Embassy Office Parks REIT, India’s first listed REIT and the largest office REIT in Asia by area, has agreed to acquire Embassy Business Hub, a 1.4 million square feet (‘msf’) office property in Bengaluru, for a total enterprise value of Rs 334.8 crore.
Embassy REIT plans to fund the acquisition through debt at an 8.1% interest cost per annum, for which it has secured binding commitments from leading financial institutions.
Vikaash Khdloya, Chief Executive Officer of Embassy REIT, said, “Embassy REIT’s acquisition of this high-quality, well-connected, wellness-oriented business park expands our dominant presence and office offerings in Bengaluru, which undisputedly remains the most sought-after office market in India. This tuck-in acquisition is priced attractively, embeds further growth in the REIT portfolio, and creates long-term value for our Unitholders.”
Embassy Business Hub, a 59-acre campus-style business park, is located in North Bengaluruand is close to both Embassy REIT’s 15.2 msf property Embassy Manyata. Embassy REIT will acquire the
Embassy Sponsor’s affiliates’ share of 1.4 msf total leasable area, of which 0.4 msf is nearing completion and 93% pre-committed to Philips, and the balance 1 msf is in early stages of development.
The company said that the Embassy REIT followed stringent related party safeguards, including securing approval by independent directors of the Board of the REIT Manager and a fairness opinion from Axis Capital Limited to the Board of the REIT Manager.
Additionally, REIT Manager will not receive any fees linked to the acquisition. The acquisition is expected to be completed on or before April 30, 2023, subject to completion of customary conditions precedent.
Ernst and Young LLP provided financial and tax due diligence services and S&R Associates served as the legal advisor to Embassy REIT. Axis Capital Limited provided opinion to the independent directors of the Manager to Embassy REIT for the proposed acquisition and opined that, subject to assumptions and limitations of the scope, the acquisition value is fair, from a financial point of view, to the public Unitholders of Embassy REIT.
Embassy REIT is India’s first publicly listed Real Estate Investment Trust (‘REIT’). Embassy REIT owns and operates a 43.6 msf portfolio of eight infrastructure-like office parks and four city-centre office buildings in India’s best-performing office markets of Bengaluru, Mumbai, Pune, and the National Capital Region (‘NCR’). Embassy REIT’s portfolio comprises 34.3 msf completed operating area and is home to around 230 of the world’s leading companies. The portfolio also comprises strategic amenities, including four operational business hotels, two under-construction hotels, and a 100 MW solar park supplying renewable energy to tenant.
