India’s office market gains momentum on strong leasing demand: KRT CEO | Company News

India’s office space sector continues to see strong leasing demand and rising occupancy levels, with global capability centres (GCCs) and front-office occupiers driving demand, Shirish Godbole, CEO of Knowledge Realty Trust (KRT), India’s largest Reit by market capitalisation, told Business Standard.

“India is experiencing a very good period of office demand, both from a GCC and a front-office standpoint. We are obviously benefiting because of that,” Godbole, who is also the chairperson of the Indian REITs Association, said.

Godbole added that tightening visa and immigration policies in the West could benefit Indian Reits.

“Restrictions in countries such as the US, Australia and Canada are making immigration increasingly difficult. This could accelerate the movement of work towards India, which is positive from an office market perspective,” he said.

The Reit announced its quarterly results on Tuesday, with its net operating income (NOI) growing 15 per cent year-on-year (YoY). The growth, Godbole noted, was entirely organic and came from the trust’s existing assets.

The trust has around one-third of its portfolio, by value, in Mumbai, giving it exposure to front-office occupiers such as law firms, accounting firms, media companies and large Indian conglomerates. The company said it was witnessing strong demand from both global capability centres (GCCs) and front-office occupiers.

On potential expansion plans, he said the trust was looking to increase its presence in Chennai and Gurugram, where it currently has one asset each, while also exploring opportunities in Pune, where it has no existing exposure.

It achieved gross leasing of 0.8 million square feet (msf) during Q2FY27, taking its cumulative leasing in the first half of FY27 to 2.2 msf. Global capability centres accounted for 42 per cent of the total demand, compared with around 30 per cent four years ago, Godbole said.

Further, the trust’s revenue increased 13 per cent YoY to ₹1,272.5 crore in Q2FY27, while it declared record distributions of ₹764 crore for the quarter. 

Godbole said the trust’s occupancy stood at 93 per cent by area and 94 per cent by value, and was expected to increase to around 94-95 per cent over the next two quarters.

He noted that the Indian Reit market had significant growth potential, with the investor base rising from around 4,000 in 2019 to approximately five lakh currently, and expected to grow further.