY2025 Earnings Materials III. Development Updates Embassy Oxygen, Noida
Slide 17: Active Development Pipeline
Q2 FY2025 Earnings Materials Active Development Pipeline 8.0 msf active developments at 19% expected yield on cost. 100% of developments are 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) 70%(3) 76%
Slide 18: Upcoming Deliveries | Embassy TechVillage – Block 8
Q2 FY2025 Earnings Materials Upcoming Deliveries | Embassy TechVillage – Block 8 Block 8D(1) Block 8A, B & C Actual Picture Actual Picture 1.9 msf 1.4 msf 76% Oct’24 - Feb’25 Total Area Pre-leased to JP Morgan, Pre-leasing Incl. Target Delivery Cybersecurity Tech Co. & Expansion Options(2) US-based
Slide 19: Upcoming Deliveries | Embassy Splendid TechZone – Blocks 4 and 10
Q2 FY2025 Earnings Materials Upcoming Deliveries | Embassy Splendid TechZone – Blocks 4 and 10 Block 4 Block 10 Actual Picture Actual Picture Perspective Perspective Perspective 0.6 msf Jun’25 0.4 msf Jun’25 Total Area Target Delivery Total Area Target Delivery Robust Leasing Pipeline for both Blo
Slide 20: Upcoming Deliveries | Embassy Manyata – Block L4
Q2 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 Target Delivery Retailer Note: (1) Oct’24 Picture 20
Slide 21: Upcoming Deliveries | Embassy Manyata – Blocks D1 and D2
Q2 FY2025 Earnings Materials Upcoming Deliveries | Embassy Manyata – Blocks D1 and D2 Perspective Actual Picture 1.4 msf 0.9 msf 100% Feb’26 Total Area Pre-leased to Pre-leasing Incl. Target Delivery Australian Bank Expansion Options(1) Notes: (1) Includes expansion option of 455k sf available with
Slide 22: IV. Financial Updates
Q2 FY2025 Earnings Materials IV. Financial Updates Embassy TechVillage, Bangalore
Slide 23: Financial Performance during H1 FY2025
Q2 FY2025 Earnings Materials Financial Performance during H1 FY2025 Revenue and NOI for H1 both up 7% YoY, with commercial office segment NOI up 8% YoY Revenue (₹ mn) NOI (₹ mn) +7% 19,315 81% 81% 18,029 +7% 15,621 14,565 H1 FY24 H1 FY25 H1 FY24 H1 FY25 NOI Margin (%) EBITDA (₹ mn) Distributions (₹
Slide 24: Delivering on Distributions
Q2 FY2025 Earnings Materials Delivering on Distributions Delivered distributions of ₹5,526 mn or ₹5.83 per unit, up 5% YoY and 4% sequentially. Cumulative distributions of close to ₹110 bn since listing Distribution Highlights Distribution Mix – Q2 FY2025 Particulars Q2 FY2025 H1 FY2025 Distribution
Slide 25: Well-Diversified Debt Book
Q2 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 ₹184 bn well-balanced across diverse investor pools, debt instruments and tenures coupon rate of 7%, average maturity period of 4 ye
Slide 26: Growth in Portfolio Value
Q2 FY2025 Earnings Materials Growth in Portfolio Value Gross Asset Value grew by 12% YoY to ₹591 bn and Net Asset Value by 4% YoY to ₹415.84 per unit, as of Sep’24 Particulars (₹ mn) September 30, 2024 GAV Break-up by Segment Gross Asset Value (GAV)(1,2) 591,042 Add: Other Assets 66,068 Less: Other
Slide 27: Walkdown of Key Financial Metrics
Q2 FY2025 Earnings Materials Walkdown of Key Financial Metrics Particulars Q2 FY2025 Q2 FY2024 Variance (%) H1 FY2025 H1 FY2024 Variance (%) Revenue from Operations 9,973 8,893 12% 19,315 18,029 7% NOI Property Taxes and Insurance (383) (343) 12% (728) (669) 9% Direct Operating Expenses (1,544) (1,3
Slide 28: Expanding Unitholder Base
Q2 FY2025 Earnings Materials Expanding Unitholder Base Unitholder base remains strong with over 100k investors. 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 S
Slide 29: V. Market Outlook
Q2 FY2025 Earnings Materials V. Market Outlook Embassy TechZone, Pune
Slide 30: India: The Office to the World
Q2 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 31: India Office Market – Highest ever 9M Leasing
Q2 FY2025 Earnings Materials India Office Market – Highest ever 9M Leasing India office market recorded its highest ever 9-month leasing with 50.0 msf absorption, up 23% 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
Slide 32: Bangalore – India's Leading Office Market
Q2 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 33: Chennai – New Growth Market in India
Q2 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 34: VI. ESG & Total Business Ecosystem
Q2 FY2025 Earnings Materials VI. ESG & Total Business Ecosystem Embassy GolfLinks, Bangalore
Slide 35: Certifications and Awards
Q2 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 36: ESG Roadmap – Progress Report
Q2 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) H1 FY25 Update Status ► Renewable energy consumption
Slide 37: Continued Asset Upgrades
Q2 FY2025 Earnings Materials Continued Asset Upgrades Continuously refurbishing and upgrading older buildings, thereby enhancing value and in-place rents Block F2 at Embassy Manyata (0.8 msf) Before Refurbishment Post Refurbishment Achieved leasing spread of 83% post refurbishment Note: (1) Oct’24
Slide 38: VII. Appendix
Q2 FY2025 Earnings Materials VII. Appendix Embassy Manyata, Bangalore
Slide 39: Who We Are: Quick Facts
Q2 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 51.1 msf(1)(2) 260 87% Portfolio Blue-chip Occupancy occupiers 14 1,614(2) 100
Slide 40: High Quality, Diversified Occupier Base
Q2 FY2025 Earnings Materials High Quality, Diversified Occupier Base GCCs and Tech occupiers constitute over 70% of our total occupier base, which now boasts of 260 marquee names Industry Diversification Top 5 Occupiers Sector % of Rentals Financial Services Global Technology and Technology 7.1% 23%
Slide 41: Portfolio Summary
Q2 FY2025 Earnings Materials Portfolio Summary 38.4 msf completed Grade A office assets (87% occupied, 7.9 years WALE, 7% MTM opportunity) Leasable Area (msf)/Keys/MW WALE(2)(2) Occupancy Rent (₹ psf / mth) (3) GAV(3) Property Completed Development Total (yrs) (%) In-place Market MTM (%) ₹ mn % of t
Slide 42: Embassy REIT Structure
Q2 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 43: Ten Infrastructure-like Office Parks
Q2 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 44: Four Prime City-center Offices
Q2 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) 44
Slide 45: Key Terms & Definitions
Q2 FY2025 Earnings Materials Key Terms & Definitions Notes: 37. MNC – Multinational Corporation ► All figures in this presentation are as of Sep 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 peri
Slide 46: Disclaimer
Q2 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 47: Investor Contact
Embassy Splendid TechZone Acquisition AS INDIA’S FIRST LISTED REIT 51.1 MSF TOTAL PORTFOLIO | 5 GATEWAY CITIES | 14 OFFICE PARKS | 260 BLUE CHIP OCCUPIERS INVESTOR CONTACT: Website: www.embassyofficeparks.com | Email: ir@embassyofficeparks.com | Office: +91 80 6935 4864
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