Embassy Office Parks REIT ($EMBASSY)

Good evening, everyone. A very warm welcome to you all for Embassy REIT's Fourth Quarter FY 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mrs. Sakshi Garg, Head Investor Relations from Embassy REIT. Ma'am, you may begin.

Thank you, Rutuja. First of all, we'd just like to apologize for the delay in starting the call. We were having some technical issues Welcome, everybody, to the fourth quarter and full year FY 2026 Earnings Call for Embassy REIT. Embassy REIT released its financial results for the quarter and full year ended March 31, 2026, a short while back. This included our financial results, earnings presentation and a supplemental financial and operating data book. We'll be placing it in the Investors section of our website at www.embassyofficeparks.com. As always, we would like to inform you that management may make certain comments on this call that one could deem forward-looking statements. Please be advised that the REIT's actual results may differ from these statements. Embassy REIT does not guarantee these statements or results, and it's not obliged them to update at any time. Specifically, any financial guidance and pro forma information that we will provide on this call or management estimates, based on certain assumptions and have not been subjected to any audit review or examination procedures. You're cautioned not to place undue reliance on such information and there can be no assurance that we'll be able to achieve the same. Joining me today are Amit Shetty, our CEO; and Abhishek Agrawal, our CFO. We'll start off with brief remarks on our business and financial performance and then open the floor to questions. Over to you, Amit.

Thank you, Sakshi. Good evening, and thank you all for joining us on the call today. Marking our seventh year as a listed REIT, I'm happy to report yet another stellar year of performance for Embassy REIT. Starting with the key highlights for the year. We expanded our operational portfolio to 43.5 million square feet with a record delivery of 3.3 million square feet of new office buildings as well as an acquisition of a third party of a marquee building within our core EGL asset. On this expanded base, we increased our occupancy to 94% by value, leasing a total of 6.4 million square feet at an impressive 17% higher leasing spreads. We successfully raised INR 11,200 crores of debt during this year including INR 3,400 crores of the 10-year NCD, reducing our in-place debt cost by 65 basis points year-on-year to 7.5%. We delivered double-digit growth across all our financial metrics and grew our NOI by 15%, our DPU by 10% and NAV by 16% year-on-year. And with this continued business momentum, we're delighted to once again guide to a double-digit distribution growth for FY '27. Let me now give you an annual wrap-up of our leasing performance. We leased a total of 6.4 million square feet in FY '26 across 86 deals, including 4 million square feet of new leasing, 1.5 million square feet of renewals and 0.9 million square feet of pre-leases. The total leasing included 4 million square feet of new leases signed at a 24% re-leasing spread, included a 20% mark-to-market realization and a 5% premium on market rents on average. I also want to highlight the robust pre-leasing activity in quarter 4, wherein we signed 2 large deals totaling 2.9 million square feet of our upcoming projects. This included one of the largest deals signed in Chennai market, a full 650,000 square feet block taken up for setting up a new GCC by a new entrant in India. Overall, GCC contributed to about 60% of our total leasing with demand primarily driven by technology, health care and BFSI sectors. With 7 new GCC entrants this year, we have now 102 GCCs in our occupier roster of 280 corporates. We increased our portfolio occupancy by 300 basis points to 90% by area on an expanded footprint of 43.5 million square feet. If we exclude our Q4 deliveries of 2 million square feet, which is yet to fully stabilize, our portfolio occupancy stands at 91% by area. Next, on our development portfolio, we have revised upwards the total redevelopment potential of E1 block in Embassy Manyata to 1.4 million square feet against the 0.8 million square feet announced last quarter. With this, we expected the yield on cost is about 22%. We have also identified 2 more buildings in the same park, which can undergo redevelopment post the expiry of the leases of the current tenants in the next couple of years, these buildings totaling to 0.5 million square feet and have potential to go to approximately 2 million square feet. During quarter 4, we delivered 1.4 million square feet D1/D2 block in Embassy Manyata and 650,000 square feet block 4 in Embassy Splendid Tech zone Chennai. With this, we have delivered a record total of 3.3 million square feet of new office building during FY '26. Our total office development pipeline now stands at 6.2 million square feet, of this 2.9 million square feet deliveries are scheduled over the next 2 years and 60% of that is already pre-leased. With a total capital outlay of INR 3,500 crores, we expect the total 6.2 million square feet projects to add around INR 610 crores in stabilized NOI by FY '30. On our hotel developments, we are nearing the completion of construction of our hotels at Embassy Tech Village and have received the occupancy certificate for the buildings. We are planning to launch these hotels in 2 phases: first, the Hilton Garden in July '26 and then the Hilton 5 star in March '27. During quarter 4, we also launched the construction of the 116 key sparked by Hilton Hotel in cx tech zone in Puna, which we expect to deliver by December '28. Moving on to updates on our inorganic growth. We completed the acquisition of Pinehurst, a fully leased 30,000 square feet office building aimed at consolidating our ownership in Embassy Golflinks. The transaction valued at INR 852 crores implies a forward NOI yield of 7.9%, aligning with our strategy of disciplined accretive growth. We also completed our first ever capital recycling wherein we divested 376,000 square feet of 2 owned blocks in Embassy Manyata for a total consideration of INR 530 crores. Currently, we are evaluating a pipeline of 12.6 million square feet of potential acquisition opportunities from Embassy Group as well as from third parties, we will update the market at an appropriate time as we progress further. . And finally, on the macro front, I missed the ongoing geopolitical turmoil and debates on AI disruption, the Indian office absorption numbers continue to speak for themselves, with 20 million square feet of gross absorption last quarter recorded the highest ever quarter 1 leasing demand. 45% of this demand or 9 million square feet was contributed by GCC, again recording an all-time high. Interestingly, only 50% of this GCC demand was from Fortune 500 companies, reflecting the continued emergence of the mid-market segment. If you see this overall demand in context of supply, only 8 million square feet was delivered last quarter, of which 25% of that supply was bought by Embassy REIT. This demand supply mismatch is favoring institutional office asset owners and has led to the drop in all India vacancies by 86 basis points year-on-year and a double-digit increase in rent in 3 key micro markets fueling the current office super cycle in India. With this strong macro background, we remain well placed to continue delivering growth to our investors. I'm delighted to report that in the last financial year, we've delivered a 22% total returns to our 135,000 investors. These returns included a 15% price appreciation as our unit price continued to show considerable resilience in a difficult macro environment wherein the overall declined by 5%. With the stable and consistent growth narrative, we are well placed to continue this outperformance. I will now hand it over to Abhishek to present our financial updates.

Thank you, Amit, and good evening, everyone. Let me begin with the financial highlights for FY '26 and then provide some color on FY '27. We are happy to report that we met our financial guidance for FY '26 with strong double-digit growth. Our annual revenue grew by 13% to INR 4,582 crores, and NOI by 15% to INR 3,760 crores. The increase was mainly driven by an uptick in our portfolio occupancy, new building deliveries during the current and previous year and growth in the rentals. Our solar plant returned to its full operational capacity in Q4 and generated 45 million units. This resulted in a 49% Q-on-Q growth in our Q4 solar NOI. Our hotel operations in Q4 were slightly impacted by travel slowdown led by the current geopolitical situation. Despite that, our FY '26 hotel NOI grew by 5% year-on-year with a 63% occupancy and an ADR growth of 8%. We have declared distributions of INR 616 crores in or INR 6.5 per unit for the quarter, representing a 100% payout ratio. With this, our total distributions for the year amounted to INR 25.28 per unit registering a strong 10% growth year-on-year. Moving to updates on our balance sheet. During the quarter, we raised INR 1,400 crores through our second 10-year NCD, priced at an attractive fixed coupon of 7.49% from one of the largest insurance companies in the country. With this, we successfully raised a total of INR 3,400 crores of 10-year NCDs this year, doubling the duration of our fixed rate debt book to 45 months. Our net debt book now totals INR 21,000 crores, implying a 30% leverage ratio at 7.25% in place debt cost. Through our active debt management, we have successfully reduced our in-place debt cost by 65 basis points this year and moved 60% of our debt book to fixed rates, thereby limiting our exposure to market volatilities. Next on our portfolio valuation. As per the independent value assessment of our March '26, our portfolio GAV grew by 15% year-on-year to INR 70,540 crores and our NAV by 16% year-on-year to INR 491.62 per unit. This increase was led by an increase in the market rents, a 25 basis point compression in our back rate as well as the new buildings delivered and acquired in our portfolio. Lastly, our outlook for FY '27. We expect to close the financial year with a portfolio of occupancy of 92% to 93% by area. We expect our FY '27 NOI to be in the range of INR 4,150 to INR 4,350 crores, and our DPU to be in the range of INR 27 to INR 28.6 per unit. At midpoint, this guidance implies a year-on-year NOI growth of 13% and a DPU growth of 10%, continuing our double-digit growth performance of last year. With this, let's now move to Q&A, please.

[Operator Instructions] First question is from the line of Puneet from HSBC.

Congratulations on great performance and NAV growth as well. My first question is with respect to actually NAV growth. Do you see more room for higher than organic rate of growth in NAV driven by rental growth? Or do you think broadly the numbers now capture the extent of rent to grow you've witness?

Do you have a second question, follow-up question or just this one question?

Yes. So second one is on the rental contribution side from D1, D2 and Block 4 Chennai. When should we expect rentals to start accruing? And will it be fair to assume that at least all the deposits are already factored in? And third one on Cognizant, when does that start as well?

So Punit, on the first one, if you look at the NAV growth potential that we have, largely the NAV growth that is coming in for this year is on the back of rents and all the let's say, one is the WAC compression and all the new deliveries that we have done. Now while considering the rents, what we have done is we have been a bit conservative all the while, and we have waited for the market to be stable. And for us to see 3, 4 quarters of actual delivery of those rents before taking the rents up. Now if you look at now, also, we are doing 3% to 4% higher than this market rent, whatever we have taken in the valuation and disclosed. So definitely, there is a potential going forward because one is this 3%, 4%, which is -- which we are doing higher. And the second is if the market rents actually go up by themselves. So that 4%, 5%. So this is also there.

On the second question, which is the rental contribution for D1, D2, the rentals will only begin during the later part of the year. So that's one. And the Cognizant deal is a pre-lease. So that is -- the delivery is in June of '26, sorry. And hence, there will be a rent-free period thereafter. .

And on your question on SD, yes, in the guidance, we have factored all the HD for D1, D2 and Block 4.

But have you received all the SD for D1, D2 or even that is yet to come?

Received.

You have received. And Block 4 for Chennai, which also starts June, when does the rent start for that?

Block 4, currently, we have some vacancy there, Puneet, about 400,000 square feet is vacant of the 600,000 square feet. For the 200,000 square feet, it's in various stages, some rents have started, some rents will start shortly.

Okay. So broadly fair to assume second half for '27 is.

Yes.

[Operator Instructions] The next question is from the line of Girish from Avendus Spark.

Congratulations on the strong performance for the year. A couple of questions. Firstly, on the development pipeline of -- or sorry, I mean the potential acquisition pipeline of 12.6 million square feet, how should we think from a time line point of view, when this will get converted into, let's say, the acquisitions? So that's number one. And number two, on the NOI trajectory versus the DPU trajectory, we have seen a lag in the DPU for reasons where the deliveries were coming in and there was an rent-free period. So -- and if I look at fiscal '27 also, there is a land. So when can we start seeing DPUs outpacing NOI? Can it be fiscal '28?

So Girish, on the second question, this is Abhishek. See, the main reason for the difference between the growth of NOI and DPU are two. One is a NOI that is getting generated because of deliveries and the lease-up that we do. The second reason is the increase in the interest cost because of all the deliveries that we are doing. As we continue to deliver more assets, you see under construction is as of today, 6.2 million square feet. So as we continue to do that, this gap will be there for a couple of years. Once all the deliveries are done, that is when you can -- you'll see that the gap has gone down. Yes.

On the first question, Girish, on the acquisition, while we've always been telling the market that we want to do acquisition at a pace and time when we are comfortable, there is a diligence process that we undertake, which is exhaustive. But having said that, we anticipate that this acquisition of about 10 million, 12 million square feet should be done in 4, 5 years' time frame.

Got it. So 1 can assume, let's say, on an annualized basis or a steady-state basis, something to keep coming in every year?

I'll let you speculate that, but our plan is to bring the 10 million to 12 million square feet in the next 4, 5 years. Yes.

And then on more final.

Sure.

Yes. So I mean on the leasing outlook there, I mean fiscal '26, you had 6.4 million square feet. So how should we look at fiscal '27, both, let's say, from Embassy point of view and also at the market level, what are the RFPs you're seeing right now?

Market is looking very robust, Girish. The projected absorption for FY '27 is approximately around 84 million, 85 million square feet. And the year after is also about 84 million, 85 million square feet. Again, the supply that comes into the market is in the range of 65 million, 68 million square feet for the next 2 years. So clearly, the demand is outstripping the supply. And having said that, we're seeing about 20 million square feet of RFPs in the market and 75% of those RFPs, we're seeing it in the Bangalore market as we speak. Just giving you a little color on what's happening in terms of sector-wise, last year, we saw about the first quarter -- this calendar year first quarter, we saw about 20-odd million square feet getting absorbed and the supply that came into the market was about 8 million square feet. And about 45% of leasing happened in the GCC space, right? So we continue to see the demand from GCC space, strong demand, strong RFPs, strong client engagement. So we're seeing both new entrants, mid-market entrants as well as growth from our current occupiers.

Sure. That's helpful. And on your leasing targets for the next year, how should we look at fiscal '27?

So we've guided occupancy at about 92%, 93% by area, Girish. I think that's where we will end up yes. But we do not want to put a definitive number depends on the exits, depends on pre-leasing, depends upon renewals, all of it put together. It's too early to comment on that number right now.

The next question is from the line of Abhinav Sinha from Jefferies.

Good to see the progress. A couple of questions. So firstly, on the interest rate side where we are now seeing slightly firmer rates overall. Do you -- have you build that in your guidance for next year on DPU? Or do you think we are fairly immune to it at least for another 12 months? .

Do you have some more follow-up questions so that we can make a note of all the questions that you have?

Sir, second question is actually on the Middle East conflict and the impact that you may have seen on construction cost of closures?

So Abinav, on the first question, see, yes, we appreciate that the interest now the markets have firmed up while repo has not gone up, but still the interest rates have gone up. What we have done is, if you look at our portfolio, 60% of the portfolio is at fixed interest rate, and we have increased the term also. We have around INR 4,000 crores coming up for refi. There, we have built in that the interest rate at which we will see 5 will be higher. Also, on the variable rate loans we have taken that the refi of that or whenever the repo changes, it will automatically get repriced. So in the lower range of the guidance, we have baked in all of this.

On the second question, the Middle East conflict of on ground, the construction costs have firmed up. But having said that, we always provide for some contingency on the construction cost factoring in these kind of events. Also, one thing that we've learned from the past is when the Russia-Ukraine conflict has been, prices actually took off, but then over a period of time, the prices also actually subdued. So we believe that this is a temporary phenomena. And in the long run, which should be okay.

But no impact on deal closures as such?

From a deal closure perspective, there is -- there was some travel impact because a lot of decision-making, especially some of the large deals require traveling of the clients from their parent country. So we saw some travel impact, but that's now eased out. So travel is back again. So we're seeing deal activity come back.

Okay. And just a related one here. So on hotels, can you just also highlight how the trajectory has been in March and April given the travel impact?

So hotels, if you see our occupancies that's about 63%. I would say that from a revenue perspective and also EBITDA perspective, it could have been slightly better. But having said that, we've grown our ADR and our RevPAR by about 8% each. So overall, we're happy with the hotel performance. .

The next question is from the line of Mohit Agrawal from IIFL.

I have just a couple of clarificatory questions. So firstly, when you say that the occupancy of the portfolio is going to be from 90% to 92% to 93% by area, where does this growth come from? So what are the broad assumptions as to which market or which assets you'll see incremental growth coming in from?

So Mohit, quickly to start the financial year, we have about 4.5 million square feet of vacancy in our portfolio. That's 10%, right? So that's one. We have about 0.6 million square feet of delivery as well. And obviously, there will be some potential prelease opportunity as well as renewals that will take place in the marketplace.

Okay. But is there a more -- sorry.

No, I was saying that most of the leasing will come from Manyata. There will be some in Oxygen that will -- obviously, this will be the 2 portfolios where we'll see larger activities as well as Chennai.

Okay. And do you see any revival in the day I mean, Pune market?

Yes, Pune market, If you see last year, Mohit, we did about 600,000 square feet of leasing but the sentiment has been strong, given the infrastructure constructs that have actually come up online. If you see the metro, the stations are ready and July, like we said last time as well, July, I think the metro trains must be operational. And hopefully, we're getting a walkway into Quadron. That will really increase the value proposition of Quadron as a prospect place for the corporate occupiers. That's one. The second thing is the Navi Mumbai Airport is operational right now, and Hinjawadi will be the first point of entry into the city. So that's another positive. And finally, the link road or the tunnel road on the expressway which bypasses the ghat section is also complete right now. So that will significantly cut down the travel time between the international airport to Navi Mumbai and Hinjawadi. So I think with these 3 things, we are hopeful that the leasing activity in Hinjawadi will turn around. But it will take a little bit of time. The thing is that the metro needs to get operational. I think that's when the corporate occupiers will get the comfort that they can start evaluating this market.

Understood. Also, what is the carpet efficiency currently built into -- at a portfolio level in the valuation report? And is there any room to realign that considering that the demand has been strong?

So Mohit, we've always been very opportunistic in the efficiency. I wouldn't say that there's a one fit -- one rule that fits all the portfolio. For example, the Mumbai market works on a very different efficiency while Chennai market works very differently, right? But again, wherever we have had the opportunity for a reset, we have done that. As well as the new buildings that we are doing, we are doing that at a lower efficiency. .

So Mohit, in the valuation building by building, and it is really, really very different. The range is very high.

Okay. But is there still room for...

Absolute Absolutely.

Okay. And one last question is because of the entire MAT related provisions in the budget, going forward is there going to be any change in your cash tax rate or for the future years?

So Mohit, we will continue to be under mat in most of the entities. And what will happen is because of this change for a couple of years, the impact is not significant. But after, let's say, 3, 4 years, there can be an impact because of the wave we were projecting to utilize this MAT credit. And now that if the credit goes off after 3, 4 years, that utilization will not be there, and that is when the cash tax can increase.

So for next 2 years, the cash tax rate will continue to be similar to what was there in FY '26? .

Yes.

No impact of this mat credit write-off for the next 2 years.

The next question is from the line of Pritesh Sheth from Axis Capital.

Just a couple of questions. One on the followup on the side. So firstly, we know the gap of NOI and DPU, is it all driven by the noncash component of rentals or there is a portion of interest also included? I'm sure, I mean, with 0.6 million square feet of deliveries, there might be some higher interest costs that would have -- we would have assumed. But how much is that? And any impact of the current interest rate environment we have assumed in our guidance. .

Pritesh, you have the next question also?

Second is on the leasing. While you indicated some deferrals on leasing because of Middle East, which have now recovered. But anything firming up on this AI-led disruption where you feel there are interactions which are happening where people are right now concerned about what will happen with and they don't want to take any decision as of now and prolonging that decision? Yes, those are my 2 questions.

Pritesh, on the first question, yes, what we have done is -- sorry, going back, yes, you're right, there are 2 components to why there is a drag between NOI to DPU. One is the noncash portion of NOI, and the second is the interest rate -- interest cost increasing, largely because of the deliveries that we have done in the last part of, let's say, by 25 and 3.2 million which we have done during the FY '26. This reasons for the gap in FY '26. And this will continue to be the reason for the gap in FY '27 also because whatever we have delivered during the current year, for that, there will be a full year impact in the next year also. In the guidance, we have baked this. What we have also done is bid an increase in the interest cost because of the change in interest rate because of all the refinancing that we will do will be at a higher interest rate than the outgoing entities. Also, the variable loans will be repriced whenever there is a repo increase, and hence, we have built in that also, a 25 basis point there. What I would say is that we are expecting that the interest cost will increase by somewhere around 11% to 13% in the next year and which will also contribute to this gap between the increase in NOI and increase in DPU. Does that answer your question?

Yes, yes. That's very much clarified. And on the second portion?

So on AI impact, Pritesh, honestly, we've been talking to all our occupiers. In fact, we've recently had this occupier connect, where we had about 280 of our occupiers come up. I think very clearly, what we see is that hiring continues to grow across spectrum, across boards. Also, the fact is that all of them want to harness the AI. Basically, what we understand is that AI is a very, very private, and it's not something which they will jump on the public forum and wagons. What I mean by that is for example, a bank, they will try to create their own data sets and then have an AI layer on top of it, which is private to them versus utilizing public forum available AIs. So what this means is India has the second largest pool -- talent pool on AI and the largest pool of data scientists. So given this exposure, a lot many companies are coming into the countries. Now, if I see the names that are leasing with us. Earlier, it was the Fortune 500 companies. Today, it's the Fortune 2000 companies. And there's a big deline of mid-market companies coming into the country. So we're seeing the pie actually increase as well significantly because of AI. And what I keep saying this, this is a city of 2 tails, the IT story is very different, but the GCC story is very different.

Good to hear that. And just on clarification on the interest part. Sorry, I think I forgot my question. No I'll come back in case I recollect that.

The next question is from the line of Yashas Gilganchi from BOB Capital Markets Limited.

My first question is, how do you expect leverage to trend as you fund opportunities for inorganic and organic growth in your pipeline? And what would make Embassy REIT consider funding any of these opportunities with equity capital? And my second question is I see that you are considering selling your hotel assets, but there are developments of approximately 634 underway. We shed some light on why these assets are being considered for recycling and how the new developments fit definitely within your business strategy.

So Yashas on your first question, see, what our thought process is that we don't want to go to a leverage, LTV of 35% and above. Today, we are at 30%. So we will want to maintain around 30%. And if let's say, there is an acquisition opportunity, what we will do is we will see a mix of debt and equity in such a way that the deal is accretive to the unitholders from the day 1. And for that, if we have to go close to 34%, 35%, still fine, but we want to be somewhere around 30%.

Okay. Would you ever consider issuing equity to fund any of these opportunities as you fund the good pipeline? .

Yes, definitely FS. So whenever we have some firm deals it will be a mix of debt and equity. We will have to decide that at that point of time, and we'll come to the market. But it's not that we will never do an equity raise, but we will decide based on the deal.

Yes. And just to add that, if you see our past track record as well, we've raised equity at the back of an acquisition so that it's not dilutive for our unitholders, right? So that's been our principal as well. So given the fact that we have about 10 million to 12 million square feet of deal pipeline, so we'll be very opportunistic in the sense that whatever makes sense for that particular deal, we'll either use debt, mix of debt or equity, given on the deal construct. Moving on to your second question on the hotel assets, we'd like to divest. Currently, the plan is still in the workings. The idea is that if you are able to get good valuation -- the fact is that our 6 are getting good valuation of about 18x the EBITDA. So if we get the good valuation once we'll run the RFP process and then we sense in the valuation, then we will go ahead on the divestment. The divestment is primarily aimed at reducing our debt leverage as well as funding for our new acquisition, given the fact that the office business is meaningfully more in terms of profitability, we feel that this capital can be better deployed in the office business as well as delever our existing debt as well. .

Just to take another question. How close are you to finalizing the acquisition of Embassy Zenith? When do you expect to -- the property to start generating rents for the .

So in relation to Embassy Zenith, we are actually working on the diligence. There is a little bit of work that the group also has to do in terms of the structure. So given that, once it's all fully baked in, we will come back to the market, and we'll appraise the market. Having said that, a portion of that asset is already generating rent and a portion of that will generate rent towards the end of the year.

The next question is from the line of Pritesh Sheth from Axis Capital.

Just one question. In terms of our either WAC compression that we mentioned while valuing the assets portfolio this time, how much was it? What's the WACC we are assuming? And do you think like at one side, we are assuming interest rates to go up probably next year sometime, this WACC compression and the increase in interest rate might offset and impact our NAV or we have been for now conservative in terms of that WACC assumption to incorporate that interest increase Yes, that's my only question. . [Technical Difficulty]

We are unable to hear you, sir.

Hello. Am I audible or is the management not audible because I can't hear the management?

We are unable to hear management. Please stay connected. Well let me just check.

Pritesh, sorry, I think we have got some technical glitch, which gives me some time to prepare about the answer of your question. So this WAC completion was 25 basis points that we did during the current quarter and now our WACC for completed stands at 11.5% compared to 11.75% during the September valuation. So you have a valid question that interest rate trajectory seems to be going upward and why at this time. See what happened is that the interest rates have been falling, and what the value has decided to do is not take a knee-jerk reaction and when the interest rates were falling during the first half year, they did not compress the WACC because of -- because they wanted to see that the interest rates have actually gone down. And now our interest rates are around 7.25% on an average. Even if it goes up without any repo increase because in the last meeting also, there was no increase in the repo while the market interest rates have slightly gone up. their estimation is that the WACC has actually gone down for the whole industry. And hence, they took that call of reducing it by 25 basis points, which was not a very high reduction to start with. And the increase is also not expected to be significantly very high, let's say, interest rate going up to 8%, 9%. That kind of situation is not coming in, in the near future. So that's why this call.

Thank you. Ladies and gentlemen, that was the last question for today. With that, we conclude today's conference call. On behalf of Embassy REIT, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.