Blackstone backed Embassy Office Parks to invest $400 million to ramp up portfolio

Embassy Office Parks (EOP), an equal joint venture between private equity major Blackstone Plc and Embassy Group, will spend $400 million (Rs 2,500 crore) to develop a record 12 million sqft of fresh office space across Bengaluru and Pune over the next 24 to 30 months. 

This development outlay tracks the widening demandsupply gap in both cities that are dominated by the services industry. Currently, Bengaluru and Pune enjoy the lowest office space vacancy levels of 8.3% and 7.1% respectively in the country Stock Market Trading Tips

Close to 85% of EOP's development will be focused in Bengaluru, which in the preceding sequential October to December quarter saw a record 5 million sqft of office space being absorbed as per data shared by consultancy firm CBRE. 

"Hiring is up and we are already seeing traction for office space given the crescendo in leasing activity over the last couple of months," said Mike Holland, CEO, Embassy Office Parks. At present EOP is engaging with potential clients who have plans to hire around 8,000 fresh hires added Holland. 

Last year EOP's lease portfolio grew by 44% with the joint venture firm adding 42 new clients, some of whom were setting up their operations for the first time in India. These included Lowe's, Mast Global, Rolls Royce, Souq.com, and Great West Financial among others Financial Astrology Trading Tips

EOP's 12-million sqft of development will encompass 48 capital projects, a small component of which will include construction of hotels and retail spaces. This project pipe line adds heft to EOP's stated objective of floating a real estate investment trust in the near future. 

While part of EOP's development portfolio would see corporate tenants consolidating their offices spaces, a significantly higher proportion of the development will be catering to new growth. 

For example, Flipkart's deal to lease 3-million sqft of office space in Bengaluru from EOP will see a little over 2 million sqft cater to new growth. "Our numbers have been very positive last year and we feel similarly positive for the year ahead," said Holland Nifty Trading Tips

Much of EOP's planned development in Bengaluru will center on its two big business Parks, Embassy Manyata Business Park, and Embassy TechVillage that was acquired for $300 million (Rs 1,800 crore) early last year. 

Embassy GolfLinks, among the first CBD located business parks in the city, saw its entire built office space being fully leased out on December 31, when taxi-hailing firm Ola leased 20,000 sqft of space for its technology arm Personal Numerology Trading Tips