Embassy Office Parks REIT, the largest office real estate investment trust in Asia by area, does not see any significant impact of Omicron or rising Covid cases either on rentals or on (office space) absorption.

In fact, the company — India’s first listed REIT - says it is “on track” with its Q3 FY22 (October - December) guidance on operating income and dividends. The company had previously in Q2 earnings call announced leasing pipeline to be the tune of 500,000 sq ft. In July-September period, it leased 713,000 sq ft of space.

According to Vikash Khdloya, Deputy CEO & COO, Embassy REIT, there could be “some short-term delays” in signings, while the overall “deal pipeline remains strong”.

Khdloya told BusinessLine, demand for Grade A office supplies, larger space with better seating arrangements and an increased focus on wellness and safety have only shot up post the pandemic. Offices are becoming more conscious of such arrangements at the time of getting into new leases.

Rentals too have remained strong with nearly 99 per cent collection ratio, indicating no material impact.

“We remain very positive on the sector and the increasing demand for high quality office space by technology and global captives which will benefit institutional landlords like Embassy REIT,” he said.

Embassy Office Parks REIT saw a 30 per cent rise, y-o-y, in operating income for Q2FY22 to ₹624 crore. It declared distributions (interest, dividend and proceeds of amortisation of special purpose vehicle) of ₹537 crore, or ₹5.66 per unit for the quarter ending September 2021.


According to Khdloya, the company is also planning to expand beyond its core markets - Bengaluru, NCR - Noida, Pune and Mumbai. Bengaluru alone accounts for over 70 per cent of its total area under management. New cities where it is exploring additions include Chennai and Hyderabad - the two other growing markets in addition to cities where Embassy REIT already has a presence.

Apart from own development, it would also explore acquisitions - with Institutional and Grade A business parks being a favorable option.

“Large scale development with international grade setups leased to global occupiers is something we would look at for expansion purposes,” he said adding that the company can explore fund raising options through an optimum mix of debt and equity. It can access both debt and equity markets for capital raise.