Embassy Office Parks REIT on Tuesday announced that it has raised Rs 3,680 crore, or $501 million, by way of an institutional placement of units. The proceeds will be utilised to fund its current proposed acquisition of an IT park in Bangalore.
“Securities committee of the board of directors of Embassy Office Parks Management Services, manager of Embassy REIT, at its meeting held on December 22, 2020, approved the issue and allotment of 111,335,400 units of Embassy REIT to 129 successful eligible institutional investors, at the issue price of Rs 331 per unit, which includes a discount of Rs 17.38 per unit (i.e., 4.99%) on the floor price of Rs 348.38 per unit,” the business mentioned in a regulatory filing.
The challenge opened on December 15 and closed on December 21. Under allotment of units in the challenge, an aggregate of 883,000,743 units are issued and outstanding promptly immediately after the Issue, it added.
Trading of these units is anticipated to commence on or about December 24, 2020, on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), Embassy REIT mentioned in a statement. Morgan Stanley India, Kotak Mahindra Capital, BofA Securities India, JP Morgan India, Axis Capital, HSBC Securities and Capital Markets (India) and IIFL Securities served as Joint book-operating lead managers for the supplying.
“Subject to applicable regulations, Embassy REIT proposes to use proceeds from this placement to fund its proposed acquisition of Embassy Tech Village (ETV) that it announced earlier on November 17, 2020, and for general purposes,” the business mentioned.
“We appreciate the overwhelming support we received from our existing investors as well as many new domestic and global institutional investors in our first-ever institutional placement. The strong demand for our offering amidst market uncertainties and the ongoing pandemic is a testament to the confidence in Embassy REIT’s inorganic growth strategy of owning quality office assets such as Embassy TechVillage. This institutional placement of new units diversifies our unitholder register, enhances the liquidity of our units, and is expected to facilitate the REIT’s potential inclusion into additional global benchmark equity indices,” mentioned Mike Holland, CEO of Embassy REIT.
The transaction is anticipated to close by finish of December 2020.
Embassy REIT is acquiring ETV from the Embassy Sponsor, members of Blackstone group and other promoting shareholders, for a total enterprise valuation of Rs 9,782 crore, or about $1.3 billion.
The acquisition of ETV assets contains about 6.1 million sq ft (MSF) of the completed region and 3.1 MSF of region beneath-building, of which 36% is pre-leased to JP Morgan and two proposed 518-keys Hilton hotels inside the general campus. Embassy REIT is working out its proper beneath the ROFO (proper of very first present) agreement to obtain the asset.
ETV spans more than 84 acres and derives 88% of its rents from multinational occupiers. It is 97.3% occupied and has a 9.7 year weighted typical lease expiry (WALE) with a 33.7% mark-to-industry (MTM) prospective.
Listed in April 2019, Embassy REIT is India’s very first publicly listed true estate investment trust and is sponsored by Blackstone and Embassy group.