Embassy REIT reports marginal decline in Q1 net profit at Rs 204 cr

Embassy Office Parks REIT on Thursday reported a marginal decline in its consolidated net profit to Rs 204.23 crore for the quarter ended June as the hospitality business was affected due to lockdown.

It announced distribution of Rs 449.9 crore to its unitholders as dividend and interest income.

The company's profit stood at Rs 222.03 crore in the year-ago period.

Total income also dipped to Rs 549.23 crore in the first quarter of the current fiscal from Rs 554.1 crore in the corresponding period of the previous year.

The board of directors of Embassy Office Parks Management Services, which is a manager to Embassy REIT, declared a distribution of Rs 449.9 crore or Rs 5.83 per unit.

The record date for the distribution is August 14, 2020, and the distribution will be paid on or before August 21, 2020. Embassy Office Parks REIT is the country's first REIT which was listed in April last year.

Mike Holland, Chief Executive Officer, Embassy Office Parks REIT said: Amidst challenging market conditions, we are pleased to report a resilient set of results this quarter, marked by robust office rental collections, a healthy distribution payout, and our strong financial position."

"We remain well-positioned to meet the anticipated increase in demand over the coming quarters for institutional-grade office space, and to capitalise on the continued consolidation in the office market given considerable future supply shrinkage," he said.

The rental collections from office occupiers remained robust at 98.9 per cent, Holland said in a virtual press conference.

Portfolio occupancy remained healthy at 92.2 per cent on its 26.2 million operating office portfolio.

The company signed lease agreements of 5,26,000 sq ft, including 2,01,000 sq ft of new leases at market rents, and 3,25,000 sq ft of renewals at 20 per cent spreads to existing rentals.

It achieved rental increases of 14 per cent on 1.8 million sq ft from 22 office leases across the portfolio.

Embassy REIT said the net operating income was Rs 456.9 crore, up 1 per cent year-on-year mainly due to resilient commercial office revenues despite the adverse impact of COVID-19 pandemic on the hospitality business.