With this refinance, Embassy REIT achieves interest savings through a positive refinancing spread of around 60 basis points. The long tenor loan helps extend its debt maturity profile. Embassy REIT's CEO, Vikaash Khdloya, said that the company was well-positioned to finance its growth, given its access to an expanding capital pool that includes banks, mutual funds, insurers, FPIs, and now NBFCs.
The loan will also help Embassy REIT achieve a fixed-rate debt book for an average of 18 months. Khdloya added that the company's active capital management strategy will benefit its unitholders. Embassy REIT's entire debt book being at fixed rates demonstrates this strategy.
Bajaj Housing Finance Limited's Managing Director, Atul Jain, said that the organization is delighted to partner with Embassy REIT. He hopes to continue the mutually beneficial partnership and strengthen the relationship further.
Embassy REIT owns and operates a 43.6 million square feet portfolio comprising eight infrastructure-like office parks and four city-centre office buildings in Bengaluru, Mumbai, Pune, and the National Capital Region (NCR). The portfolio comprises 34.3 million square feet completed operating area. Embassy REIT's stock ended flat at Rs 309.45 on the National Stock Exchange.
On January 25, 2023, the Board of Directors of Embassy Office Parks Management Services Private Limited, the manager to the Embassy Office Parks REIT, approved availing a term loan of Rs 1,000 crore for refinancing of debt availed by SPVs of the REIT and general corporate purposes.
Embassy REIT is listed on the National Stock Exchange of India and the Bombay Stock Exchange. The REIT is jointly sponsored by Blackstone and Embassy Group. Blackstone is one of the world's leading investment firms, while the Embassy Group is one of India's leading real estate developers.
Embassy REIT was listed on the stock exchanges in April 2019. The listing was India's first listing of a REIT. The REIT has delivered total unitholder returns of 63.8% since its listing. Embassy REIT's market capitalization was Rs 42,191.28 crore as of February 17, 2023.
Embassy REIT's assets are focused on high-quality office assets. The REIT has a diverse tenant base that includes multinational companies and domestic corporate occupiers. The company's strategy is to focus on building long-term tenant relationships that create value for all stakeholders.
The loan obtained by Embassy REIT from Bajaj Housing Finance Limited will allow the REIT to refinance its existing debt and extend its debt maturity profile. This will reduce its overall interest expenses and create more predictable cash flows.
The long tenor loan will also reduce the refinancing risk of Embassy REIT. This is particularly important given the current interest rate environment in India. Interest rates have been rising in India, and this has increased the cost of borrowing for companies that have floating rate debt.
The loan from Bajaj Housing Finance Limited will also help Embassy REIT achieve a more diversified funding mix. The REIT has access to capital from banks, mutual funds, insurers, and FPIs. With the addition of NBFCs, Embassy REIT's capital pool will be more diversified, and this will help reduce its funding costs.
