Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Merger or Acquisition (April 2024)
25 slides from Embassy Office Parks REIT's merger presentation, Apr 6, 2024
Slide 1: Embassy Splendid TechZone Acquisition
Embassy Office Parks REIT Embassy Splendid TechZone Acquisition April 6, 2024 1
Slide 2: Disclaimer
Embassy Splendid TechZone Acquisition Disclaimer By attending the meeting where this presentation (the “Presentation”) is made, or by reading the Presentation materials, you agree to be bound by the following limitations: This Presentation is and is intended exclusively for the intended recipients.
Slide 3: Embassy REIT – Strong Performance Since Listing
Embassy Splendid TechZone Acquisition Embassy REIT – Strong Performance Since Listing Since listing, Embassy REIT has demonstrated strong operational performance and delivered annualized total returns of over 11% 44% 12.0 msf 4.8 msf 17.9 msf Increase in Completed Area Acquisitions(1) New Buildings
Slide 4: Executive Summary
Executive Summary Embassy Splendid TechZone, Chennai
Slide 5: Embassy Splendid TechZone: Compelling Acquisition Opportunity
Embassy Splendid TechZone Acquisition Embassy Splendid TechZone: Compelling Acquisition Opportunity ESTZ is a best-in-class office park that marks Embassy REIT’s entry into a new growth market of Chennai. Acquisition is NOI and DPU accretive to the unitholders, on a proforma basis 5.0 msf campus-s
Slide 6: Attractive Acquisition Pricing
Embassy Splendid TechZone Acquisition Attractive Acquisition Pricing Priced at a 6.7% discount to the average of two independent valuations. Implies 8.5% NOI yield for the completed portion and 10% for the developments and compares favourably to REIT’s trading yield Independent Valuations vs. Embass
Slide 7: Key Acquisition Terms and Indicative Sources and Uses of Funds
Embassy Splendid TechZone Acquisition Key Acquisition Terms and Indicative Sources and Uses of Funds Through the proposed capital raise, Embassy REIT plans to fund the ESTZ Acquisition and reduce REIT’s current leverage by repaying external debt ESTZ Acquisition for an Enterprise Value of ₹12,690
Slide 8: Accretive Across Key Metrics
Embassy Splendid TechZone Acquisition Accretive Across Key Metrics Overall transaction drives 2.9% FY2024 NOI and DPU accretion to the current unitholders and reduces leverage from 30% to 27%, on a proforma basis FY2024 NOI (₹ mn)(1) FY2024 DPU (₹ / unit)(2,3) 31,191 21.86 30,300 2.9% 1.9% 21.47 21.
Slide 9: Why Raise Capital Now?
Embassy Splendid TechZone Acquisition Why Raise Capital Now? Embassy REIT is raising capital from a position of strength to finance growth, given favorable market conditions and continued business momentum Business outlook has materially improved, driven by increasing demand from Global Captive Ce
Slide 10: Strong Governance Framework
Embassy Splendid TechZone Acquisition Strong Governance Framework Following applicable related party transaction safeguards, including unitholder approval Pricing and Enterprise Value of ₹12,690 mn is at a discount of 6.7% to the average of two independent valuations Valuation Acquisition accret
Slide 11: Acquisition Details
Acquisition Details Embassy Splendid TechZone, Chennai
Slide 12: About Embassy Splendid TechZone
Embassy Splendid TechZone Acquisition 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
Slide 13: One of the Largest Integrated Office Parks in Chennai
Embassy Splendid TechZone Acquisition One of the Largest Integrated Office Parks in Chennai 5.0 msf campus-style office park spread over ~26 acres, with 1.4 msf of completed area, 1.6 msf under construction and 2.0 msf future development potential 1.4 msf 1.6 msf 2.0 msf Completed Under Construction
Slide 14: Chennai has Witnessed Market Leading Office Absorption
Embassy Splendid TechZone Acquisition Chennai has Witnessed Market Leading Office Absorption Supported by a well-set education infrastructure and abundant STEM talent, the Chennai office market is currently booming with an influx of multiple Global Captive Centers 3rd Highest Office Absorption Cumul
Slide 15: OMR is One of Chennai’s Fastest Growing Office Sub-Markets
Embassy Splendid TechZone Acquisition OMR 2 is One of Chennai’s Fastest Growing Office Sub-Markets Located 15 mins from the Chennai International Airport, OMR 2 is the location of choice for top multinationals such as Shell, Vestas, Wells Fargo, BNY Mellon and Tekion among others OMR 2 Sub-market(1)
Slide 16: Stable Cash Flows with Strong Embedded Growth
Embassy Splendid TechZone Acquisition Stable Cash Flows with Strong Embedded Growth 95% occupancy in completed area and rental support for 0.4 msf pre-leased area provide high cash flow visibility. Future development potential provides further embedded growth Total Leasable Area (msf) 95% 100%(1) 2.
Slide 17: High Visibility on Near Term Completion
Embassy Splendid TechZone Acquisition High Visibility on Near Term Completion 1.0 msf across two office blocks on track to be completed by June 2025. Of this, 0.4 msf is already pre- leased with a rental support arrangement(1) Block 10 (0.4 msf, 100% Pre-leased) Block 4 (0.6 msf) Expected Completion
Slide 18: Appendix
Appendix Embassy Splendid TechZone, Chennai
Slide 19: ESTZ Acquisition Structure
Embassy Splendid TechZone Acquisition ESTZ Acquisition Structure Pre-Acquisition Post-Acquisition Current simplified structure chart of ESTZ Post-acquisition simplified structure chart (entity proposed to be acquired) (only relevant entities shown) Embassy Unitholders Sponsor 100% 100% ESNP(1) ESNP(
Slide 20: ESTZ Diversifies Embassy REIT’s Portfolio and Enhances Scale
Embassy Splendid TechZone Acquisition ESTZ Diversifies Embassy REIT’s Portfolio and Enhances Scale ESTZ Acquisition further diversifies Embassy REIT’s portfolio by facilitating entry into the Chennai office market Existing Proforma Total Leasable 45.4 50.5 Area (msf)(1) Completed NCR (6%) 35.8 37.2
Slide 21: NOI to NDCF Walk for the Transaction
Embassy Splendid TechZone Acquisition NOI to NDCF Walk for the Transaction Particulars ₹ mn Remarks ESTZ Acquisition Impact Contracted NOI(1) 891 − For Blocks 2, 3, 9, 10 (rental support) and food court − Interest of ₹85 mn is on ₹1,000 mn target debt assuming 8.50% cost Interest Cost on External De
Slide 22: Scenario Analysis
Embassy Splendid TechZone Acquisition Scenario Analysis Sensitivity analysis of Embassy REIT’s proforma DPU accretion at various quantum and prices for the issue of units in an Institutional Placement Scenario I: All CPs met(1) Issue Price (₹ / unit) Institutional Placement (₹ mn) LTV (%) 356.66 375
Slide 23: Notes
Embassy Splendid TechZone Acquisition Notes 1. All figures corresponding to year denoted with “FY” are as of or for the one-year period ending (as may be relevant) 31st March of the respective year. Similarly, all figures corresponding to year denoted with “CY” are as of or for the one-year period e
Slide 24: Key Terms & Definitions
Embassy Splendid TechZone Acquisition Key Terms & Definitions 1. ATL – Agreement to Lease 37. NSE – National Stock Exchange of India Limited 2. Base Rentals – Rental income contracted from the leasing of Completed Area; includes fit-out and 38. OC – Occupancy Certificate car parking income 39. Occup
Slide 25: Embassy Splendid TechZone Acquisition
Embassy Splendid TechZone Acquisition
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