Embassy REIT leases 8.31 lakh sq ft to Target in 2025

Deal signals a major GCC expansion in Bengaluru

Embassy Office Parks REIT has leased 830,000 sq ft of office space to Target Corp. India Pvt. Ltd for its global capability centre (GCC) at Embassy Manyata Business Park in north Bengaluru. The transaction is among the largest GCC leasing deals seen in the city in recent times, based on lease registration documents accessed by Propstack, a real estate data analytics platform. The agreement stands out not only for its scale but also because it adds to Target’s existing presence inside the same business park. The documents indicate Target already occupies around 600,000 sq ft at Embassy Manyata. The fresh lease, therefore, reflects a material step-up in the company’s campus footprint.

The leased premises are located in a new building named “Gulmohar” within the business park. Target will occupy 11 floors, comprising the ground floor and 10 upper floors, as per the lease deed documents. The deal adds another large occupier commitment to a portfolio where GCC-led demand has been a key driver.

Who is leasing and where the space is located

The tenant is Target Corporation India Private Limited, the India arm of US-based retail major Target Corp. The landlord is Embassy Office Parks REIT, which owns Embassy Manyata Business Park. The site is a large Grade A office campus in north Bengaluru that has attracted multiple technology and capability centre occupiers over time.

Propstack-accessed documents show that the leased space is intended for Target’s GCC operations. GCC leasing has been a major theme in Indian office markets, and this transaction reinforces Bengaluru’s role as a large hub for such centres. The deal also highlights how companies often expand within existing campuses where they already have operating teams and established infrastructure.

Key commercial terms: rent, tenure, and escalations

The agreement is for a 10-year rental tenure. The total rental commitment is around ₹1,250 crore over the term, and it includes a security deposit of ₹52.36 crore. The lease deed documents also specify a rent escalation clause of 15% every three years.

Target took the space at a monthly rental of ₹105 per sq ft, which translates into an estimated rent outgo of about ₹8.7 crore per month. In large office leases, such structured escalations and deposits are common, but the absolute values here underline the scale of the commitment.

Start date and the building footprint in “Gulmohar”

The lease is scheduled to commence on September 1, 2025, according to the documents. Target has leased the ground floor and 10 upper floors of the building, aligning with the statement that it will occupy 11 floors in total. The building is named “Gulmohar”, and it is described as a new building within the Embassy Manyata campus.

For Embassy REIT, such large pre-commitments can support occupancy and provide visibility on rental cash flows. For Target’s India operations, the floor-by-floor allocation indicates a consolidated workspace strategy within a single tower, consistent with the needs of large GCC teams.

Deal summary table

What this says about Bengaluru’s office market and GCC demand

The scale of the lease places it among the larger office transactions linked to GCCs in Bengaluru. The broader context in the provided material also points to strong momentum in other markets. Chennai, for instance, was highlighted for robust leasing from large global companies, including one of the city’s largest deals where a full 0.65 msf block was taken for a leading US GCC.

The same context notes that GCCs accounted for about 60% of annual leasing activity, led by demand from Technology, Healthcare and BFSI sectors. While Target’s specific sector is retail, its India GCC operations typically align with the broader trend of global firms expanding capability centres to support technology, operations, analytics, and back-office functions.

Embassy REIT’s reported leasing and performance context

Separately, Embassy Office Parks REIT reported strong operational and financial performance for the quarter ended December 2025, supported by sustained leasing momentum, rising rentals, and continued demand from GCCs. The REIT leased 1.1 million sq ft across 22 deals during the quarter. For the first nine months of FY26, total leasing was reported at 4.6 million sq ft.

The leasing traction included new leases of 0.8 million sq ft, signed at re-leasing spreads of 17%, with rentals averaging 5% above prevailing market levels. These figures provide context for why large occupier transactions, particularly from GCCs, are important to listed office REITs in India.

Capital markets and balance sheet: NCD issuance details

The material also highlights capital-raising activity by the REIT. Embassy Office Parks REIT successfully completed India’s first-ever 10-year NCD issuance by a REIT, raising ₹2,000 crore from institutional investors. Another note in the same context mentions the REIT achieved a 121 bps spread over G-Sec and secured first-time participation from pension funds in a ₹1,000 crore new NCD issuance.

In addition, the REIT is described as having the lowest average cost of debt in the industry at 7.4%, along with dual AAA/Stable credit ratings. These points matter for investors because refinancing costs and debt maturity profiles can influence distributions and the ability to fund new development or acquisitions.

Analyst note and portfolio mix referenced in the material

The provided material includes an analyst view that maintained a BUY rating, with CMP at INR 366 and a target price of INR 429, indicating an upside of 17% as stated. It also mentions an estimated distribution yield of 7.3% in FY26E. Guidance referenced in the material includes 6.5 msf of total leasing, with expectations of 10% NOI growth and 7% DPU growth in FY25.

Portfolio indicators cited include 14 commercial offices, 65% of gross rents from GCCs, 5% mark-to-market upside, and an 8.5-year WALE. The material also states that Embassy REIT expects GCCs to contribute 75% to the portfolio in the next two years.

India’s listed REIT landscape

The context also lists six REITs in India: Brookfield India Real Estate Trust, Embassy Office Parks REIT, Knowledge Realty Trust, Mindspace Business Parks REIT, Nexus Select Trust and Bagmane Prime Office REIT. For investors, large leasing events in one REIT can be compared with peer commentary on occupancy, rental reversions, and sector exposure.

What to watch next

The Target lease at Embassy Manyata is notable for its size, long tenure, and structured escalations, and for signalling expansion within a campus where Target already has a substantial presence. For Embassy REIT, such deals align with the stated strength in leasing momentum and the portfolio’s exposure to GCC demand. The next key datapoints will be the on-ground commencement from September 1, 2025, and any subsequent disclosures by the REIT about occupancy and rental metrics as the “Gulmohar” building is absorbed into the leased portfolio.