29 Jan , 2022 By : monika singh
Embassy Office Parks REIT has received a right of first offer ('ROFO') notice from one of its sponsors, Embassy Group, for a Chennai property, Embassy Splendid TechZone. The deal is expected to be valued at over Rs 2,500 crore.
"The acquisition, which comprises nearly 5 million sq ft of office assets in Old Pallavaram, Chennai, is expected to take around six months and is under review," said two people aware of the deal.
The property is currently under construction and has 1.4 million sq ft of completed and leased space to clients like BNY Mellon, Accenture and Wells Fargo. The entire asset is expected to be completed over the next three years. Once concluded, this will be the second acquisition from the Embassy REIT sponsor in the last two years.
In 2021, Embassy Office Parks REIT acquired Embassy TechVillage through a ROFO agreement from the affiliates of Embassy Sponsors - Blackstone and Embassy Group - for Rs 9,782 crore and completed the property's integration. "We have not done assessment on the valuation of the project and are yet to get the detailed work done on it," said Michael Holland, CEO of Embassy REIT.
Income Increases
The largest office REIT in Asia by area has reported a 30% year-on-year increase in quarterly net operating income ( NOI) with an operating margin of 84%.
"We continue to see multiple positive indicators for our business. Positive leasing momentum gives us the confidence to increase guidance for the full-year FY22 as we look beyond the external challenges of the past two years," said Holland.
Embassy REIT raised FY2022 full-year guidance for both net operating income (NOI) and distribution per unit ('DPU'); NOI estimate is up by 3% to Rs 2,450 crore.
The company has raised its FY22 full-year guidance for new leasing from 400 000 sq ft to 1 million sq ft.
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