Knowledge Realty Trust (KRT) is a Real Estate Investment Trust (REIT) backed by Sattva Group and Blackstone. KRT filed its draft papers with the Securities and Exchange Board of India (SEBI) on 06 March 2025. Knowledge Realty Trust REIT plans to raise INR 6,200 crore through a public offering. KRT REIT is the largest office REIT in India in terms of Net Operating Income (NOI) and Gross Asset Value (GAV).
Knowledge Realty Trust REIT Issue Details
- Size of the Issue: INR 6,200 crore
- Sponsors: Sattva Group and Blackstone
- Trustee: Axis Trustee Services
- Lead Managers: Kotak Mahindra Capital, Axis Capital, BofA Securities India, ICICI Securities, IIFL Capital Services, JM Financial, Morgan Stanley India, SBI Capital Markets
- Stock Exchanges: BSE and NSE
- Shareholding Pattern: Blackstone (55%), Sattva Group (45%)
- Utilisation of Funds: INR 5,800 crore to be used for debt repayment of asset SPVs and investment entities
- Outstanding Net Debt: INR 20,197.4 crore as of September 2024
Largest Office REIT in India
Knowledge Realty Trust REIT is going to be the largest office REIT in India, with assets of INR 60,000 crore and NOI of INR 4,300 crore. It is also the second largest REIT in Asia by leasable area.
The portfolio comprises 48 million square feet across 30 Grade A office assets in six cities: Hyderabad, Mumbai, Bengaluru, Chennai, Gurugram and GIFT City, Ahmedabad. Out of the total leasable area, 37.1 million square feet is ready for lease and 2.8 million square feet is under construction. Additionally, 8.2 million square feet are planned.
Major Office Assets in KRT’s Portfolio
- Sattva Knowledge City (7.3 million sq. ft.)
- Sattva Global City (12.3 million sq. ft. across 71.2 acres)
- Cessna Business Park (4.2 million sq. ft.)
- One BKC, One Unity Center, One World Center (Mumbai)
- Image Tower (400-foot structure under construction in Hyderabad)
Strong Occupancy & Tenant Base
Knowledge Realty Trust REIT portfolio boasts a 90% occupancy rate, with 76% of tenants being multinational corporations (MNCs) and 45% being Global Capability Centers (GCCs). The REIT generates nearly two-thirds of its gross rentals from multinational companies.
Blackstone’s Continued Investment in India’s REIT Market
This marks Blackstone’s fifth public listing in India’s real estate sector, following its previous listings of Embassy REIT, Mindspace REIT, Nexus Select REIT, and Ventive Hospitality. Blackstone has played a key role in shaping India’s REIT landscape and continues to strengthen its position with this latest IPO.
The REIT Market in India
India currently has four listed REITs:
- Embassy Office Parks REIT
- Mindspace Business Parks REIT
- Brookfield India Real Estate Trust REIT
- Nexus Select Trust
These REITs collectively manage over 126 million square feet of Grade A office and retail space and have distributed more than INR 21,000 crore to unitholders. The entry of Knowledge Realty Trust is expected to further expand investment opportunities in India’s commercial real estate sector.
A Brand-Neutral Approach
Unlike previous REITs that prominently carry the sponsor’s branding, Knowledge Realty Trust will follow a brand-neutral approach, enabling third-party acquisitions while allowing developers to retain their original branding. This strategy is expected to facilitate the REIT’s expansion inorganically through acquisitions.
Market Trends & Future Outlook
According to a report by real estate consultancy Vestian, nearly 60% of India’s office stock across the top seven cities is REIT-worthy. The demand for office spaces, particularly from GCCs and IT firms, has seen a resurgence post-pandemic, making it a favorable time for launching a REIT.
Experts believe that the Knowledge Realty Trust IPO will further enhance liquidity in the real estate sector by encouraging greater retail investor participation.
Ram Chandnani, Managing Director, CBRE India, stated, “India’s office sector recorded a high of 79 million square feet in gross leasing in 2024. With demand led by GCCs, the timing of this REIT IPO is ideal for investors looking for stable returns.”
Investor Benefits
- Attractive Yield: Pre-tax yield of 7%
- Tax-Efficient Distributions: 80% of distributions are tax-free
- Stable Cash Flow: 90% of net distributable cash flow to be paid to unitholders every six months
- Projected Distributions: INR 2,684 crore in FY 2026 and INR 2,990 crore in FY 2027
Conclusion
India’s investment scenario is changing with time. The trend of investments has also shifted towards new investment instruments. The performance of any issue depends on various factors, and investors should do a thorough analysis before investing their hard-earned money..
The IPO is poised to solidify KRT’s position as the largest office REIT in India and contribute to the overall growth of India’s commercial real estate market.