Embassy Office Parks REIT Completes Strategic Acquisition of Chennai Business Park for Rs 1,185 Crore

Embassy Office Parks REIT has successfully acquired the 50 lakh square feet Embassy Splendid TechZone (ESTZ), a Grade-A business park in Chennai, for Rs 1,185 crore. This acquisition, funded through a Rs 1,200 crore debt raise and internal accruals, marks a significant expansion in Embassy REIT's office assets portfolio and its entry into one of India's leading office markets.

In a regulatory filing, Embassy REIT announced the completion of the ESTZ acquisition, which includes 1.4 million square feet of completed buildings, 1.6 million square feet of under-construction area, and a potential for 2 million square feet of future development. This strategic move increases Embassy REIT's total portfolio to 50.5 million square feet.

Aravind Maiya, Chief Executive Officer of Embassy REIT, expressed satisfaction with the acquisition, emphasizing its alignment with the company’s strategy to enhance its high-quality office portfolio. "This acquisition strengthens our portfolio and facilitates our entry into Chennai", he noted. Maiya also highlighted the decision to finance the acquisition through debt and internal accruals instead of issuing equity, citing the best interests of stakeholders. However, he indicated that the company might consider raising equity in more favorable market conditions.

The business park in Chennai boasts a high occupancy rate of 95 percent for its completed buildings, with tenants including multinational companies like Wells Fargo and BNY Mellon. The acquisition is expected to provide stable cash flows and growth opportunities with its substantial under-construction and future development areas.

Before this acquisition, Embassy REIT’s portfolio consisted of 45.4 million square feet of commercial assets across Bengaluru, Mumbai, Pune, and the National Capital Region (NCR). Its extensive portfolio includes 36.5 million square feet of completed operational space, four operational business hotels, two under-construction hotels, and a 100 MW solar park that supplies renewable energy to its tenants.

Embassy Office Parks REIT, India's first publicly listed Real Estate Investment Trust, continues to strengthen its presence in the commercial real estate market with strategic acquisitions like ESTZ. This move not only expands their footprint but also solidifies their position as a leading player in the Indian office market.