Embassy REIT Secures ₹1,550 Crore Debt at Four-Year Low
ADVERTISEMENT The strategic financial move includes ₹750 crore raised through Embassy REIT Series XIV NCDs, which were priced at a coupon rate of 6.97%. The issuance saw demand from institutional investors, particularly mutual funds, pushing the pricing 6 bps lower than the initial offered rate and underscoring strong market appetite. In addition to the NCDs, Embassy REIT secured an ₹800 crore term loan from a prominent bank, structured at a floating interest rate of 7.40% over a 15-year tenor.
Ritwik Bhattacharjee, Chief Executive Officer of Embassy REIT, expressed his satisfaction with the outcome. "The fund raise saw strong participation from both mutual funds and leading banks. The ₹750 crore NCD issuance at a 6.97% coupon marks the lowest rate we have achieved in the past four years, and it reaffirms our position as a top-tier credit in India's commercial real estate sector. This refinancing continues to support our strategy of optimally managing our balance sheet and positions us well to finance our future growth initiatives."
Embassy REIT's ability to secure debt at such a competitive rate, particularly the NCDs at a four-year low, highlights the growing confidence of institutional investors in India's commercial real estate sector, especially in Grade A office assets. Achieving a 6.97% coupon rate for NCDs, amidst fluctuating interest rates, signals the REIT's credit strength and the perceived stability of its underlying assets.
Pioneered by Embassy REIT in 2019, the Indian REIT market has matured, offering investors a regulated avenue to participate in income-generating real estate. Embassy REIT's extensive portfolio, spanning 51.1 million sq ft across 14 office parks in key markets such as Bengaluru, Mumbai, Pune, NCR, and Chennai, is a significant draw. Its completed operating area of 40.3 million sq ft houses 272 multinational corporations, providing a stable rental income stream crucial for servicing debt. The REIT's asset base and sustainability profile are further enhanced by strategic amenities like operational business hotels and a 100 MW solar park.
This refinancing aligns with a broader industry trend where well-managed REITs are actively optimizing their capital structures to enhance unitholder value. Lowering borrowing costs directly translates to improved distributable cash flow, a key metric for REIT performance. The estimated annual interest savings of approximately 113 bps from this refinancing will directly contribute to this.
ADVERTISEMENT Embassy Office Parks REIT has been very active in recent months, demonstrating strong operational and financial performance. In May 2025, the REIT had also raised ₹2,000 crore via NCDs priced at 7.21% for a three-year tenor, also aimed at refinancing existing obligations and generating interest cost savings, showcasing a consistent strategy of leveraging debt markets for balance sheet management.For Q4 FY25 and the full financial year 2025, Embassy REIT exceeded its initial leasing guidance for FY2025 by 22%, with 6.6 million sq ft leased across 98 deals. Revenue from operations and Net Operating Income (NOI) grew by 10% year-on-year to ₹4,039 crores and ₹3,283 crores respectively. Distributions to unitholders for FY2025 totaled ₹2,181 crores (₹23.01 per unit), an 8% year-on-year increase, with a projection of double-digit distribution growth for FY2026. The portfolio occupancy stood at a strong 91% by value, with Mumbai at 100%, Bengaluru at 92% and Chennai at 95%.
ADVERTISEMENT Separately, in April 2024 acquisition of Embassy Splendid TechZone, a 5 million sq ft premium business park in Chennai, expanding their footprint in a key growth market. In March 2025, Embassy REIT invested ₹100 crore to support the development of the Kadubeesanahalli Metro Station in Bengaluru, securing 30-year naming rights and enhancing connectivity for its tenants.Significant leasing deals include 2.07 lakh sq ft to global cybersecurity firm Rubrik at Embassy TechVillage in Bengaluru in January 2025, and approximately 1.4 million sq ft, including expansion options, to Commonwealth Bank of Australia at Embassy Manyata in Bengaluru in August 2024. Global Capability Centers (GCCs) continue to be a strong demand driver for their properties.
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