Embassy Office Parks REIT Announces First Quarter FY 2019-20 Results; Reports Quarterly Distribution of Rs 4,167 Million

/ -- Embassy Office Parks REIT (NSE: Embassy) (BSE: 542602) ('Embassy REIT'), India's first listed REIT and the largest in Asia by area, reported results today for the first quarter ended June 30, 2019.

Distribution The Board of Directors of Embassy Office Parks Management Services Private Limited ('EOPMSPL'), Manager to Embassy REIT, at its Board Meeting held earlier today, declared a quarterly distribution of Rs 4,167 million or Rs. 5.4 per Unit. The record date for the distribution is August 21, 2019 and the distribution will be paid on or before August 27, 2019.

Michael Holland, Chief Executive Officer of Embassy REIT, said, "We are delighted to announce our first quarter results post listing on April 1, 2019 and our first distributions as a publicly listed REIT. We had a strong start to FY2019-20 with both Revenue from Operations and Net Operating Income (NOI) up 19% Year over Year (YoY). This was achieved through our underlying commitment to provide world class and customized office space solutions to corporate occupiers. Our performance also reflects the quality and scale of our portfolio, which continues to deliver impressive organic growth. We have a strong base of low-volatility assets with significant market-to-market potential, a de-risked development pipeline, and a prudent capital management program."
Business Highlights
New leasing during the quarter was 0.6 million square feet (msf) with 50.6% re-leasing spreads
Occupancy as at June 30, 2019 stood at 94.3% on the 24.8 msf completed office portfolio
Near-term office development projects at Embassy Manyata & Embassy Oxygen totaling 1.4 msf are both tracking two quarters ahead of targeted delivery
246,000 sf (or 42% of leasable area) under-construction at Embassy Oxygen Tower 2 was recently pre-leased to a Fortune 50 insurance corporation
The new 230 key Four Seasons Hotel at Embassy One was launched in May 2019 and the development of pipeline 619 key Hilton and Hilton Garden Inn hotels at Embassy Manyata is on track with target completion in 3Q FY2021-22
Financial Highlights
Revenue from Operations for the quarter increased 19% to Rs. 5,351 million as compared to Rs. 4,494 million for the quarter ended June 30, 2018, driven by continued leasing momentum across the portfolio
Net Operating Income (NOI) for the quarter increased 19% to Rs. 4,528 million as compared to Rs. 3,818 million for quarter ended June 30, 2018 with NOI margin for the quarter at 85%
Successfully raised Rs. 30 billion in rupee-denominated, listed non-convertible debentures maturing in June 2022, with a yield to maturity of 9.4%
The REIT continues to maintain a conservative balance sheet with Net Debt to TEV at c. 11%
Vikaash Khdloya, Deputy Chief Executive Officer & Chief Operating Officer of Embassy REIT, said, "Business fundamentals continue to be strong with robust leasing momentum for institutional quality office properties. This was demonstrated by our leasing activity for the quarter as well as our healthy pipeline of c.0.5 msf for the quarter ahead. We remain focused on early delivery of our near-term development projects totaling c.1.4 msf in NCR and Bengaluru, on execution of our asset management initiatives and on achieving further operational efficiencies, all of which would drive portfolio value."
Investor Materials and Quarterly Investor Call Details
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