Embassy REIT has said that large corporate clients have started soliciting request for proposals (RFPs) for 2023-24 and the company has expedited construction to meet future office space demand.
“This is the opportunity to build the product and keep it ready. We are constructing 57 lakh sq ft in Pune, Bengaluru and Noida with the investment of over Rs 2,000 crore and half of it was started in the middle of lockdown. We expedited the construction sensing opportunity in long term,” Vikaash Khdloya, Deputy Chief Executive Officer and Chief Operating Officer of Embassy REIT told ET.
The company is also looking for acquisition of large scale brownfield office parks in Noida, Gurgaon, Hyderabad and Chennai.
In the third quarter ended December 31, 2020
, Embassy REIT net operating income was Rs 4,780 million and it distributed Rs 4,313 million or ₹4.55 per unit to unitholders.
“Large occupiers have realised there is no supply and they want quality space. Let’s think beyond 2021-22, as they think everything will get stabilised by 2023. They are thinking there will be no space in 2023 and business is growing. Last one year they haven’t taken space but the business is growing more than the normal pace,” Khdloya added.
Embassy REIT, listed in April 2019 has a portfolio of eight infrastructure-like office parks and four city‐centre office buildings in Bengaluru, Mumbai, Pune, and the National Capital Region.
“In the immediate term, the occupiers are looking for more space for de-densification. Also, as the US gets vaccinated, the sentiments will turn positive. It’s a matter of two-three quarters and India will also vaccinate 30-35% of the population by then. With that the scenario will change,” he said.
Embassy REIT that has a customer base of large technology product companies, global captives and IT services firms, said that these companies are hiring and office rent is not a major source of cost for them.
“Just like we saw during global financial crisis, there will be V shaped kind of a space take up. Occupiers wishlist has changed a lot and they now ask what are we doing for sustainability and reduce carbon footprint. A lot of focus is on wellness and that is where Grade A builders are at advantage,” said Khdloya.
The company is also on a lookout for completed, stabilised and leased out projects with some scope of future development.
“We believe in going big when we see the opportunity,” said Khdloya.
He said that Noida has been witnessing greater demand than Gurgaon because of infrastructure, metro network and improved law and order situation.
