Brookfield India Real Estate Trust Q3 FY2026 Concall Summary

Key Takeaways

• DPU target set, path gradual: Management targets ₹25.6 per unit at 97.5% occupancy, a 19% uplift, to be achieved over the next 4–7 quarters if leasing markets hold.
• Ecoworld acquisition closed, integration underway: The 0.77 crore sq ft Bengaluru campus lifted operating area 31% and GAV ~35%; its operational cash flow will fully contribute to distributions from next quarter.
• Leasing spreads compressed this quarter on mix, not structure: Spreads fell sharply QoQ and below the long-term average because the expiry mix skewed toward leases with less embedded mark-to-market; management expects the 15–20% long-term trend to hold for the next two to three years.
• Capital stack strengthened: ₹5,500 crore raised via QIP and sustainability-linked bonds; average cost of debt expected to fall to 7.3% next quarter, with Ecoworld’s borrowing cost dropping to 7.4%.
• What to watch next quarter: Whether DPU inches up as promised, the pace of SEZ conversion uptake, and any leasing forecast management provides after declining to give one this quarter.

Portfolio Performance & Leasing

• Demand broad-based: Technology, consulting, BFSI, professional services and engineering-led occupiers drove leasing; GCCs accounted for 44% of take-up, reinforcing the flight to institutional campuses.
• SEZ conversion unlocking domestic demand: Focused non-processing area conversion is drawing marquee tenants with domestic business, including a leading Indian automobile company in G2; management expects that tenant to expand and others to follow.
• Tech churn absorbed by GCC demand: Some tech-sector space is turning over, but GCC demand is strong enough to take it in advance and on better terms for the REIT.
• WALE stable at 6.5 years: New leases signed this quarter carry an average term of approximately 11 years, offsetting any shortening elsewhere.
• Q4 expiries largely covered: Of 0.11 crore sq ft expiring, 800,000 sq ft is already spoken for and work is in progress on the remaining 300,000 sq ft.
• Leasing spreads are a mix story: The QoQ decline reflects which leases expired, not structural pressure; some assets carry significant mark-to-market, others less, and the mix shifts every quarter. Management sees the long-term trend of 15–20% holding for the next two to three years of expiries.

Aggarwal: "There's a bit of a churn in tech sector, but there's a strong enough demand from GCCs to take space in advance. And we are able to get better terms for the space which is getting vacated."

Ecoworld Acquisition & Integration

• Scale impact: The 0.77 crore sq ft premium Grade A campus on Bengaluru’s Outer Ring Road lifted consolidated operating area 31% to 3.24 crore sq ft and GAV by ~35%.
• Cash contribution this quarter: Ecoworld contributed ₹65 crore of cash, part of which serviced debt; the legal entity also had other receivables from the demerged entity that were accounted for in the ₹5.4 per unit distribution.
• Organic contribution from next quarter: The ₹5.4 per unit will be fully organically generated through operations from Q4, with no reliance on one-off receivables.
• Rent-yielding occupancy at 94%: All leases are rent-yielding except for contracted rent-free periods of 3–6 months; leases with LCD this quarter begin paying next quarter.
• Rent growth upside: Ecoworld’s passing rents are ₹102 per sq ft versus market transactions at ~30% higher; capturing that spread would drive rent growth north of 5%, potentially 7–8%.

Kothari: "Case in point is Ecoworld, where our passing rents are 102. But the market right now, on some of the recent transactions that some of our competitors have done, is at 30% higher. And if we were to capture all of that spread, our rent growth in this asset, which is the highest value asset in the REIT right now, will be north of 5% for sure, and 7%-8% potentially, because of the spread, right?"

DPU Trajectory & Distribution

• Target anchored to occupancy: The ₹25.6 per unit DPU target assumes 97.5% stabilized occupancy and does not yet factor contractual escalations or mark-to-market gains.
• Path is gradual, not back-ended: DPU will inch up every quarter; management wants to reach the target in 4–5 quarters, maybe 6–7, and within two years if leasing markets stay supportive.
• Distribution mix shifting: Capital restructuring schemes are flowing; dividends were distributed from the K1 entity this quarter after a capital reduction scheme; next year Ecoworld, K1, Festus, N1 and CIOP will all declare dividends, targeting a ~30% dividend mix in overall distributions.
• Ex-Ecoworld generation also ₹5.4: Robust leasing performance drove the ex-Ecoworld component to ₹5.4 per unit, matching Ecoworld’s own contribution this quarter.

Capital Management & Balance Sheet

• ₹5,500 crore raised: A ₹3,500 crore QIP (3x subscribed) and India’s largest sustainability-linked REIT bonds (₹2,000 crore) were completed.
• Cost of debt falling: Average cost of debt expected at 7.3% in Q4 FY26, helped by the 25 bps repo cut and a reduction in Ecoworld SPV borrowing cost to 7.4% by early February.
• LTV target: Bank borrowing LTV currently at 31%; management aims to stay around 33% long-term, with a cap of 33–35%.
• Sustainability framework adopted: Blueprint 2030 and a Sustainability-Linked Finance Framework were put in place; multiple assets received WELL, IGBC Net Zero Energy and energy conservation ratings.

SEZ Conversion & Occupancy Build

• Conversion is demand-led: About 0.05 crore sq ft of the 0.12 crore sq ft applied for in the second phase sits in G2, largely backed by LOIs or advanced user discussions; G1 has no component in this phase.
• Speed once committed: When a lease transaction reaches advanced stage or near-signing, conversion to non-processing area takes 75–90 days.
• Occupancy heading to high 90s: All assets are expected to reach high-90s occupancy within 12–18 months; G1 and G2 occupancy will continue moving up.
• Conversion is irreversible, so selective: At 92% occupancy with only 8% vacancy, management is mindful about which spaces to convert since the decision cannot be undone.

Aggarwal: "Please appreciate we are already at 92% and we only have 8% of vacancy and we have to be mindful of which all spaces we can take up for conversion because once converted, it cannot be re-done."

Acquisition & Growth Strategy

• Preference for stable assets: The REIT will continue to buy stabilized assets with limited operating risk, similar to the North Commercial Portfolio and Ecoworld.
• Scale opens the aperture: Given its current scale, the REIT can now also consider opportunities with some residual leasing or development.
• N2 expiry being managed: Management is hopeful of backfilling space before expiry; part of the expiring space is expected to be renewed.

Guidance & Commitments

Key Metrics