Embassy REIT to Acquire Property Maintenance Business of Existing REIT Properties at Embassy Manyata and Embassy TechZone, From Embassy Group

Bengaluru, Karnataka, India:  Embassy Office Parks REIT (NSE: EMBASSY / BSE: 542602) (‘Embassy REIT’), India’s first listed Real Estate Investment Trust and the largest in Asia by area, today announced that the Board of Directors of Embassy Office Parks Management Services Private Limited (‘EOPMSPL’), Manager to Embassy REIT, in its meeting held earlier today, approved the acquisition of the property maintenance business of Embassy Manyata Business Park in Bengaluru (‘Embassy Manyata’) and of Embassy TechZone in Pune (‘Embassy TechZone’) from an Embassy Group affiliate. Embassy Manyata and Embassy TechZone are part of Embassy REIT’s existing asset portfolio and the acquisition further integrates 20.3 msf of property maintenance business to the existing 9.9 msf properties already directly managed by Embassy REIT.

Michael Holland, Chief Executive Officer of Embassy REIT said, “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.”

Embassy REIT is acquiring the property maintenance businesses from Embassy Services Private Limited, an Embassy Group affiliate and expects to fund the consideration by issuing coupon bearing debt at the REIT level. This strategic acquisition is expected to be Net Operating Income (‘NOI’) accretive and Distribution per Unit (‘DPU’) accretive, and positively enhances REIT’s ability to respond with increased agility to its occupiers’ needs and address their safety concerns during the current pandemic situation. On closing, Embassy REIT will own the property management service delivery for all its fully owned properties. The transaction is subject to completion of customary conditions precedent and is expected to be completed on or before 3Q FY2020-21.

Transaction Highlights

• Acquisition cost of ₹4,740 million to be funded through coupon bearing debt at REIT level. Acquisition consideration is at 8.5% discount to average of two independent valuation reports
• Proposed transaction is expected to be 2.3% NOI accretive and 0.5% DPU accretive in its first year on a proforma basis (considering FY2019-20 actual NOI and DPU for the REIT as the basis)
• Acquisition of property maintenance businesses of two of Embassy REIT’s largest assets further enhances service delivery to occupiers, especially important given the heightened health and safety focus by occupiers
• Strong framework in place regulating related party transaction including two independent third party valuations and affiliated board members abstaining from approval vote

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