Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Webinar for Axis Bank Wealth Managers (September 2023)
44 slides from Embassy Office Parks REIT's conference presentation, Sep 22, 2023
Slide 1: Exchange intimation letter: webinar for Axis Bank Wealth Managers
September 22, 2023 To, To, The Corporate Relations Department, The Corporate Relations Department, The National Stock Exchange of India Limited, Department of Corporate Services, Exchange Plaza, 5th Floor, BSE Limited, Plot No. C/1, G-Block, Bandra-Kurla Complex, 25th Floor, Phiroze Jeejeebhoy Tower
Slide 2: Embassy Office Parks REIT Discussion Materials
Embassy Office Parks REIT Discussion Materials September 2023
Slide 3: Executive Summary
Discussion Materials Executive Summary Important aspects about Indian REITs that Wealth Managers should know and should tell their clients REITs have been globally accepted for 60 years and constitute 60% of global listed real estate market cap REITs are not debt instruments and should not be co
Slide 4: Introduction to REITs
India REIT Primer Introduction to REITs Embassy TechVillage, Bangalore
Slide 5: REITs: Globally Accepted For 60+ Years
Discussion Materials REITs: Globally Accepted For 60+ Years History of REIT Launches in Major Economies Australia Singapore Thailand India 1960 1971 1989 2001 2002 2003 2004 2007 2019 2020 USA Malaysia South Korea Japan Hong Kong Germany UK Philippines 900+ ~$2 trillion ~60% REITs launched globally
Slide 6: Why Invest in Indian REITs?
Discussion Materials Why Invest in Indian REITs? Accessibility Transparency Liquidity Ownership in Strong governance REIT units are freely traded professionally-managed framework and disclosure in stock markets like equity Grade A commercial assets requirements from SEBI shares Distributions Growth
Slide 7: What Assets Can an Indian REIT Own?
Discussion Materials What Assets Can an Indian REIT Own? PERMITTED NOT PERMITTED NOT Commercial PERMITTED Sectors Residential (houses, apartments) Offices, hotels, retail, industrial, healthcare Speculative landbank Min. 80% Conservative completed & rent/ income Debt Limit generating assets Unithold
Slide 8: Simple REIT Business Model
Discussion Materials Simple REIT Business Model Grade A Office Rents Paid by the world’s best companies (+) Income from Amenities / Maintenance Hotel / Renewable Energy (-) Property Tax, Maintenance, Insurance Cost of running buildings Net Operating Income (NOI) Over 70% up since listing (fo
Slide 9: Snapshot of Indian REITs
Discussion Materials Snapshot of Indian REITs The Indian REIT market continues to evolve since the listing of the first REIT in April 2019 4 REITs - 112 msf(1) ₹ 778 Bn ₹ 255 Bn Across India’s top commercial office / retail markets Market Capitalization Primary Equity Proceeds Raised Since 2019 ₹ 12
Slide 10: Listed REIT Landscape in India
Discussion Materials Listed REIT Landscape in India Embassy REIT Mindspace REIT Brookfield India Nexus Select REIT Trust REIT Ticker (NSE) EMBASSY MINDSPACE BIRET NXST Ticker (BSE) 542602 543217 543261 543913 Listing Date April 01, 2019 August 07, 2020 February 16, 2021 May 19, 2023 Market Capitaliz
Slide 11: Widespread Acceptance of REITs
Discussion Materials Widespread Acceptance of REITs Embassy REIT’s unitholder base continues to expand and diversify since listing; public float well distributed among institutions and retail unitholders Evolving Unitholder Base Increasing Acceptance of REIT as an Investment Class Sponsors – 70% Spo
Slide 12: Embassy REIT Overview
India REIT Primer Embassy REIT Overview Hilton Hotel Complex, Embassy Manyata
Slide 13: Who We Are: Quick Facts
Discussion Materials Who We Are: Quick Facts Embassy REIT owns and operates a commercial office portfolio that serves as essential corporate infrastructure to global occupiers, including many technology companies 45.0 msf(1)(2) 230 86% Portfolio Blue-chip Occupancy occupiers 13 1,614(2) 100 MW NCR (
Slide 14: Nine Infrastructure-like Office Parks
Discussion Materials Nine Infrastructure-like Office Parks Embassy Manyata Embassy TechVillage Embassy Business Hub Bangalore (15.2 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) Embassy Oxyg
Slide 15: Four Prime City-center Offices
Discussion Materials Four Prime City-center Offices Express Towers FIFC Mumbai (0.5 msf) Mumbai (0.4 msf) Embassy 247 Embassy One Mumbai (1.2 msf) Bangalore (0.3 msf) 14
Slide 16: High Quality, Diversified Occupier Base
Discussion Materials High Quality, Diversified Occupier Base Global Captives and Tech occupiers constitute over 70% of our occupier base Industry Diversification(1) Top 10 % of Sector Occupiers Rentals Technology Financial Services 36% 21% JP Morgan Financial Services 6.7% Global Technology Technolo
Slide 17: India: The Office to the World
Discussion 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 Continues GC
Slide 18: Bangalore is Asia's and India's Leading Office Market
Discussion Materials Bangalore is Asia’s and India’s Leading Office Market Embassy REIT’s portfolio concentration in Bangalore is competitive advantage Largest Tech, Innovation and GCC Hub Dominant share of Leasing Demand in H1 CY23(5) 30% Total Indian GCCs in Bangalore Bangalore (1) 28% H1 CY23 Oth
Slide 19: Leasing Update
Q1 FY2022 Earnings Materials Leasing Update Embassy TechVillage, Bangalore
Slide 20: Continued Leasing Momentum
Discussion Materials Continued Leasing Momentum Leased 1.1 msf across 22 deals in Q1 at 39% spreads, including new lease up of 407k sf and pre- commitments of 448k sf Area (msf) FY24 Guidance: 1.1 msf 6.0 msf Total Lease-up(1) 5.1 407k sf 3.9 3.8 New Leases at 68% Re- leasing Spreads 3.2 2.9 2.2 3.4
Slide 21: Leasing Highlights for the Quarter
Discussion Materials Leasing Highlights for the Quarter 71% of Q1 leasing by GCCs, spanning multiple sectors such as research, consulting and analytics, and engineering and manufacturing Area Q1 leasing driven by GCCs Occupier Property Sector ('000 sf) New Leases 407 Research, Consulting Others ANSR
Slide 22: Embedded Rent Growth
Discussion Materials Embedded Rent Growth Secured 22% rent escalations on 1.1 msf and achieved 15% spreads on 209k sf renewals. 0.7 msf exits offer significant 26% MTM potential Embedded Rent Escalations of ~15% aids NOI Growth 26% of Leases Expire Between FY2024–27 Area (msf) Area Expiring (msf) 81
Slide 23: Development Update
Q1 FY2022 Earnings Materials Development Update Embassy TechVillage – JP Morgan BTS, Bangalore
Slide 24: Focused Growth Investments
Discussion Materials Focused Growth Investments 7.9 msf active development at highly attractive yields with over 90% concentrated in Bangalore, India’s best office market Development Pipeline(1) (msf) Current Development Status Area (msf) Towers A, B, C & D – Basement works in advanced stage and s
Slide 25: Project Progress at Site
Discussion Materials Project Progress at Site Embassy Manyata – M3 Block A (1.0 msf) Embassy Manyata – M3 Block B (0.6 msf) Design Perspective Perspective Perspective Targeting Aug’23 delivery Targeting Mar’25 delivery Actual Progress at Site(1) Actual Picture Actual Picture Note: (1) Jul’23 Picture
Slide 26: Project Progress at Site (Cont'd)
Discussion Materials Project Progress at Site (Cont’d) Embassy Manyata – L4 Block (0.7 msf) Embassy TechVillage – Block 8 (1.9 msf) Design Perspective Perspective Perspective On-track for Jun’25 delivery On-track for Sep’24 delivery Actual Progress at Site(1) Actual Picture Actual Picture Note: (1)
Slide 27: Project Progress at Site (Cont'd)
Discussion Materials Project Progress at Site (Cont’d) Embassy Business Hub – Phillips BTS (0.4 msf) Embassy Oxygen – Tower 1 (0.7 msf) Design Perspective Perspective Perspective On-track for Sep’23 delivery On-track for Nov’23 delivery Actual Progress at Site(1) Actual Picture Actual Picture Note:
Slide 28: Financial Update
Q1 FY2022 Earnings Materials Financial Update Embassy TechZone, Pune
Slide 29: Robust Financial Performance
Discussion Materials Robust Financial Performance NOI and EBITDA for Q1 up 9% and 12% YoY respectively, with overall NOI and EBITDA margins at 81% and 80% respectively Q1 FY2024 Q1 FY2023 Variance % Remarks (mn) (mn) Revenue from new lease-up at attractive re-leasing spreads Revenue and contractua
Slide 30: Delivering on Distributions
Discussion Materials Delivering on Distributions Delivered distributions of ₹5,100 mn or ₹5.38 per unit, marking 17th quarter of 100% distribution payout. Cumulative distributions of over ₹83 billion since listing Distribution Highlights Distribution Mix – Q1 FY2024 Particulars Q1 FY2024 Distributio
Slide 31: Conservative Balance Sheet with Active Debt Management
Discussion Materials Conservative Balance Sheet with Active Debt Management Raised ₹21 bn at an average rate of 7.8%, achieved our lowest-ever 120 bps rate spread over G-Sec and secured 146 bps proforma savings vs the expected repriced rate on these loans Significant Portion of Debt at Fixed Interes
Slide 32: Attractive Post-Tax Yield Coupled with Capital Appreciation
Discussion Materials Attractive Post-Tax Yield Coupled with Capital Appreciation Low Risk High Risk Post Tax Post Tax Post Tax Post Tax Yield: 4.3% Yield: 4.4% Yield: 4.4% Yield: 6.7% 19.9% 14.4% 19.4% 7.9% 12.8% 0.9% 7.0% 7.2% 7.2% 7.0% 1.6% (4) 0.5% (1) (2) (3) Fixed Deposit Rate 10 Yr G-Sec Debt
Slide 33: Growing Unitholder Base
Discussion Materials Growing Unitholder Base Unitholder base continues to expand and diversify since listing; public float well distributed among institutions and retail unitholders Evolving Unitholder Base Increasing Acceptance of REIT as an Investment Class Sponsors – 70% Sponsors – 31% Public Flo
Slide 34: Growth Outlook
Q4 FY2023 Earnings Materials Growth Outlook Embassy Business Hub, Bangalore
Slide 35: Multiple Embedded Growth Levers
Discussion Materials Multiple Embedded Growth Levers Embassy REIT’s strategy focuses on enhancing NOI and delivering long term total return value for Unitholders, driven by rental growth as well as leased area expansion 5.1 msf Vacant Area lease-up New developments over the next 4 years with ₹90
Slide 36: Full Year FY2024 Guidance
Discussion Materials Full Year FY2024 Guidance FY24 NOI Guidance of ₹29 to ₹31 bn and distributions guidance of ₹20.5 to ₹22.0 per unit assumes 6.0 msf of gross leasing during the year Delivered on Guidance Even in Challenging Markets Key Assumptions for FY24 Guidance Distributions (₹ mn) Pre-commit
Slide 37: Appendix
Q1 FY2022 Earnings Materials Appendix Embassy Galaxy, Noida
Slide 38: Portfolio Summary
Discussion Materials Portfolio Summary 34.3 msf completed Grade A office assets (85% occupied, 6.6 years WALE, 15% MTM opportunity) Leasable Area (msf)/Keys/MW (2) (2) Occupancy Rent (₹ psf / mth) (3) (3) WALE GAV Property Completed Development Total (yrs) (%) In-place Market MTM (%) ₹ mn % of total
Slide 39: Embassy REIT Structure
Discussion Materials Embassy REIT Structure Blackstone Embassy Sponsor Group Sponsor Entity 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% 10
Slide 40: Walkdown of Key Financial Metrics
Discussion Materials Walkdown of Key Financial Metrics Particulars (₹ mn) Q1 FY2024 Q1 FY2023 YoY Variance (%) Q4 FY2023 QoQ Variance (%) Revenue from Operations 9,136 8,294 10% 8,676 5% NOI Property Taxes and Insurance (326) (295) 10% (355) (8%) Direct Operating Expenses (1,434) (1,226) 17% (1,519)
Slide 41: ESG Memberships, Certifications and Awards
Discussion Materials ESG Memberships, Certifications and Awards ESG memberships, certifications and performance on global benchmarks reflect our commitment to sustainability, transparency and operational excellence Certifications Building ESG Benchmarks CSA Awards Notes: (1) USGBC LEED Platinum ‘v4.
Slide 42: Regulatory Framework for Indian REITs
Discussion Materials Regulatory Framework for Indian REITs India REITs have to adhere to a strong SEBI regulatory framework aimed at protecting unitholder value ⯈ Minimum 80% of value in completed and rent/income generating assets – hence, less risk to cash Asset and Distributions ⯈ flows Restrictio
Slide 43: Disclaimer
Discussion 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 objectives,
Slide 44: Investor Contact
Investor Contact: Website: www.embassyofficeparks.com | Email: ir@embassyofficeparks.com | Office: +91 80 4722 2222
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