CHENNAI: India’s first listed real estate investment trust (REIT) Embassy REIT, a subsidiary of Bengaluru-based real estate developer Embassy Group, plans to increase its office leasing portfolio in Chennai to 3.6 million sq. ft. from 1.4 million sq ft at its Embassy Splendid Techzone located on Pallavaram-Thoraipakkam Road in the city, with a total of Rs 1,700 crore as demand from expanding global capability centres (GCCs) and ITs continues to gather pace in the country.
The Pallavaram-Thoraipakkam Road is bustling with GCC and IT companies. Embassy REIT acquired the 30-acre campus for Rs 1,200 crore in 2024 from a sponsor with office space of 1.4 million sq ft and started construction another 1.6 million sq. ft. The company launched the construction of another 2 million sq. ft. on January 9.
Amit Shetty, CEO, Embassy REIT, said; “Considering the leasing velocity in the last six months of nearly 6,00,000 sq ft, we are launching another 2 million sq. ft. in Chennai across two blocks of Embassy Splendid Techzone. We are building about 7.2 million sq. ft. across India, out of which 3.6 million sq ft as 50% of its office leasing portfolio will be in Chennai.” The overall spending in office-leasing business of the company is Rs 3,700 crore across 7.2 million sq. ft.
Embassy REIT currently owns a total of 50 million sq. ft. across office space in five cities, four hotels with 1100 keys, and also building two more hotels adding another 500 keys. It also operates 100 MW solar park in the north Karnataka. In Chennai, the company operates 1.4 million sq ft office space, and aiming to take it to 5 million sq. ft. in the next four to five years which will be 10% of its overall portfolio.
The company is expecting an operating income of Rs 3,700 crore from across the country in the current financial year, out of which 3% likely to come from Chennai business alone.
Welcoming the move of the government over reclassification of REITs, allowing insurance companies to invest in REITs and larger participation of financial institutions in REITs, Shetty said; “From the Budget perspective, the industry will be closely looking into the outlay in infrastructure.”
In Chennai, the company is seeing three large occupier trends which include GCCs, R&D centres for manufacturing sector and data centres because of city’s access to undersea cable links. Currently, its clients base includes GCC company Optum Global Solutions, a subsidiary of UnitedHealth Group, EY, US-based workforce solutions company Dexian, Bank of New York Mellon, Wells Fargo Bank, Accenture, and cloud-native technology Tekion in Chennai.
Shetty also said that company is also setting up solar panels on rooftop to increase its dependence on non-renewable energy, adding that in Bengaluru parks the company has installed 18MW solar panels.