Knowledge Realty Trust FY26 results: revenue up 16%

Knowledge Realty Trust (NSE: KRT / BSE: 544481) reported its quarterly and year ended March 31, 2026 results on May 13, positioning FY26 as a year of strong leasing and rental resets for India’s largest and most geographically diverse office REIT. Management highlighted that leasing momentum remained led by Global Capability Centres (GCCs) and “front office” occupiers, while exposure to traditional IT services remained limited. The REIT also reiterated that balance sheet leverage remains low, giving headroom for acquisitions.

The update is being watched because the listed office REIT space is increasingly being judged on occupancy quality, embedded rent growth, and the ability to compound distributions through development completions and disciplined acquisitions.

FY26 at a glance: leasing, rents, and occupancy

In Q4 FY26, the REIT achieved gross leasing of 1.1 million sq ft, taking FY26 cumulative leasing to 3.5 million sq ft. Portfolio occupancy was reported at 92%, with management pointing to demand strength in key markets and a pipeline of deals.

KRT said in-place rents grew 7% year-on-year in FY26 and it delivered leasing spreads of 26% for the year. It also stated that rents achieved on new leasing in FY26 were at a 5% premium to market rents, which management linked to asset quality and pricing power.

Tenant behaviour also mattered in FY26. Expansions by existing tenants contributed 56% of new leasing, and the REIT said it achieved annual escalations in over 87% of FY26 leasing.

“AI resilient” portfolio positioning and tenant mix

KRT framed its portfolio as “AI resilient” on three attributes: 45% of gross rentals from GCC occupiers, negligible exposure to the traditional IT services sector, and 31% of portfolio value in front office assets. Separately, management commentary in the broader material also said around 4% of properties are occupied by traditional IT services firms.

The strategy signals a focus on occupiers viewed as more anchored to high-skill work and business-critical functions, rather than commodity back-office demand. For investors, the practical implication is whether this mix supports steadier occupancy and stronger rent resets through cycles.

Financial performance: revenue up 16%, NOI at ₹4,048.4 crore

Management said FY26 leasing momentum resulted in revenue growth of 16% year-on-year. Net Operating Income (NOI) grew 18% year-on-year to ₹4,048.4 crore (₹40,484 million). The REIT described NOI margins as “industry-leading”, though it did not provide the margin number in the supplied release excerpt.

KRT’s commentary also referenced earlier quarterly performance points included in the broader material, including Q3 FY26 revenue of ₹1,178.7 crore (₹11,787 million) and a maiden DPU of ₹1.57. Another disclosure in the same compilation referenced Q3 FY26 NOI of ₹1,040.7 crore, and a FY27 DPU guidance of ₹7.03.

Central Mumbai and sub-market demand signals

KRT said front office demand lifted its Central Mumbai portfolio occupancy by 10% year-on-year, while rentals achieved for leasing during the year rose 27% year-on-year. Management also noted high demand in Bengaluru’s Outer Ring Road stretch and said it expects a recovery in Q4 as some deal closures shifted in timing.

These points matter because city-centre assets and select Bengaluru corridors tend to be the first to show pricing power when demand tightens.

Development pipeline: Bengaluru construction ramps up

On growth projects, the REIT said it commenced construction of a new 1.4 million sq ft block at Sattva Global City in Bengaluru, over and above an existing under-construction portfolio of 1.2 million sq ft. Management also described the 1.2 million sq ft pipeline as expected to be commissioned early FY27.

Alongside development, KRT highlighted a 6.7 million sq ft Right of First Offer (ROFO) pipeline expected over the next 2-3 years, providing a visible runway for sponsor-led inorganic additions if valuation and structure are suitable.

Inorganic growth: “NAV and DPU accretive” guardrails

KRT said it is evaluating acquisitions with strict “NAV and DPU accretive” guardrails. It also indicated that, while some peers are exploring data centres, it remains focused on its core institutional office mandate and has no current plans for data centres.

Management’s acquisition commentary in the provided text emphasised discipline and timing, noting that opportunities take time to set up and execute at “reasonable levels.”

Balance sheet: low LTV supports optionality

The REIT reported a Loan-to-Value (LTV) of 18%, calling it low and highlighting “significant headroom for inorganic growth and acquisitions.” Other sections of the compiled material referenced an LTV around 19% post listing, but the results table explicitly stated 18%.

Low leverage can be a competitive advantage for office REITs when acquisition windows open, but outcomes still depend on the price paid and the incremental distribution impact.

Broker view: Kotak’s initiation and target price

Kotak Institutional Equities initiated coverage on KRT with an “add” rating and a target price of ₹132, calling it a key play on India’s recovering office market. Kotak’s note cited a 46.4 million sq ft portfolio spread across six cities, including 37.1 million sq ft of completed assets with 92% committed occupancy and 1.2 million sq ft under construction.

Kotak projected a 14% CAGR in NOI over FY2025–28E, driven by contractual escalations, occupancy improvement, and development buildouts. It also estimated gross asset value at ₹69,500 crore by September 2027, with 91% from office assets and the balance from solar power and maintenance services.

Key figures snapshot

Why the update matters for REIT investors

For unitholders, the FY26 update puts emphasis on three measurable drivers: leasing volumes (3.5 million sq ft), pricing (26% spreads and 7% in-place rent growth), and balance sheet capacity (18% LTV). The REIT’s disclosures also repeatedly highlighted mark-to-market headroom, ranging from 22% to 25% across different parts of the provided material, and a push toward annual escalations to improve predictability.

Separately, the macro and industry context referenced by management included India’s office absorption hitting 82 million sq ft in calendar 2025, with GCCs contributing close to 40% of demand, and India’s real GDP growth reaching 8.2% in Q2 FY26. These datapoints were used to frame office demand as structural rather than cyclical.

Conclusion

Knowledge Realty Trust’s FY26 narrative combined higher revenue and NOI growth with strong leasing execution, stable occupancy at 92%, and a visible pipeline of development and ROFO assets. The next set of milestones cited in the disclosures are the commissioning of 1.2 million sq ft of under-construction space in early FY27 and further progress on leasing and occupancy, alongside a disciplined approach to acquisitions under “NAV and DPU accretive” guardrails.