- The Knowledge Realty Trust REIT bidding started on August 5, 2025, and will close on August 7, 2025.
- IPO Size: The IPO is worth ₹4,800.00 crore. The issue is entirely a fresh issue of 48.00 crore shares.
- IPO Price: ₹95 to ₹100 per unit.
- Lot: 150 units and in multiples thereof.
- Allocation Investors: Not more than 75% of the issue
- Other Investors. Not less than 25% of the issue
- Lead Managers: Kotak Mahindra Capital Company Limited is the book-running lead manager. Other lead managers include Axis Capital Limited, Bofa Securities India Limited, ICICI Securities Limited, IIFL Capital Services Limited, JM Financial Limited, Morgan Stanley India Company Pvt Ltd, and SBI Capital Markets Limited.
- Registrar: Kfin Technologies Limited is the registrar for the issue.
REIT Overview:
Knowledge Realty Trust (KRT) owns and manages a high-quality office portfolio in India. Upon listing, it will be the largest office REIT in India based on Gross Asset Value (GAV) of ₹61,999 crore as of March 31, 2025, and by Net Operating Income (NOI) for FY2025 of ₹3,432.27 crore. It is also projected to be the second largest office REIT in Asia and one of the largest globally in terms of Leasable Area as of March 31, 2025.
KRT’s portfolio comprises 29 Grade A office assets totaling 46.3 million square feet (msf) as of March 31, 2025, with 37.1 msf of Completed Area, 1.2 msf of Under Construction Area, and 8.0 msf of Future Development Area. The assets are spread across 6 cities (Mumbai, Hyderabad, Bengaluru, Gurugram, Chennai, and GIFT City (Ahmedabad)), with over 90% of total revenue/value coming from prime locations in Mumbai, Hyderabad, and Bengaluru. KRT serves a diversified tenant base of more than 450 clients, including renowned Indian and global clients, multinational corporations, Fortune 500 firms, and Global Capability Centers (GCCs), with 76% of leases with global corporations and 45% of rental income from GCCs.
The trust boasts a committed occupancy of 91.4% as of March 31, 2025, which is projected to be the highest among listed Indian office REITs post-listing. The Weighted Average Lease Expiry (WALE) is 8.4 years. The sponsors are Sattva Developers Pvt. Ltd. and BREP Asia SG L&T Holding (NQ) Pte. Ltd. (Blackstone PE), with Knowledge Realty Office Management Services Pvt. Ltd. as the manager and Axis Trustee Services Ltd. as the trustee.
Financials:
Knowledge Realty Trust Financial Information (Restated Consolidated) (Amount in ₹ Crore)
| Particulars | 31 Mar 2025 | 31 Mar 2024 | 31 Mar 2023 |
|---|---|---|---|
| Revenues (₹ Cr) | 4,146.86 | 3,588.48 | 3,115.97 |
| EBITDA | 3,293.03 | 2,830.36 | 2,494.02 |
| EBITDA Margin | 79.41% | 78.88% | 80.04% |
| Net Profit | 222.52 | 339.66 | 219.24 |
| Net Profit Margin | 5.37% | 9.47% | 7.03% |
Post IPO Market cap: ₹44,344 crore.
Key Operational Metrics (as of Mar’25):
| Particulars | Value |
|---|---|
| Leasable Area (msf) | 46.3 |
| Completed Area (msf) | 37.1 |
| Under Construction Area (msf) | 1.2 |
| Committed Occupancy (%) | 91.4 |
| No. of Cities | 6 |
| WALE (years) | 8.4 |
| Net Debt to GAV (%) | 19.0 |
Observation on results: The REIT has consistently posted profitable performances for the last three fiscals. While total income has increased, net profit shows some fluctuation.
Salient Points:
- Use of funds: The net proceeds from the issue are primarily intended for the partial or full repayment or prepayment of certain financial indebtedness of the Asset SPVs and Investment Entities, totaling ₹4,640.00 crore. Up to 10% of the net proceeds may be used for general corporate purposes.
- Business scenario: India is positioned as the world’s fastest-growing major economy, with the services sector continuing to be a key driver. The Indian office market saw a record 79 msf of gross leasing in 2024, a 16% increase over 2023. GCCs leased 37% of all space taken up in Q4 2024. Bengaluru recorded the highest cumulative net absorption in India (approx. 80.5 msf from CY2016-Q1CY2025), and Hyderabad ranked as the second-largest office market in India globally with 64.9 msf during the same period. Business operations: Knowledge Realty Trust owns and manages a high-quality office portfolio in India, which includes 6 city-center offices and 23 business parks/centers. Its prime locations in Mumbai, Hyderabad, and Bengaluru generate over 90% of its total revenue. The portfolio assets house a diversified mix of prominent multinational tenants, including Fortune 500 companies and Global Capability Centers (GCCs), as well as leading domestic corporates. The Trust offers comprehensive space solutions with robust infrastructure and wide-ranging amenities, and provides customized Build-to-Suit (BTS) solutions to foster long-term relationships. Revenue Model: Revenue primarily comes from lease rentals and income from maintenance services. Business strategy: The investment is primarily for long-term purposes to achieve steady returns and appreciation on maturity. The Trust plans to reduce its leverage post-IPO by repaying debt from the fresh issue proceeds, aiming for the lowest Net Debt to GAV among Indian office REITs. KRT is strategically positioned for bring-to-trust acquisitions with a Right-of-First-Offer pipeline of 6.7 msf from sponsor assets alone.
- Risks: The Knowledge Realty Trust has a limited operating history as it was settled on October 10, 2024, and registered on October 18, 2024.
- Litigations: The asset “One Qube” is subject to a third-party litigation before the High Court of Judicature at Delhi, with an Intervention Application filed to stay its sale. The Sponsors undertake to ensure the validity of the acquisition related to One Qube.
- Portfolio Market Value Split: By GAV as of March 31, 2025: Bengaluru (33.4%), Mumbai (31.9%), Hyderabad (30.4%), Gurugram (1.5%), Chennai (2.2%), and Ahmedabad (0.6%). By Asset Type (Market Value): Business Parks and Centers (65.0%), City-Center Office Buildings (29.3%), CAM (5.2%), Solar (0.5%). By Construction Status (Market Value): Completed (91.6%), Under Construction (2.7%), Others (5.7%).
- Capacity Utilisation: KRT’s portfolio has a committed occupancy of 91.4% as of March 31, 2025.
- Expansion: KRT’s portfolio includes 1.2 msf of Under Construction Area and 8.0 msf of Future Development Area. Strategies: Post-listing, KRT aims to optimize its debt structure, including refinancing debt at Asset SPVs, to improve cost efficiencies and net distributable cash flows. The DRPL Scheme of Arrangement, involving demerging parts of Sattva Knowledge City into REIT-acquired entities, is proposed to be filed post-listing. Order clients: KRT has over 450 tenants as of March 31, 2025, with 74.1% of Gross Rentals from multinational tenants, 43.6% from GCCs, and 38.2% from Fortune 500 companies for the month ended March 31, 2025. Working capital & inventory days:
- CAGR profits/ Margins last 3 years: Net Profit CAGR from FY23 to FY25 is 0.75%.
Peers: Indian Office REITs Snapshot (as of March 31, 2025)
| Particulars | Knowledge Realty Trust (Proposed) | Embassy REIT | Mindspace REIT | Brookfield India REIT |
|---|---|---|---|---|
| Sponsor | Blackstone & Sattva | Blackstone & Embassy | K Raheja Corp. | Brookfield |
| Total Leasable Area (msf) | 46.3 | 51.1 | 37.1 | 29.0 |
| Completed Leasable Area (msf) | 37.1 | 40.3 | 30.0 | 24.5 |
| Committed Occupancy (%) | 91.4% | 87% | 91.2% | 88% |
| Cities | 6 | 5 | 4 | 5 |
| NOI (₹ mm) (FY2025) | 34,323 | 32,834 | 20,616 | 19,528 |
| GAV (₹ mm) | 619,989 | 611,632 | 366,473 | 379,542 |
| % of GAV distribution | Bengaluru – 33.4%, Mumbai – 31.9%, Hyderabad – 30.4%, Gurugram – 1.5%, Chennai – 2.2%, Ahmedabad – 0.6% | Bengaluru – 75%, Mumbai – 9%, Pune – 7%, Noida – 6%, Chennai – 3% | Mumbai – 33.9%, Hyderabad – 42%, Pune – 18.1%, Chennai – 3.3%, Facility Management Division – 2.7% | Gurugram – 33%, Mumbai – 28%, Kolkata – 8%, Delhi – 11%, Noida – 19%, Ludhiana – 1% |
| Net Debt to GAV | 19.1% | 32.0% | 24.3% | 24.9%^^ |
| City Center Office Assets (Count/Leasable Area (msf)) | 6/5.5 | 3/1.2 | 1/0.1 | 1/1.5 |
| City Center Office Assets GAV (₹ mm, %) | 181,797 (29.3%) | 41,421 (6.8%) | 5,058 (1.4%) | 42,026 (11.1%) |
| WALE | 8.4 years | 8.4 years | 7.4 years | 7 years |
| SEZ share (msf) | 6.9 | 20.0^ | 13.8 | 16.3 |
Management Commentary:
The management emphasized REIT’s unique value proposition through a balanced, low-SEZ portfolio, high occupancy (91%), premium locations, and a transparent approach to future growth and asset inclusion. Growth expectations, targeting organic Net Operating Income (NOI) growth to exceed ₹5,000 crore by FY29, achieved through contractual escalations, rental resets, and leasing up vacant areas.The financials around their quarterly distributions (at 100% of distributable cash) and the progressive yield, which is expected to rise from a stabilized 7.2% to over 8% by FY29.
Opinion:
I intend to apply for the REIT with expectation of slighly better return than FD and some capital appreciation which is expected to be mild.
There are macro trends with a strong services sector and record office leasing activity, coupled with KRT being the largest office REIT in India by GAV and NOI, and having a diverse portfolio with high occupancy.
- This post is exploratory and educational purposes only.
- Standard disclaimer: I am not a SEBI registered analyst and above analysis is for educational purpose only. Iam a postgraduate in engineering & Management . I have in the past cleared some exams like NISM-Series-V-A: Mutual Fund Distributors Certification, NISM-Series-X-A: Investment Adviser (Level 1) Certification and NISM-Series-X-B: Investment Adviser (Level 2) Examination. This post is my view on the subject matter and is only academic and exploratory in nature. It is not meant to influence investment decisions of investors. I may have bias/vested interest in covered Stock/Mutual Funds/NCD etc. due to my own investment or leaning. Further my understanding of the areas on which I write may be imperfect or incomplete and data could be wrong due to limited time and resources at my disposal. Do check the data from company’s RHP and exchanges before making any decision. Please do your own due diligence as stock market/MF investments have high degree of inherent risk.