Embassy REIT To Acquire Splendid TechZone For Foray Into Chennai Market

Embassy Real Estate Investment Trust, which owns and operates a 45.4 million sq ft of office infrastructure, has agreed to purchase Embassy Splendid TechZone from Embassy Sponsor for an enterprise value of Rs 1,269 crore marking its foray into the Chennai market.

To fund the acquisition plans, Embassy REIT will raise Rs 2,500 crore through Institutional Placements and reduce its existing portfolio leverage from 30% to 27%, the company said on Saturday.

The Embassy Splendid TechZone, on the Pallavaram-Thoraipakkam road in the city, comprises 5 million sq ft of integrated office park with several global companies including Wells Fargo and BNY Mellon having its presence in the facility.

With the acquisition, the total office space operated by Embassy REIT would grow to 50.5 million sq ft, positioning it as one of the largest office space Real Estate Investment Trusts globally.

In a statement today, the company said, "the Board of the Manager to Embassy REIT has approved the Embassy Splendid TechZone acquisition and an institutional placement via an enabling resolution of up to Rs 3,000 crore, subject to unit holder approvals."

Embassy Group Chairman and Managing Director, Jitendra Virwani said, "at Embassy Group, our priority is to develop world-class office assets and support the expansion of the REIT's portfolio through a pipeline of opportunities that will help it grow inorganically over the coming years".

"After the successful acquisition of Embassy TechVillage and Embassy Business Hub in Bengaluru, we are pleased to provide another premier office park in a prominent market like Chennai and contribute to the continued growth of Embassy REIT", he added.

IIFL Securities Ltd, Kotak Mahindra Capital Company Ltd and Morgan Stanley India Company Pvt Ltd serve Embassy REIT as the joint financial advisors. Ernst and Young LLP, conducted financial and tax diligence, the statement said.

Embassy REIT owns and operates 45.4 million sq ft of nine office parks in Bengaluru, Mumbai, Pune and in the National Capital Region (NCR).

"The proposed acquisition of Embassy Splendid TechZone will mark the addition of another quality asset to our existing office portfolio, which continues to benefit greatly from the demand that Global Capability Centres are demonstrating for Indian office space", Embassy REIT, Chief Executive Officer, Aravind Maiya said.

"The Embassy Splendid TechZone is a top-notch business park in a leading Chennai micro-market that will take our portfolio to over 50 million sq ft. This acquisition further diversifies our India presence, enhances our scale and ability to deliver embedded growth to all our stakeholders", he said.