Embassy Office Parks Reit is embroiled in a complex legal dispute with Sterling Wilson Renewable Energy Limited (SWREL) and Sterling Wilson Private Limited (SWPL), collectively referred to as Sterling Wilson. The conflict centers around alleged non-payment claims of ₹100.00 crore by Embassy-Energy Private Limited (EEPL), a special purpose vehicle of Embassy REIT.

Legal Proceedings and Dismissals

Embassy REIT maintains that the claims made by Sterling Wilson are "entirely frivolous and false." The dispute, which originated in 2018 before Embassy REIT's initial public offering (IPO), has seen multiple legal proceedings:

• The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) have dismissed Sterling Wilson's claims.
• Both tribunals ruled that no contractual relationship existed between the parties and that no payment was owed by EEPL to Sterling Wilson.

Project Background and Payment History

The dispute stems from a 2017 solar plant project in Karnataka, where:

• EEPL engaged IL&FS Solar Power Limited (ISPL) as the main contractor.
• ISPL subcontracted to IL&FS Energy Development Company Limited (IEDCL).
• IEDCL further engaged Sterling Wilson Private Limited.

Embassy REIT states that EEPL has fully discharged its payment obligations:

• Approximately ₹777.94 crore was paid to ISPL between December 2019 and December 2020.
• ISPL issued a no-dues certificate to EEPL in December 2020, confirming that no further payments were owed.

Ongoing Legal Actions

Despite the dismissals and payments, Sterling Wilson continues to pursue legal action across multiple forums:

1. Civil Proceedings: A summary suit filed by SWREL in the Commercial Court, Bengaluru, seeking payment of approximately ₹188.89 crore with interest.

2. Criminal Action: SWREL has initiated criminal proceedings against Jitendra Virwani and Karan Virwani, despite their lack of current involvement with EEPL.

3. Regulatory Complaints: Sterling Wilson has approached the Securities and Exchange Board of India (SEBI) with allegations of non-compliance and non-disclosure against Embassy REIT.

Embassy REIT's Stance

Embassy REIT remains firm in its position:

• EEPL has no contractual obligation to Sterling Wilson.
• The contract with ISPL has been completed, and all obligations have been discharged.
• The REIT views Sterling Wilson's actions as "a pattern of vexatious litigation" and "forum shopping."

Implications for Unitholders

Embassy REIT has assured its unitholders that it will continue to contest the proceedings initiated by Sterling Wilson. The REIT's management, including its Chairman, has committed to protecting unitholder interests and not acceding to what they term as "unjust demands" from Sterling Wilson.

As this legal battle unfolds, Embassy REIT investors will be closely watching for any potential impacts on the trust's financial position and operational stability. The REIT's management remains confident in its legal standing and has pledged to keep unitholders informed of any significant developments in this ongoing dispute.

Embassy Office Parks Reit , India's first publicly listed Real Estate Investment Trust, has reported strong financial results for the first quarter of fiscal year 2026, demonstrating resilience and growth in the commercial real estate sector.

Financial Highlights

The REIT posted impressive year-on-year growth in its key financial metrics:

The robust performance was primarily driven by new leasing, rental escalations, recent asset deliveries, and contributions from the fully integrated Embassy Splendid TechZone asset.

Record-Breaking Leasing Activity

Embassy REIT achieved its highest ever Q1 leasing of 2.0 million square feet across 25 deals, marking a 9% year-on-year increase. The leasing activity included:

• ~1 million sq ft of new leases at a re-leasing spread of 38%
• ~0.4 million sq ft of renewals
• ~0.7 million sq ft of pre-commitments

Global Capability Centers (GCCs), technology, and healthcare companies accounted for the majority of leases, reinforcing the REIT's strong tenant profile.

Occupancy and Asset Performance

The REIT's portfolio occupancy stood at 88% by area and 91% by value, both up by 300 basis points year-on-year. Notably:

• All Bangalore assets are now over 90% leased
• 10 out of 14 properties are above 90% occupancy, including 6 at 100%
• GCCs continue to drive demand, accounting for 64% of portfolio rentals across ~100 tenants

Strategic Capital Management

During the quarter, Embassy REIT raised ₹4,225.00 crores of debt at a blended coupon of 7.18%, which was largely used to refinance higher-cost debt. This includes an NCD issuance of ₹750.00 crores at a coupon of 6.97%, the lowest coupon achieved by the REIT in the last four years.

The REIT's net debt stands at ₹20,183.00 crores as of June 30, 2025, implying a leverage ratio of 33%, with an average in-place coupon of 7.59%.

Future Outlook

Embassy REIT maintains its FY2026 guidance:

• NOI expected to be in the range of ₹3,589.00 to ₹3,811.00 crores
• Distribution per Unit (DPU) projected between ₹24.50 to ₹26.00 per unit

These projections imply a 13% growth in NOI and a 10% growth in DPU on a year-on-year basis at the mid-point.

Leadership Transition

The Board has approved the appointment of Amit Shetty as the new Chief Executive Officer of Embassy REIT, effective August 1, 2025. Shetty, currently serving as the Chief Operating Officer, will succeed Ritwik Bhattacharjee, who will transition to the role of Senior Adviser.

Market Outlook

Despite global economic uncertainties, Embassy REIT remains optimistic about the Indian commercial real estate market. The company reports strong leasing momentum, particularly in Chennai and Bangalore, with an active pipeline of about 1.5 million sq ft and participation in approximately 90% of the 12 million sq ft of active RFPs in the market.

Embassy Office Parks REIT's strong Q1 FY2026 performance, coupled with its strategic initiatives and positive market outlook, positions the company well for continued growth in the Indian commercial real estate sector.