CRISIL has Reaffirmed 'CRISIL AAA / Stable' Rating on INR 36.5 Billion NCDs of Embassy Office Parks REIT
Embassy Office Parks REIT rose 1.17% to Rs 347 after the company's net operating income grew 10% to Rs 461.80 crore in Q4 March 2020 over Q4 March 2019.
Revenue from operations grew 8% to Rs 543.40 crore in Q4 March 2020 over Q4 March 2019.
Distribution for Q4 March 2020 of Rs 531.70 crore or Rs 6.89 per unit, representing 100% payout ratio. The record date for the Q4 distribution is 28 May 2020 and the distribution will be paid on or before 3 June 2020.
For the full year FY 2020, net operating income and revenue from operations grew by 15% to Rs 1817 crore and 14% to Rs 2144.9 crore. The result was announced after market hours yesterday, 19 May 2020.
The company said it had strong balance sheet with ample liquidity and low leverage of 15% net debt to TEV (Total Enterprise Value) as of 31 March 2020, existing cash and undrawn committed facilities totals Rs 1350 crore and only 1.3% of total debt matures in the next two years.
The company said it achieved overall occupancy of 92.8% on 26.2 million square feet (msf) operating office portfolio, with same-store occupancy of 94.5% considering March 2019 as base year.
It leased 389,000 sf new area during the fourth quarter, with full year lease-up of 2.4 msf being the highest absorption in previous 5 years. The firm re-leased 1.1 msf during the year at 53% releasing spread, renewed an additional 600,000 sf at 19% renewal spread, illustrating the embedded growth in our portfolio. The company delivered 1.4 msf new office buildings within existing campuses during the year, 62% of these new completions already committed.
Vikaash Khdloya, Deputy CEO and COO, said, Our Q4 operating performance was resilient, led by business continuity support for our occupiers and employee wellness support. We would like to thank all our employees, the civic authorities, and healthcare professionals who continue to work tirelessly during this challenging period. Our immediate focus remains ensuring the health and safety of all our stakeholders as they return to work in our parks.
Michael Holland, Chief Executive Officer, said, "We are very pleased with our strong business performance in fiscal 2019-20. Since Embassy REIT listed in April 2019, we have delivered a total return of 25 per cent. Our fourth quarter income and distribution payout once again illustrate the stability and resilience of Embassy REIT delivering cash flows that are backed by the covenants of our 160 plus largely multinational occupier base."
He added: "While the Covid-19 pandemic has resulted in an uncertain near-term outlook for many businesses worldwide, we are uniquely positioned to weather this pandemic-induced storm with our best-in-class office portfolio and strong balance sheet. 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."
COVID-19 Update: The company activated its business continuity plan on 4 March, and its centralised taskforce focussed on ensuring safe workspaces, on-premise health screenings, and business continuity for occupiers.
The company's properties remained open to support core business functions of its occupiers throughout the national lock-down within the parameters laid out by the government. Rent collections from office occupiers remained strong at cumulatively 92% for April.
The company halted all construction activity and hotel operations to comply with government directives during the lock-down. The firm will resume these activities once the government eases lockdown restrictions.
Embassy Office Parks is India's first and only listed REIT. Embassy REIT comprises 26.2 msf of completed and operational commercial properties across India.
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