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Despite robust rent collection, the Covid-19 pandemic has hurt Embassy Office Parks REIT’s second-quarter profit. The company’s profit for Q2 FY21 was flat at 0.14 per cent at ₹232.56 crore on a consolidated basis as against the ₹232.23 crore recorded in the same period last year.
The company’s income rose by 4.69 per cent to ₹563.38 crore as against ₹538.10 crore in the same period last year. EPS for the quarter stood at ₹3.01.
The board of directors of Embassy Office Parks Management Services Private Limited, which manages Embassy REIT, declared a distribution of ₹424.40 crore or ₹5.50 per unit. The recorded date for the distribution is November 10 and the amount would be paid on or before November 17.
Mike Holland, CEO, Embassy REIT said: “Embassy REIT continues to deliver amidst challenging conditions caused by the global pandemic. We have been successful in collecting rents, keeping expenses low, and maintaining a healthy balance sheet. Most notably, we are distributing cash flows to our unit holders that compares to the payouts of the top yield-paying Indian corporates. Our multinational technology occupiers and global captive tenants continue to see strong demand for their services as global businesses bring forward spend on digital transformation, cloud solutions and cybersecurity. We also remain focussed on growth through multiple channels including accretive acquisitions.”
Leasing and renewals
Talking about rental collections for 2Q FY2021 from office occupiers, Holland said collections remained strong at 99.5 per cent, in-line with collections of 99.7 per cent for Q1 FY21 (as of October 30, 2020). “The company’s portfolio occupancy is at 91.7 per cent on our 26.2-million sq ft operating portfolio, with same-store occupancy of 93.4 per cent.”
On new leases and renewals signed for Q2 FY21, he said they stood at 2,10,000 sq ft, including 1,24,000 sq ft of new leases at 10 per cent above market rents; year-to-date (YTD) new leases and renewals stand at 7,35,000 square feet, including 4,10,00 sq ft of renewals at 17 per cent spread to existing rents, he said.
He added that the company has achieved rental increases of 11 per cent on 1.9 million sq ft in Q2 across 18 office leases, with YTD rental increases of 12 percent on 3.7 million sq ft across 40 office leases.
Business continuity
The company continued to support occupiers as they re-populate their offices by launching the #OfficeAgain campaign to engage and update employees on various health and safety initiatives.
“All our properties across India continue to remain open and over 95 per cent of our occupiers and over 16,600 employees operated from our properties in October 2020, compared to 8,500 employees during Q1 FY21,” said Holland.
Construction work continues across the 2.7-million sq ft ongoing development within existing campuses; labour ramp-up at site now at 85 per cent of peak capacity.
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