In Q2 FY2024, Embassy Office Parks REIT reported leasing 2 million square feet (msf) of office space through 25 deals, resulting in operational revenue of Rs 889 crore, marking a 4% increase, according to an October 26 regulatory filing.
This leasing activity included 1.2 msf of new leases, including seven new deals exceeding 1 lakh square feet, reflecting a resurgence in large deal closures.
The demand for office space was primarily led by Bengaluru and Mumbai, which collectively contributed to 90% of the total leasing in the quarter. Approximately 50% of Embassy’s properties, including Embassy 247 in Mumbai, were fully occupied. Global Captive Centres (GCCs) accounted for over 70% of the total leasing activity.
During Q2, the company also completed the construction of a 1 msf new office tower in Bengaluru. Embassy REIT anticipates achieving approximately a 20% return on cost spending for this development.
The hospitality segment remained strong during the same quarter, with a 52% occupancy rate and a 24% year-on-year growth in Average Daily Rate (ADR). The EBITDA stood at Rs 37 crore.
Aravind Maiya, Chief Executive Officer of Embassy REIT, stated, “For the first half of FY2024, we have leased 3.1 msf, and the outlook for the full year appears promising, with a leasing pipeline of 2.5 msf. We are also delighted to further strengthen our long-standing partnership with one of our largest clients at Embassy GolfLinks. This, combined with the robust leasing momentum in the business, has resulted in a revised leasing guidance of 6.5 msf for FY2024, up from the previously announced 6 msf.”