Embassy REIT is acquiring Embassy Business Hub for INR3,348 million (USD41 million).

The asset is a 59-acre campus-style business park, and is situated in North Bangalore, close to both the airport and Embassy REIT’s flagship property, Embassy Manyata.

Its acquisition consideration represents a discount of about 4.5% to the average of two independent valuations.

Embassy REIT is acquiring its sponsor’s affiliates’ share of 1.4 million square feet total leasable area, of which 0.4 million square feet is nearing completion and 93% is pre-committed to Philips.

The balance of 1 million square feet on the asset is in early stages of development.

“Embassy REIT’s acquisition of this high-quality, well-connected, wellness-oriented business park expands our dominant presence and office offerings in Bangalore, which undisputedly remains the most sought-after office market in India”, said Vikaash Khdloya, CEO of the REIT.

“This tuck-in acquisition is priced attractively, embeds further growth in the REIT portfolio, and creates long-term value for our unitholders”, he added.

Embassy REIT plans to primarily fund the acquisition through debt at 8.1% interest cost per annum, for which it has secured binding commitments from leading financial institutions.

Embassy REIT was last done on the BSE at INR306.80, which presently implies a distribution yield of 6.92% according to data on the India REITs table.

Related: Embassy REIT prepares for foray into new market in 2023