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New Delhi: Embassy Office Park REIT ,Embassy REIT) has agreed to acquire Embassy Business Hub, Bangalorefor approximately 1.4 million sq ft of leaseable area with exclusive ownership rights for a total enterprise value of Rs 3,348 million ($41 million), the company said in a BSE filing.
Embassy REIT plans to finance the acquisition primarily through debt at an interest cost of 8.1% per annum, for which it has secured binding commitments. ICICI Bank And Bajaj Housing Financethe company said in a regulatory filing.
Embassy Business Hub is an integrated business park in North Bengaluru and upon completion is expected to comprise a total leasable area of approximately 2.1 million sq ft, of which Philips India will lease approximately 0.62 million sq ft as a tenant. Committed to taking The almost-completed building which is expected to comprise approximately 0.66 million sq ft of leasable area upon completion.
Embassy REIT will acquire the entire paid-up share capital of ECPL from the sellers, namely JV Holding (JVHPL, affiliated with Embassy Property Developments) and another shareholder of Embassy Group.
Embassy REIT will acquire the sellers’ right, title and interest in Embassy Construction (ECPL), the developer of Embassy Business Hub, Bengaluru, which includes ECPL’s exclusive ownership rights of over 1.4 million sq ft of leaseable area of approx. The 2.1 million square feet mentioned above, including the right to provide common area maintenance services and common infrastructure services.
Expected net operating income (NOI) yield at 8.25%, proforma NOI growth of 104 bps and proforma net asset value (NAV) accretion of 2 bps.
The company also secured the right of first offer for the future phases of Embassy Business Hub totaling 46 acres of land.
The acquisition is expected to be completed on or before April 30, 2023, subject to the fulfillment of customary conditions precedent.
Ernst & Young LLP provided financial and tax due diligence services and S&R Associates served as legal advisor to Embassy REIT. Axis Capital Limited provided the fairness opinion to the independent directors of the manager of Embassy REIT for the proposed acquisition.
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