💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY2026 reached INR 22,019 million, representing a 17% year-on-year increase. Growth was primarily driven by stable rentals, contractual escalations, and improved occupancy across the 29 office assets and 4 solar assets.

Geographic Revenue Split

The portfolio is strategically located across six major Indian cities, with significant concentrations in Hyderabad (Sattva Knowledge City: 7.3 msf, Sattva Knowledge Park: 3.3 msf), Mumbai (One BKC: 0.7 msf, One World Center: 1.7 msf), and Bangalore. Specific percentage contribution per city is not disclosed.

Profitability Margins

The trust maintained a high Net Operating Income (NOI) margin of 89% and an EBITDA margin of 87% for H1 FY2026. NOI grew by 20% year-on-year to reach INR 19,544 million, outpacing revenue growth due to operational efficiencies.

EBITDA Margin

EBITDA margin stood at 87% for H1 FY2026. This high margin reflects the low operational expenditure inherent in the leasing business and the high-quality, Grade A nature of the assets which command premium rentals.

Capital Expenditure

KRT has a development pipeline of 9.2 million square feet in Bangalore, including 1.2 million square feet of near-ready under-construction assets across two projects expected to be delivered by the end of FY2026. Specific INR Cr capex values for these projects are not disclosed.

Credit Rating & Borrowing

KRT holds 'CRISIL AAA/Stable' and 'ICRA AAA (Stable)' ratings. The overall cost of debt was reduced by 120 bps to 7.4% following the issuance of INR 1,600 Cr in NCDs at a 7.2% coupon rate and refinancing of SPV-level debt.

⚙️ Operational Drivers

Raw Materials

As a REIT, primary operational 'inputs' are construction materials for the 9.2 msf pipeline, including steel, cement, and glass. For operations, electricity is a key cost, partially offset by 4 solar assets (1 operational, 3 under construction).

Import Sources

Not disclosed in available documents; however, construction materials are typically sourced from domestic Indian suppliers like SAIL or UltraTech for projects in Bangalore and Hyderabad.

Capacity Expansion

Current operational leasable area is 37.1 msf. Planned expansion includes 1.2 msf of under-construction office space to be completed by FY2026 and a further development potential of 8.0 msf, totaling a 46.3 msf portfolio.

Raw Material Costs

Not applicable as a percentage of revenue for a REIT; however, construction costs for the 9.2 msf pipeline are a primary driver of capital deployment.

Manufacturing Efficiency

Committed occupancy was robust at 92% as of September 2025. High occupancy ensures that the fixed costs of maintaining Grade A parks are spread across a larger rental base, protecting the 89% NOI margin.

Logistics & Distribution

Not applicable for a REIT.

📈 Strategic Growth

Expected Growth Rate

17-20%

Growth Strategy

Growth will be achieved through the completion and leasing of the 1.2 msf under-construction portfolio by FY2026, contractual rent escalations, and a 'strong acquisition focus' supported by INR 7,000-8,000 Cr of financing headroom.

Products & Services

Leasing of Grade A commercial office spaces, IT parks, Special Economic Zones (SEZs), solar power generation, and facility management services.

Brand Portfolio

Sattva Knowledge City, Sattva Knowledge Park, Sattva Knowledge Capital, One BKC, One World Center, One International Center.

New Products/Services

Deployment of AI-enabled building operations and digital tools to enhance tenant experience and reduce operational costs, expected to improve long-term tenant retention.

Market Expansion

Focus on deepening presence in Bangalore with a 9.2 msf pipeline and maintaining dominance in Hyderabad and Mumbai prime business districts.

Market Share & Ranking

KRT is the largest REIT in India by market capitalization (over INR 52,000 crore) and the second largest by leasable area (46.3 msf).

Strategic Alliances

Sponsored by BREP Asia SG L&T Holdings (Blackstone Group) and the Sattva Group. Axis Bank serves as a key financial partner and related party for borrowing up to 35% of consolidated debt.

🌍 External Factors

Industry Trends

The industry is seeing a trend toward high-quality Grade A assets with sustainability certifications. KRT is positioning itself by investing in solar assets and AI-enabled operations to meet evolving tenant demands.

Competitive Landscape

Competes with other major Indian REITs and private developers for Grade A tenants in prime micro-markets of Mumbai, Bangalore, and Hyderabad.

Competitive Moat

Moat is built on prime asset locations, a large scale of 46.3 msf, and strong sponsorship from Blackstone and Sattva. These advantages are sustainable due to the high capital intensity and regulatory barriers to entry for new REITs.

Macro Economic Sensitivity

Highly sensitive to the growth of the Indian service economy and urbanization; rapid urbanization supports demand for the 37.1 msf of commercial real estate.

Consumer Behavior

Shift toward 'flight to quality' where tenants prefer premium, well-managed office parks over standalone buildings, benefiting KRT's Grade A portfolio.

Geopolitical Risks

Low direct risk, though global economic downturns could affect the business risk profiles of international tenants, potentially impacting occupancy levels.

⚖️ Regulatory & Governance

Industry Regulations

Mandated by SEBI REIT Regulations 2014 to distribute at least 90% of Net Distributable Cash Flow (NDCF). Borrowing is capped by SEBI at 49% of asset value, though KRT has an internal cap of 35%.

Environmental Compliance

Investing in sustainability through 4 solar assets to meet power requirements and reduce carbon footprint; specific ESG compliance costs not disclosed.

Taxation Policy Impact

98% of the Q2 FY2026 distribution was tax-exempt or tax-deferred; this is expected to normalize to 86-91% for the full year FY2026.

⚠️ Risk Analysis

Key Uncertainties

Refinancing risk for bullet maturities of NCDs and susceptibility to real estate volatility which could cause fluctuations in the 92% occupancy rate.

Geographic Concentration Risk

Significant concentration in Hyderabad and Bangalore, where the majority of the 46.3 msf portfolio and 9.2 msf pipeline are located.

Third Party Dependencies

Dependency on Axis Bank for up to 35% of consolidated borrowings and on the Sattva/Blackstone sponsors for strategic management.

Technology Obsolescence Risk

Risk of buildings becoming outdated is mitigated by ongoing investments in AI-enabled operations and digital building tools.

Credit & Counterparty Risk

Low risk due to a reputed tenant base with healthy credit profiles; top 10 tenants contribute 28% of rentals.