The ESTZ acquisition and an institutional placement through a resolution of Rs 3,000 crore has also been approved by the board of Embassy REIT, subject to unitholder approval.
The total completed area of ESTZ is 1.4 million square feet, of which 95% is occupied by major international corporations including BNY Mellon and Wells Fargo.
On Saturday, Embassy Office Parks REIT announced that it would purchase the Grade-A business park Embassy Splendid TechZone (‘ESTZ‘) from its sponsor, the Embassy group, for an enterprise value of Rs 1,269 crore.
With the proposed purchase, Embassy REIT will make its debut in Chennai, one of the best-performing office markets in India. According to the REIT, its goal is to raise Rs 2,500 crore in unit capital, mainly for funding the acquisition and lowering the portfolio’s existing 30% leverage to free up money for future expansion.
The total completed area of ESTZ is 1.4 million square feet, of which 95% is occupied by major international corporations including BNY Mellon and Wells Fargo.
In addition, there are two million square feet of possible future development space and 1.6 million square feet of under-construction space, of which 0.4 million square feet are preleased.
The ESTZ acquisition and an institutional placement through an enabling resolution of up to Rs 3,000 crore have also been approved by the board of the manager of Embassy REIT, subject to unitholder approval.
“At Embassy Group, our priority is to develop world-class office assets and support the expansion of the REIT’s portfolio through a pipeline of opportunities. This will help it to grow inorganically over the coming years. We are happy to offer another excellent office park in a well-known market like Chennai. We support the ongoing expansion of Embassy REIT following the REIT’s successful acquisition of Embassy TechVillage and Embassy Business Hub in Bengaluru,” stated Jitendra Virwani, chairman and managing director of Embassy Group.
“The proposed accretive acquisition of Embassy Splendid TechZone will mark the addition of another quality asset to our existing office portfolio, which continues to benefit greatly from the demand that Global Capability Centres (GCCs) are demonstrating for Indian office space. With ESTZ, we will expand our portfolio to over 50 msf in a premier micro market in Chennai. It is a first-rate business park. Our position in India is now even more diversified, and this purchase expands our capacity to provide embedded growth to all of our stakeholders”, stated Aravind Maiya, Chief Executive Officer, Embassy REIT.