With the covid-19 disrupting economic activity and cash flows for businesses, American private equity firm Blackstone-backed Embassy Office Parks REIT, India’s first listed real estate investment trust, on Tuesday reported that it has received commitments for 95% of rent due for the month of April.
The slight drop in rent collection could be attributed to retail and food court rentals, which have been impacted with most companies implementing work from home for their employees.
In the wake of covid-19 outbreak and ongoing lockdown restrictions, the Bengaluru-based office developer has also halted all construction activity and hotel operations to comply with government directives during the lockdown.
“Embassy REIT has received commitments for 95% rent in the month of April 2020. This is in line, if not above, the global rental collections in commercial real estate. Embassy REIT has already collected c. 90% rent as of date in May 2020,” said said Embassy REIT chief executive Michael Holland.
“Embassy REIT has distributed ₹18,821 million in its first full year since listing. This is much more than any Nifty Realty (which consists of 10 listed Indian Real estate stock) which has delivered INR 11, 909 million, as of March 31, 2020,” added Holland.
“While the covid-19 pandemic has resulted in an uncertain near-term outlook for many businesses worldwide, we are uniquely positioned to weather this pandemic-induced storm with our best-in-class office portfolio and strong balance sheet,” said Michael Holland, chief executive officer at Embassy REIT.
“While demand is likely to moderate considerably through 2020, we believe that in this environment, Grade-A supply will reduce considerably over the medium term, consolidation in the office market will continue and high-quality institutional landlords, such as Embassy REIT, will gain market share,” he added.
As of the quarter ended March 31, the board of directors at Embassy Office Parks Management Services Pvt. Ltd., which manages the Embassy REIT, announced a distribution of ₹531.7 crore or ₹6.89 per unit to investors of the REIT. This takes the total distribution for fiscal 2020 to ₹1,882.1 crore or ₹24.39 per unit.
“We are very pleased with our strong business performance in fiscal 2019-20. Since Embassy REIT listed in April 2019, we have delivered a total return of 25%. Our fourth quarter income and distribution payout once again illustrate the stability and resilience of Embassy REIT delivering cash flows that are backed by the covenants of our 160+ largely multinational occupier base,” said Holland.
This article was first published on livemint.com.