Embassy REIT Announces INR 3348 Million Acquisition of Embassy Business Hub in North Bangalore

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Embassy REIT Acquires Embassy Business Hub in Bangalore

Embassy Business Hub, a Bangalore office building of 1.4 million square feet, will be acquired by Embassy Office Parks REIT for Rs 3,348 million (USD 41 million).

Embassy REIT intends to finance the transaction largely with debt at an annual interest rate of 8.1%, for which it has acquired binding pledges from prominent financial institutions.

Embassy REIT is purchasing Embassy Sponsor's affiliates' share of 1.4 msf of total leasable area, of which 0.4 msf is approaching completion and 93% pre-committed to Philips, a worldwide electronics giant and Fortune Global 500 company, and the remaining 1 msf is in the earliest phases of construction.

"This tuck-in purchase is fairly priced, embeds more growth in the REIT portfolio, and provides long-term value for our unitholders."

Embassy REIT complied with severe related party controls, such as obtaining the permission of independent directors of the Board of the REIT Management and a fairness opinion from Axis Capital to the Board of the REIT Manager. Moreover, REIT Management will not get any acquisition-related fees. The transaction is anticipated to close no later than April 30, 2023, pending the satisfaction of usual conditions precedent.

Embassy REIT received financial and tax due diligence assistance from Ernst & Young LLP, and legal counsel from S&R Associates.

Axis Capital presented the independent directors of the Management of Embassy REIT with a fairness assessment for the proposed purchase and advised that, subject to relevant assumptions and limits, the acquisition value is financially fair to the public unitholders of Embassy REIT.