Key Points of Embassy REIT Buys Embassy Business Hub:
- Embassy Office Parks REIT plans to acquire Embassy Business Hub in Bengaluru for a total value of Rs 334.8 crore.
- Upon completion, Embassy REIT will gain exclusive ownership rights to approximately 1.4 million square feet of leasable area.
- The acquisition will be primarily funded through debt, with binding commitments from leading financial institutions at an interest rate of 8.1 percent per annum.
- Embassy REIT will take over the rights, title, and interest of Embassy Construction Pvt. Ltd., the developer of Embassy Business Hub, Bengaluru.
- The acquisition is expected to be completed on or before April 30, 2023, pending customary conditions precedent.
- The total enterprise valuation of the deal is Rs 334.8 crore ($41 million) at a 4.5 percent discount to the average of two independent valuations.
Details of Embassy REIT Buys Embassy Business Hub:
Embassy Office Parks REIT, a real estate investment trust, has announced its plans to acquire the Embassy Business Hub in Bengaluru for a total value of Rs 334.8 crore. Upon completion, Embassy REIT will gain exclusive ownership rights to around 1.4 million square feet of leasable area. The acquisition will be funded primarily through debt, with leading financial institutions providing binding commitments at an interest rate of 8.1 percent per annum.
The deal will see Embassy REIT take over the rights, title, and interest of Embassy Construction Pvt. Ltd., the developer of Embassy Business Hub, Bengaluru. This includes exclusive ownership rights to approximately 1.4 million square feet of leasable area, along with common area maintenance services and infrastructure services.
The acquisition is expected to be completed on or before April 30, 2023, pending customary conditions precedent. The total enterprise valuation of the deal is Rs 334.8 crore ($41 million) at a 4.5 percent discount to the average of two independent valuations.
Embassy REIT expects the acquisition to be attractive, with an anticipated Net Operating Income yield of 8.25 percent, proforma NOI accretion of 104 basis points, and proforma Net Asset Value accretion of 2 basis points, all on a stabilized basis. The acquisition will also secure a Right of First Offer for future phases of Embassy Business Hub, totaling 46 acres, which will extend the REIT’s growth options.
Embassy Office Parks REIT shares are currently trading at Rs 309.61, a 1.5 percent decrease from their previous value.
About Embassy REIT:
Embassy REIT is India’s foremost publicly traded Real Estate Investment Trust, with a vast 42.8 million square feet (“msf”) portfolio that consists of eight office parks and four office buildings located in prime locations such as Bengaluru, Mumbai, Pune, and the National Capital Region (“NCR”). The portfolio includes 33.8 msf of completed operating space that caters to over 214 leading global corporations. Additionally, the portfolio provides access to a range of strategic amenities, including two operational business hotels, four hotels under construction, and a 100 MW solar park that supplies renewable energy to tenants.
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