Embassy Office Parks REIT to gain from Covid-19 situation, says CEO

Embassy Office Parks REIT has reported a 10 per cent year-on-year rise in net operating income for the quarter ended March at Rs 461.8 crore. India’s first listed Real Estate Investment Trust (REIT) reported 8 per cent growth in revenue at Rs 543.9 crore,
said the company.

The company declared a distribution of Rs 531.7 crore or Rs 6.89 per unit for the fourth quarter of FY20. It also said that Covid-19 did not have an impact on rent, and collections from office occupiers remained strong at 92 per cent for April.

“We have had requests for leniency from our smaller tenants who are running creches or operating food courts, who account for less than 1 per cent of our revenue. About 75 per cent of our clients are international tenants who have high compliance standards. They will not accept products that are below par in order to save a few rupees on rentals,” said Michael Holland, chief executive officer, Embassy REIT.

While the Covid-19 pandemic has resulted in an uncertain near-term outlook for many businesses worldwide, Holland said Embassy REIT is uniquely positioned to weather the pandemic. “While demand is likely to moderate considerably through 2020, we believe that in this environment, Grade-A supply will reduce considerably over the medium term, consolidation in the office market will continue and high-quality institutional landlords, such as Embassy REIT, will gain market share,” explained Holland.

The company said it achieved an overall occupancy of 92.8 per cent on 26.2 msf operating office portfolio and leased 389000 square feet new area during the fourth quarter.