Embassy REIT, India’s first listed real estate investment trust will buy the property maintenance business of Embassy Manyata Business Park in Bengaluru and Embassy Tech Zone in Pune.
Both the properties are part of Embassy REIT’s existing portfolio and the acquisition further integrates 20.3 million sq ft of property maintenance business to the existing 9.9 million sq ft properties already managed by Embassy REIT, the company said in a stock exchange filing on Thursday.
The acquisition value is around ₹474 crore, said a person familiar with the development.
“In addition to enhancing our operating income, this transaction fully integrates and aligns property management for all REIT assets and helps further strengthen operational relationships with our occupiers. It will allow us to enhance service delivery, which is particularly important to our occupiers as they finalize ‘Back to Workplace’ strategies,” said Michael Holland, CEO of Embassy REIT.
Embassy REIT is acquiring the property maintenance businesses from Embassy Services Private Limited, an Embassy Group affiliate and expects to fund the transaction by issuing coupon-bearing debt at the REIT level.
This strategic acquisition is expected to be net operating income accretive and distribution per unit accretive and enhances the REIT’s ability to respond to occupier needs and address their safety concerns during the current pandemic situation, the company said.
Once the deal is closed, Embassy REIT will own the property management service delivery for all its fully-owned properties.
The transaction is expected to be completed March 2021.