Block deal: Embassy REIT in focus on report Blackstone likely to sell entire stake today

Embassy Office Parks REIT, a real estate investment trust, will be in focus on Wednesday morning after a media report suggesting private equity player Blackstone was looking to sell its entire 23.5 per cent stake in the REIT via a block deal today. The floor price of the block deal is set at Rs 310 and the size of the transaction is estimated at $833 million, CNBC TV-18 reported quoting sources.

Embassy REIT, as per its website, owns and operates a 45.3 million square feet portfolio of nine infrastructure-like office parks and four city‑centre office buildings in Bengaluru, Mumbai, Pune, and the National Capital Region. As per the company's online portal, Embassy REIT’s portfolio comprises 35.3 msf of completed operating area and is home to 240 companies. The portfolio, as per Embassy REIT, comprises of strategic amenities, including four operational business hotels, two under‑construction hotels, and a 100 MW solar park supplying renewable energy to tenants.

For the first half of FY24, Embassy Office Parks REIT leased 3.1 msf, and the outlook for the full year looks promising, bolstered by a record leasing pipeline of 2.5 msf, the company said in October.  Embassy Office Parks REIT  signed seven new deals over 1,00,000 sf. In its Q2 earnings release, the REIT said it was a significant demand from Global Captive Centres (GCCs), which accounted for 70 per cent of total leasing activity. Bangalore and Mumbai, it said, led the demand, contributing 90 per cent of the total leasing for the September quarter. Occupancy levels stood at 90 per cent across 50 per cent of its properties with Embassy 247 in Mumbai staying fully occupied.

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For the quarter, the REIT reported revenue from Operations of Rs 889 crore, up 4 per cent. The REIT delivered distributions of Rs 524 crore or Rs 5.53 per unit, marking the 18th consecutive quarter of 100 per cent payout. The REIT achieved lowest 121 bps spread over G-Sec during the quarter and secured first-time participation from pension funds in the Rs 1,000 crore NCD issuance; Embassy REIT said it had a strong balance sheet with lowest average cost of debt in the industry at 7.4 per cent and dual AAA/Stable credit ratings.

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