Office REITs in India Eye Portfolio Growth and Higher Occupancy

Bengaluru: Office real estate investment trusts (REITs) in India are gearing up to increase their portfolios through acquisitions and development, targeting higher occupancy and leasing. Despite global workspace contraction and subdued sentiments, India's office market continues to thrive.

The four publicly listed office REITs in the country—Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust (BIRET), and Knowledge Realty Trust (KRT)—have seen their net operating income, occupancy levels, and distributions grow in the first half of 2025-26. This growth is expected to continue in H2 FY26, driven by demand and leasing from global capability centres (GCCs) and domestic occupiers.

Mindspace REIT has expanded its completed portfolio by over 4.2 million sq ft in the last nine months through organic and inorganic growth strategies. Going forward, it plans to focus more on acquisitions to stimulate growth, looking at multiple third-party assets and right-of-first-offer (Rofo) assets from sponsors.

“Our portfolio's committed occupancy has increased to 94.6% driven by good leasing momentum. So, the drop in leasing by IT services firms has been filled up by MNCs, GCCs, and Indian companies,” said Ramesh Nair, managing director and CEO of Mindspace REIT.

REITs pool income-generating real estate assets, such as office parks and shopping malls, to help investors earn a share of the income produced without purchasing the properties. SEBI regulations require at least 80% of a REIT’s assets to be completed and income-producing.

Brookfield REIT announced in November its plans to acquire a 100% interest in Ecoworld, a 7.7 million sq ft Grade A office park in Bengaluru, for ₹13,125 crore. The property is currently part of Brookfield Properties' portfolio. After the acquisition, Brookfield REIT or BIRET's operating area will increase by 31%, while the share of GCCs in tenancy will rise to 45%.

With increased leasing, committed occupancy levels for all office REITs have crossed 90%, and some expect them to reach the mid-90s mark by the end of FY26. For instance, BIRET's committed occupancy rose to 90% at the end of H1FY26 from 85% in H1FY25. Committed occupancy refers not only to space that is physically occupied but also to space that has signed leases.

Bengaluru developer Sattva Group and Blackstone-backed Knowledge Realty Trust (KRT) declared a distribution of ₹690 crore, or ₹1.55 per unit, during the quarter ended September, in its first distribution payout since listing in August. KRT clocked 1.8 million sq ft of gross leasing in H1FY26, and portfolio occupancy rose to 92%.

“Leasing has happened at an 8% premium to market, and rental growth has happened in Hyderabad, Bengaluru, and Mumbai. In a significant change, we are seeing annual rental escalation in cities such as Hyderabad and Mumbai, compared to the three-year escalation before,” said Quaiser Parvez, chief operating officer of KRT.

Of the 60 million sq ft of gross leasing between January and September 2025, GCCs accounted for nearly 35-40%, as per property advisory CBRE India. Office leasing is expected to surpass 80 million sq ft this year, said Ram Chandnani, MD, leasing services at CBRE India.

Embassy REIT, India's first listed real estate investment trust, clocked 3.5 million sq ft of gross leasing in the first six months of FY26, the highest among REITs. The REIT, which has a 50.8 million sq ft portfolio, is launching 2 million sq ft of new projects in Chennai, taking the total to 7.2 million sq ft.