Embassy Office Parks REIT, India’s first listed real estate investment trust, delivered a robust performance in the third quarter of FY2026, reporting its highest-ever quarterly revenue and net operating income. The strong results were driven by sustained leasing momentum, healthy demand from global capability centres, and disciplined financial management.
For the quarter ended December 31, 2025, the REIT posted a 17 percent year-on-year growth in revenue and a 19 percent increase in net operating income, underscoring the continued strength of India’s office market, particularly in key gateway cities.
Leasing momentum remains strong
Leasing activity remained a key highlight during the quarter. Embassy REIT leased 1.1 million sq. ft across 22 transactions in Q3, taking its total leasing to 4.6 million sq. ft for the year so far.
New leases accounted for 0.8 million sq. ft, with re-leasing spreads at 17 percent. Deals were signed at an average 5 percent premium to prevailing market rents, reflecting strong occupier demand for high-quality office spaces. Bengaluru led leasing activity, contributing more than two-thirds of the total volumes.
Chennai also emerged as a key growth market, with strong interest from large global companies. The city now anchors 42 percent of Embassy REIT’s development pipeline, signalling a shift in occupier expansion beyond traditional office hubs.
Occupancy levels stay resilient
Embassy REIT’s portfolio occupancy remained robust at 94 percent by value. Three of the five cities in which the REIT operates reported occupancy levels of 95 percent or higher, reflecting a well-leased and diversified portfolio.
The continued demand from global capability centres and technology-led firms has helped sustain occupancy levels even as new supply enters the market.
Record revenue and higher distributions
On the financial front, Embassy REIT reported revenue from operations of Rs. 1,193 crore in Q3 FY2026, marking a 17 percent year-on-year increase. Net operating income rose 19 percent to Rs. 985 crore.
The Board of Directors declared a distribution of Rs. 613 crore, translating to Rs. 6.47 per unit for the quarter, up 10 percent from a year earlier. The record date for the distribution is February 11, 2026, with payouts scheduled on or before February 18, 2026.
The REIT also strengthened its balance sheet by raising Rs. 400 crore through commercial paper at an effective interest rate of 6.44 percent per annum. This helped reduce the in-place cost of debt by 61 basis points over nine months to 7.29 percent.
Acquisition pipeline gathers pace
As part of its growth strategy, Embassy REIT received an invitation to offer for the acquisition of Embassy Zenith, a 0.4 million sq. ft prime office tower in Bengaluru. The asset is fully leased to a global technology company with a multi-trillion-dollar market capitalisation, making it a high-quality, income-accretive opportunity.
The REIT also announced the acquisition of a third-party marquee office asset measuring 0.3 million sq. ft at Embassy GolfLinks, further strengthening its Bengaluru portfolio.
According to Amit Shetty, CEO of Embassy REIT, the focus remains on acquiring premium assets that enhance long-term value while maintaining financial discipline.
Development and redevelopment drive future growth
Embassy REIT continues to expand its development and redevelopment pipeline. During the quarter, it completed 0.4 million sq. ft of new development at Embassy Splendid TechZone in Chennai, which has been fully leased to a global healthcare firm.
The REIT also launched its third redevelopment project at Embassy Manyata in Bengaluru, adding 0.8 million sq. ft at an attractive yield on cost of 23 percent. With this, the total development pipeline stands at 7.6 million sq. ft.
In addition, Embassy REIT completed a Rs. 530 crore divestment at Embassy Manyata, underlining its active capital recycling strategy.
Hospitality portfolio shows steady recovery
The hospitality segment also posted steady growth, with net operating income rising 13 percent year-on-year. This was driven by a 100 basis point increase in occupancy to 60 percent, along with an 11 percent growth in average daily room rates.
To further strengthen its park ecosystems, Embassy REIT has proposed the addition of a 116-key hotel at Embassy TechZone in Pune.
A strong finish to calendar year 2025
Embassy REIT delivered nearly 25 percent total returns in calendar year 2025, while expanding its unitholder base to over 1.25 lakh investors, up from just 4,000 at the time of its IPO.
With strong leasing demand, a growing development pipeline, and a focus on high-quality acquisitions, Embassy REIT appears well positioned to sustain momentum in the quarters ahead.
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