Asia's Largest Office REIT Secures Historic ₹2,000 Crore Debt Financing Through Maiden NCD Issuance

Embassy Office Parks REIT, recognized as India's first listed real estate investment trust and Asia's largest office REIT by area, has announced the successful completion of a ₹2,000 crore refinancing initiative through a landmark 10-year non-convertible debenture (NCD) issuance from its Bengaluru headquarters.

First-of-its-Kind REIT Debt Instrument in India

The company reported that this NCD issuance represents the inaugural debt instrument of its nature launched by an Indian REIT, signaling a major milestone in the evolution of India's REIT debt market landscape.

Strategic Coupon Structure Offers Competitive Returns

According to the announcement, the NCDs issued under Embassy REIT Series XV feature a sophisticated step-up coupon mechanism delivering an effective yield of 7.33%. The debenture structure provides investors with 7.25% returns during the initial five-year period, escalating to 7.45% for the subsequent five years, while incorporating a put option at the conclusion of the fifth year.

Substantial Interest Savings Expected from Refinancing Strategy

The REIT disclosed that proceeds from this issuance will be utilized for refinancing existing debt obligations, with projections indicating annual interest savings of approximately 70 basis points. This strategic debt restructuring is expected to enhance the trust's financial efficiency significantly.

Strong Institutional Demand Drives Oversubscription

The issuance attracted robust participation from more than 15 institutional investors, encompassing life insurance companies, pension funds, and mutual funds, resulting in oversubscription by 1.4 times. Market observers noted that the extended tenure structure particularly appealed to investors seeking long-term capital deployment opportunities that align with their liability profiles.

Leadership Emphasizes Prudent Debt Management

Ritwik Bhattacharjee, CEO of Embassy REIT, stated that this transaction strategically staggers the trust's liability profile while enabling prudent management of future debt maturities. The leadership emphasized that this approach positions the REIT for sustainable growth while maintaining financial flexibility.

Market Context and Industry Impact

This development occurs as India's REIT sector continues expanding, with Embassy's successful NCD issuance potentially setting precedent for similar debt instruments in the market. The transaction demonstrates growing institutional confidence in Indian commercial real estate investment trusts and their ability to access diverse funding sources.