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Embassy REIT launches QIP to raise USD 500 million

PTI New Delhi | Updated on December 15, 2020

Embassy Office Parks REIT plans to raise USD 500 million (around ₹3,700 crore) through sale of units to institutional investors through QIP to fund its acquisition of commercial asset Embassy TechVillage in Bengaluru.

Embassy REIT is India’s first publicly-listed REIT (Real Estate Investment Trust) sponsored by Blackstone and Embassy group. It got listed on stock exchanges last year.

Last month, Embassy Office Parks REIT had announced that it has agreed to acquire a large business park “Embassy TechVillage” in Bengaluru from realty firm Embassy group, Blackstone and some other investors for ₹9,782.4 crore.

In a regulatory filing, the company said that the board of directors of the Embassy Office Parks Management Services, the manager to the Embassy REIT, has approved the opening of the Qualified Institutional Placement (QIP) on Tuesday for receiving bids.

The board also approved and adopted the Preliminary Placement Document as well as the floor price of ₹348.38 per unit. Embassy REIT did not disclose the size of the QIP but banking sources said it aims to raise USD 500 million.

Last week, unit holders had approved plans to raise up to ₹8,000 crore through sale of units to institutional investors. They approved the acquisition of Embassy TechVillage for an enterprise value of ₹9,782.4 crore and also granted authority to borrow up to 35 per cent of the gross asset value of the Embassy REIT.

The unit holders gave green signal to a preferential issue of up to 6,55,79,400 units of Embassy REIT at a price of ₹356.70 per unit.

The acquisition of Embassy TechVillage comprises of 6.1 million square feet (msf) of completed area, 3.1 msf of under-construction area, and two proposed 518-keys Hilton hotels. The acquisition will increase Embassy REIT’s commercial office portfolio by 28 per cent to 42.4 msf.

“The proposed accretive acquisition of Embassy TechVillage will mark the addition of another trophy asset to our existing office portfolio, while reinforcing our stable cash flows,” Mike Holland, Chief Executive Officer of Embassy REIT, had said.

Embassy TechVillage is a large scale business park located on the leading outer ring road sub-market of Bengaluru, with a diversified blue-chip and predominantly multinational-occupier base, including JP Morgan, Cisco, Sony and Flipkart.

“The acquisition further deepens our presence in Bengaluru, which remains India’s strongest office market, and significantly enhances our scale and ability to deliver embedded growth.

“We are delighted to purchase an asset of the quality and scale of Embassy TechVillage at a 4.6 per cent discount to the average of the two independent valuations,” Holland had said.

Published on December 15, 2020

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