InvestorQ : How were the numbers reported by the Embassy Office Parks REIT for the Sep-20 quarter?
Archita Jajjoo made post

How were the numbers reported by the Embassy Office Parks REIT for the Sep-20 quarter?

Niti Shenoi answered.
6 months ago

Embassy Office Parks REIT reported flat net profit at Rs.232.56 crore for the Sep-20 quarter. It also reported a 4% rise in revenue from operation at Rs.540 crore and is looking for opportunities to acquire large office parks for inorganic growth of the business. It reported net profit also at a very flat level. It is predominantly Bengaluru based.

Its net operating income was up 10% at Rs.481 crore in the second quarter. However, there was an 8% drop in the distribution of income to unit holders at just Rs.424 crore during the second quarter compared to Rs.463 crore in the last Sep quarter.

Embassy Office Parks Management Services is the manager to Embassy REIT. AT the board meet, it announced the declaration of Rs.5.50 per unit translating into a total payout of Rs.424 crore to unit holders. The company has fixed November 10 as the record date for distribution and the payment date as November 17.

In terms of business outlook, the CEO of Embassy REIT averred that the REIT continued to deliver amid an extremely challenging business environment due to the impact of the global pandemic. Embassy has also been very successful in collecting rents on time and keeping expenses low so as to maintain a healthy balance sheet.

Normally, REIT yields distributions are benchmarked with what alternate investment spay out. Currently, Embassy is distributing cash flows to unit holders that is comparable with the pay-outs of top yield-paying Indian corporates. Most of the occupants are MNCs with strong balance sheets and deep pockets so the business model is rather safe.

For Embassy, the occupancy level in its commercial portfolio stood at 91.7% and rental collections at 99.5% during the quarter, which can be classified as extremely competitive.

It may be recollected that Embassy REITS was listed on the bourses in April 2019 with an ownership and operation of 33.3 million SFT portfolio across Bengaluru, Mumbai, Pune and NCR. Out of this 26.2 million SFT is completed operating area with the remaining in the works.