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Embassy Office Parks REIT
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The Embassy REIT was settled on March 30, 2017 at Bengaluru, Karnataka, India as an irrevocable trust under the provisions of the Indian Trusts Act, 1882 pursuant to a Trust Deed dated March 30, 2017 as amended on September 11, 2018. The Embassy REIT was registered with SEBI on August 3, 2017 as a real estate investment trust under Regulation 3 (1) of the REIT Regulations having registration number IN/REIT/17-18/0001. The Embassy REIT has been settled by the Embassy Sponsor for an initial sum of Rs. 500,000. Pursuant to a letter dated August 21, 2018, SEBI took on record the addition of the Blackstone Sponsor to the sponsors of the Embassy REIT. The Embassy Sponsor and the Blackstone Sponsor are the sponsors of the Embassy REIT.
EOPMSPL has been appointed as the Manager to the Embassy REIT. EOPMSPL is held by the Embassy Sponsor and certain entities forming part of the Blackstone Sponsor Group. Axis Trustee Services Limited has been appointed as the Trustee to the Embassy REIT.
Pursuant to the Formation Transactions, (i) the Portfolio Assets are proposed to be held through the Asset SPVs; and (ii) the Portfolio Investment is reposed to be held through the Holdco, in accordance with the REIT Regulations.
The Embassy REIT is the owner of a high quality office portfolio in India that serves as essential corporate infrastructure to multinational tenants and has significant embedded growth prospects. It expects to be the first listed REIT in India upon the listing of its Units on the Stock Exchanges and believes that there is no other office portfolio of comparable scale, diversity and quality in India today. Over the last two decades, India has emerged as a leading services hub for global corporations due to its large talent pool and cost advantage for high value services. This along with the growth of domestic companies has resulted in robust demand for commercial office space and strong growth across India's major office markets.
The Embassy's Portfolio comprises seven best-in-class office parks and four prime city-center office buildings totaling 32.7 msf as of December 31, 2018, with strategic amenities, including two completed and two under-construction hotels totaling 1,096 keys, food courts, employee transportation and childcare facilities. It believes it has invested in amongst the highest quality assets in the best performing submarkets of India's key office markets of Bengaluru, Pune, Mumbai and Noida. These markets have exhibited strong market dynamics with world leading absorption (from 2013 - Q1 2018) and constrained forecast supply resulting in high rent growth and low vacancy on average.
The Embassy REIT owns one of India's largest office portfolios and believes that replicating such a platform would be difficult given land acquisition complexities and long development timelines in India. Approximately 80.9% of the Gross Rentals from its 160+ marquee tenant base is contracted with leading multinational corporations and approximately 43.4% is contracted with Fortune 500 companies such as JP Morgan, IBM and Microsoft, as of December 31, 2018. Its high quality tenant base along with long-term contracted rentals (with a WALE of 7.0 years) provides considerable stability to their Portfolio.
While its Portfolio is highly stabilized at 95.0% Committed Occupancy, It is well positioned to achieve further organic growth through a combination of contractual rent escalations, re-leasing at market rents, lease-up of vacant space and new construction within the Portfolio to accommodate tenant expansion. Portfolio revenue from operations is projected to grow by 55.8% over the Projections Period primarily due to these factors. It believes the scale and quality of its business that has given them a market leading position, makes its properties the preferred office location in each of their respective sub markets and allows them to offer consolidation and expansion options for their tenants. This has enabled them to attract, retain and grow multinational tenants in their parks leading to tenant stickiness.
Embassy Office Parks REIT came out with an Initial Public Offering (IPO) of 158,333.200 equity shares for cash at a price of Rs 300 per unit aggregating up to Rs 4750 Crores by the Company.
Embassy Office Parks REIT share price reflects investor sentiment toward the company and is impacted by various factors such as financial performance, market trends, and economic conditions. Share price is an indicator which shows the current value of the company's shares at which buyers or sellers can transact.
Market capitalization of Embassy Office Parks REIT indicates the total value of its outstanding shares. Marketcap is calculated by multiplying share price and outstanding shares of the company. It is a helpful metric for assessing the company's size and market Valuation. It also helps investors understand how Embassy Office Parks REIT is valued compared to its competitors.
Embassy Office Parks REIT PE ratio helps investors understand what is the market value of each stock compared to Embassy Office Parks REIT's earnings. A PE ratio higher than the average industry PE could indicate an overvaluation of the stock, whereas a lower PE compared to the average industry PE could indicate an undervaluation.
The PEG ratio of Embassy Office Parks REIT evaluates its PE ratio in relation to its growth rate. A PEG ratio of 1 indicates a fair value, a PEG ratio of less than 1 indicates undervaluation, and a PEG ratio of more than 1 indicates overvaluation.
Return on Equity (ROE) measures how effectively Embassy Office Parks REIT generates profit from shareholders' equity. A higher ROE of more than 20% indicates better financial performance in terms of profitability.
Return on Capital Employed (ROCE) evaluates the profitability of Embassy Office Parks REIT in relation to its capital employed. In simple terms, ROCE provides insight to investors as to how well the company is utilizing the capital deployed. A high ROCE of more than 20% shows that the business is making profitable use of its capital.
Total debt of Embassy Office Parks REIT shows how much the company owes to either banks or individual creditors. In simple terms, this is the amount the company has to repay. Total debt can be a very useful metric to show the financial health of the company. Total debt more than equity is considered to be a bad sign.
The Debt-to-Equity (DE) ratio of Embassy Office Parks REIT compares its total debt to shareholders' equity. A higher Debt to Equity ratio could indicate higher financial risk, while a lower ratio suggests that the company is managing its debt efficiently.
CAGR shows the consistent growth rate of Embassy Office Parks REIT over a specific period, whether it is over a month, a year, or 10 years. It is a key metric to evaluate the company’s long-term growth potential. Main metrics for which CAGR is calculated are net sales, net profit, operating profit, and stock returns.
Technical analysis of Embassy Office Parks REIT helps investors get an insight into when they can enter or exit the stock. Key components of Embassy Office Parks REIT Technical Analysis include:
There are usually multiple support levels, but the main support levels for a stock are S1, S2, S3. Support levels indicate price points where stock might get support from buyers, helping the stock stop falling and rise.
There are usually multiple resistance levels, but the main resistance levels for a stock are R1, R2, R3. Resistance levels represent price points where Embassy Office Parks REIT shares often struggle to rise above due to selling pressure.
Dividends refer to the portion of the company’s profits distributed to its shareholders. Dividends are typically paid out in cash and reflect Embassy Office Parks REIT’s financial health and profitability.
Bonus shares are usually given by companies to make the stock more affordable, increase liquidity, boost investor confidence, and more.
Stock split increases the number of its outstanding shares by dividing each existing share into multiple shares. When the company offers a stock split, the face value of the stock reduces in the same proportion as the split ratio.
The financials of Embassy Office Parks REIT provide a complete view to investors about its net sales, net profit, operating profits, expenses, and overall financial health. Investors can analyze financial data to assess the company’s stability and also understand how the company has been growing financially.
The profit and loss statement of Embassy Office Parks REIT highlights its net sales, net profit, total expenditure, and operating profits in the current financial year. This Profit and Loss statement is crucial for evaluating the profitability and financial stability of Embassy Office Parks REIT.
The balance sheet presents a snapshot of Embassy Office Parks REIT’s assets, liabilities, and equity of shareholders, providing insights into the financials of the company.
Cashflow statements track the company's cash inflows and outflows over a period. It is an essential tool for understanding how well the company manages its liquidity and finances.