Knowledge Realty Trust FY26 revenue up 16%, NOI 18%

Results snapshot and why it matters

Knowledge Realty Trust (NSE: KRT / BSE: 544481) reported its quarterly and year ended March 31, 2026 results on May 13, framing FY26 as a strong year for leasing execution and rental resets. Management said leasing momentum was led by Global Capability Centres (GCCs) and “front office” occupiers. It also highlighted limited exposure to traditional IT services, positioning the portfolio as relatively insulated from that segment’s volatility. For unitholders, the update focused on three measurable levers: leasing volumes, rental uplift, and balance sheet capacity for growth. The REIT also reiterated that leverage remained low, creating headroom for acquisitions.

Leasing momentum: 3.5 million sq ft in FY26

Operationally, KRT reported gross leasing of 1.1 million sq ft in Q4 FY26, taking FY26 cumulative leasing to 3.5 million sq ft. Portfolio occupancy stood at 92% as of the FY26 update, with management pointing to demand in key markets and a pipeline of deals. Tenant expansions played a large role in this cycle. KRT said expansions by existing tenants contributed 56% of new leasing in FY26, indicating that a significant portion of demand came from current occupiers adding space. It also said annual escalations were achieved in over 87% of FY26 leasing, which supports contractual rental growth.

Rents and spreads: premium leasing and resets

KRT reported 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. Management linked the premium to asset quality and pricing power. The company also flagged mark-to-market potential of 25%, supported by its lease expiry profile.

“AI resilient” positioning: what KRT highlighted

Management described the portfolio as “AI resilient” based on three attributes disclosed in its FY26 materials. First, 45% of gross rentals were said to come from GCC occupiers. Second, the REIT said it had negligible exposure to the traditional IT services sector. Third, it stated that 31% of portfolio value was in front office assets. In Central Mumbai, KRT said front office demand lifted portfolio occupancy by 10% year-on-year. It also said rentals achieved for leasing during the year rose 27% year-on-year in that cluster.

Financial performance: revenue up 16%, NOI at ₹40,484 million

Management attributed the year’s financial performance to leasing momentum and rental resets. FY26 revenue grew 16% year-on-year to ₹45,772 million. Net Operating Income (NOI) rose 18% year-on-year to ₹40,484 million, translating to an NOI margin of 88% as per the release. For Q4 FY26 specifically, NOI grew 14% year-on-year to ₹10,533 million.

Distributions and key per-unit metrics

KRT declared distributions of ₹7,166 million for Q4 FY26, described as ₹1.62 per unit in disclosures (also cited as ₹1.616 per unit in a board approval note). Cumulative distributions since listing in August 2025 stood at ₹21,019 million, or ₹4.74 per unit. The trust also reported a net asset value (NAV) of ₹123.61 per unit as at March 31, 2026. Separate financial disclosures also cited FY26 net consolidated profit after tax of ₹3,754.3 million.

Balance sheet: low LTV and falling cost of debt

KRT reported a Loan-to-Value (LTV) of 18% in the FY26 results table, which it described as low and providing “significant headroom” for inorganic growth. Other compiled references mentioned LTV around 19% post listing, but the results table explicitly stated 18%. The REIT raised debt of ₹42,000 million in FY26 at a blended cost of 7.3%. It also said that high-cost debt replacement, rate renegotiations, and rate cuts reduced the cost of debt from 8.6% to 7.2% during FY26. Management commentary also referenced refinancing that brought the rate down to about 7.22%.

Development pipeline and commissioning timelines

On growth projects, KRT said it commenced construction of a new 1.4 million sq ft block at Sattva Global City in Bengaluru. This was in addition to an existing under-construction portfolio of 1.2 million sq ft. The next milestone cited was the commissioning of the 1.2 million sq ft of under-construction space in early FY27. Alongside development, management reiterated a disciplined approach to acquisitions under “NAV and DPU accretive” guardrails, and separately mentioned it expects some acquisitions in FY27.

External lens: Kotak’s initiation note

Kotak Institutional Equities initiated coverage on KRT with an “add” rating and a target price of ₹132. Kotak’s note cited a 46.4 million sq ft portfolio across six cities, including 37.1 million sq ft of completed assets with 92% committed occupancy, and 1.2 million sq ft under construction. It projected a 14% CAGR in NOI over FY2025–28E, driven by contractual escalations, occupancy improvement, and development buildouts. Kotak also estimated gross asset value at ₹695,000 million by September 2027, with 91% from office assets and the balance from solar power and maintenance services.

Key numbers table

Market context and what management referenced

Management linked its FY26 narrative to broader office-market indicators it cited. It referenced India’s office absorption reaching 82 million sq ft in calendar 2025, with GCCs contributing close to 40% of demand. It also pointed to India’s real GDP growth at 8.2% in Q2 FY26. These datapoints were used to frame office demand as structural rather than cyclical in its commentary.

Market impact and analysis

From an operating standpoint, KRT’s FY26 update tied together three drivers that typically matter most for office REIT cash flows: volumes (3.5 million sq ft leasing), pricing (26% leasing spreads and 7% in-place rent growth), and financial flexibility (18% LTV). The 88% NOI margin cited in the release also indicates a high conversion of revenue into property-level income, though margin comparisons across peers were not provided in the supplied excerpts. On capital structure, the move from 8.6% to 7.2% cost of debt and the FY26 blended cost of 7.3% on new debt raised are relevant because interest costs directly influence distributable cash flows.

Conclusion

Knowledge Realty Trust closed FY26 with 16% revenue growth to ₹45,772 million and 18% NOI growth to ₹40,484 million, alongside 92% occupancy and 3.5 million sq ft of leasing. The REIT’s near-term milestones include commissioning 1.2 million sq ft of under-construction space in early FY27, progressing the Bengaluru buildout, and updating markets on acquisitions and occupancy improvement plans, including its stated aspiration to reach 94%-95% occupancy in FY27.