Embassy Office Parks REIT · NSE:EMBASSY.RR
Embassy Office Parks REIT — Prabhudas Lilladher Webinar (June 2020)
28 slides from Embassy Office Parks REIT's conference presentation, Jun 23, 2020
Slide 1: Embassy Office Parks REIT Discussion Materials – Prabhudas Lilladher Webinar
Embassy Office Parks REIT Discussion Materials – Prabhudas Lilladher Webinar June 23, 2020 1
Slide 2: I. Overview
I. Overview . Express Towers, Mumbai
Slide 3: What is a REIT?
What is a REIT? REIT stands for Real Estate Investment Trust A REIT is a trust that owns, operates or finances income-producing real estate • REITs give all investors access to the benefits of real estate investment with the advantage of investing in publicly traded units A REIT is a tax-effic
Slide 4: Embassy REIT Structure
Embassy REIT Structure Blackstone Embassy Sponsor Groups Sponsor Entity Public Unitholders Management Embassy Services Trustee REIT Manager (Axis Trustee) Acts on Behalf of (EOPMSPL) Unitholder 100% Embassy Office Parks Private Limited (Embassy TechZone)(2) 36% 80% 50%(1) 100% 100% 100% 100% 100% 10
Slide 5: Who We Are: Quick Facts
Who We Are: Quick Facts We run a commercial office portfolio that serves as essential corporate infrastructure to global occupiers, including many Fortune 500 corporations 33.3 msf(1) 160+ 92.8% Portfolio Blue-chip Occupancy occupiers 11 1,096(1) 100 MW NCR (9%) Commercial Hotel Keys Solar Park Offi
Slide 6: Office Portfolio with Strong Balance Sheet
Office Portfolio with Strong Balance Sheet Predominantly an office REIT with commercial office segment contributing over 90% of NOI, supported by our conservative balance sheet with low debt of c.15% Net Debt to TEV Contribution by Asset Type Contribution by Construction Status Leverage Profile Othe
Slide 7: Our Opportunity: India as the Global Technology Innovation Hub
Our Opportunity: India as the Global Technology Innovation Hub India to continue to attract global technology corporations due to availability of highly educated and skilled talent at a reasonable cost. COVID-19 response likely to accelerate technology spends globally India Advantage FY2020 Performa
Slide 8: Our Occupier Base
Our Occupier Base Global business with a diversified and high credit quality occupier base Industry Diversification(1) c.42% of Gross Rentals Originate From Top 10 Occupiers Top 10 % of Sector Occupiers Rentals Financial Technology Services IBM Technology 12% 50% 12% Cognizant Technology 9% Research
Slide 9: Office Rentals Across the Globe
Office Rentals Across the Globe Key commercial markets in India offer significantly lower rentals compared to global commercial hubs Major Global Cities - Rents Comparison (Q4 2019, US$ psf / year) 142.5 120.0 109.0 110.0 103.0 72.0 67.7 61.6 55.0 48.0 37.3 23.6 14.9 14.5 14.3 Munich Tokyo Los Angel
Slide 10: II. Our Performance
4Q FY2020 Earnings Materials II. Our Performance Embassy Manyata, Bengaluru
Slide 11: Business Highlights for FY2020
Business Highlights for FY2020 Strong business performance and distribution mainly driven by robust leasing, mark-to-market rental reversions and early delivery of on-campus development projects Operating Levers Performance Returns New lease-up of c.2.4 msf to 25+ occupiers Re-leased c.1.1 msf a
Slide 12: Financial Highlights for FY2020
Financial Highlights for FY2020 Revenue from Operations and NOI for FY2020 up c.14% and c.15% respectively YoY. NOI and EBITDA margins stood at c.85% and c.82% respectively due to scale efficiencies and cost optimization efforts FY2020 FY2019 Variance % Remarks (mn) (mn) Revenue Contracted lease e
Slide 13: Key Drivers of Net Operating Income
Key Drivers of Net Operating Income NOI for FY2020 was higher by c.15% YoY with contracted escalations, new lease-up and MTM contributing over 95% of YoY increase Net Operating Income (₹ mn) 181 (97) 1,132 1,174 38.8 18,170 15,741 FY2019 Contracted Vacancy lease-up Development Others FY2020 Revenue
Slide 14: Embassy REIT v/s Key Overseas Markets
Embassy REIT v/s Key Overseas Markets In FY20, Embassy Office Parks REIT outperformed the broader indices in India as well as the major global REIT indices and equities Relative Share Price Performance April 1, 2019 – March 31, 2020 (%) 16.9% (8.5)% (8.8)% (19.6)% (22.8)% (24.1)% (24.7)% (34.0)% Emb
Slide 15: Embassy REIT v/s Key Listed Indian RE Players
Embassy REIT v/s Key Listed Indian RE Players In FY20, Embassy Office Parks REIT outperformed all key listed Indian RE players & delivered c. 25.0% total return Total Return FY20 (₹ Mn.) -40.4% 25.0% Avg. Total Returns (12.8)% (25.8)% (29.8)% (31.7)% (35.5)% (45.8)% (49.3)% (50.3)% (53.7)% (69.5)% E
Slide 16: Embassy REIT v/s Select Indian Asset Classes
Embassy REIT v/s Select Indian Asset Classes In FY20, Embassy Office Parks REIT delivered higher pre-tax return than broader indices in India as well as select Indian asset classes Pre-Tax Return FY20 (%) Price Distribution Yield 8.1% 16.9% Return 7.6% 6.7% 6.3% (22.9)% (24.7)% (34.0)% Embassy AAA B
Slide 17: Post-Tax Yields: Across Investor Classes
Post-Tax Yields: Across Investor Classes As of Mar’20, Embassy Office Parks REIT delivered post-tax yields of 6.7 – 8.1%, depending on the investor classification Tax on Interest Component FY20 Yields Investor Type Withholding Tax Total Tax Pre Tax Post Tax Institutional Investors FII (Singapore, Ma
Slide 18: III. Our Portfolio – 'Total Business Ecosystem'
4Q FY2020 Earnings Materials III. Our Portfolio – ‘Total Business Ecosystem’ Hilton at Embassy GolfLinks, Bengaluru
Slide 19: Seven Infrastructure-like Office Parks (31 msf)
Seven Infrastructure-like Office Parks (31 msf)(1) Embassy Manyata Embassy Quadron Bengaluru (14.8 msf) Pune (1.9 msf) Embassy GolfLinks Embassy TechZone Bengaluru (2.7 msf) Pune (5.5 msf) Embassy Oxygen Embassy Galaxy Embassy Qubix Noida (3.3 msf) Noida (1.4 msf) Pune (1.5 msf) Note: (1) Includes c
Slide 20: Four Prime City-center Offices (2.3 msf)
Four Prime City-center Offices (2.3 msf) Express Towers FIFC Mumbai (0.5 msf) Mumbai (0.4 msf) Embassy 247 Embassy One Mumbai (1.2 msf) Bengaluru (0.3 msf) 20
Slide 21: Embedded Mark-to-Market Growth
Embedded Mark-to-Market Growth Of c.1.4 msf ultimate lease expiries in FY2021, advanced lease discussions underway for c.32% of rent expiries Market rents are c.30% above in-place rents c.25% of leases expire between FY2021–24 Area Expiring (msf) Rent (₹ psf / month) 3.1 Average Lease Expiries ~ 6.2
Slide 22: Development Pipeline
Development Pipeline Evaluating potential impact of COVID-19 on supply chain disruptions and labour migration challenges, likely impact on delivery timelines of c.2.6 msf ongoing on-campus office projects by 1-2 quarters Development Pipeline(1) (msf) Development Status as of May 19, 2020 Embassy Man
Slide 23: Embassy Manyata (Front Parcel)
Embassy Manyata (Front Parcel) NXT office blocks delivered in Dec’19 is c.75% committed. COVID-19 disruptions likely to impact delivery of 619 key dual branded Hilton hotels by 2 quarters, completion now estimated in Jun’22 Hilton Garden Inn NXT Office Tower 2 (3-Star) 353 keys 392k sf Hilton 58k sf
Slide 24: Hospitality Portfolio
Hospitality Portfolio 477 hotel keys under operation and additional 619 keys under development at Embassy Manyata with target launch in Jun’22 Hilton at Embassy GolfLinks Four Seasons at Embassy One Hilton Hotels at Embassy Manyata 247 Keys 230 Keys 619 Keys 5-Star Hotel 5-Star Luxury Hotel 5-Star &
Slide 25: Resilient Business – Navigating COVID-19 Impact
Resilient Business – Navigating COVID-19 Impact Our high-quality properties, diverse creditworthy occupiers and disciplined balance sheet will help in navigating near-term COVID-19 challenges Landlord of choice with a high-quality difficult-to-replicate office portfolio in gateway cities providing
Slide 26: Key Takeaways: Our Strategy
Key Takeaways: Our Strategy We continue to focus on maintaining high occupancy levels and maximizing NOI, growing our existing campuses and prudently managing our capital On-Campus Capital Leasing Acquisitions Development Management Capitalize on record Deliver ongoing campus Actively seek abs
Slide 27: Disclaimer
Disclaimer This presentation should be read in conjunction with the 4Q FY2020 Earnings materials published by Embassy REIT on its website on May 19, 2020. This presentation is prepared for Unitholders and issued by Embassy Office Parks Management Services Private Limited (the “Manager”) in its capac
Slide 28: Thank You
EMBASSY OFFICE PARKS & ats WHERE THE WORLD COMES TO WORK Thank You Investor Contact: Website: www.embassyofficeparks.com | Email: ir@embassyofficeparks.com | Office: +91-80-3322 2222
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