Ladies and gentlemen, good day and welcome to the Q4 and full year fiscal year 2026 earnings call for Brookfield India Real Estate Trust. Brookfield India Real Estate Trust released its financial results for the quarter and full year ended March 31st, 2026. Brookfield India Real Estate Trust has placed the financial results earning presentation in the investors section on the website at www.brookfieldindiareit.in. Please note that the management may make certain remarks during this call that could be considered forward-looking statements. Actual results may differ from these statements, and Brookfield India Real Estate Trust does not guarantee such outcomes or nor undertake any obligation to update them. Any financial guidance or pro forma information shared today represents management estimates based on specific assumptions and has not been audited, reviewed, or independently verified.
We caution you against placing undue reliance on this information as there can be no assurance of achieving the results discussed. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. On the call, we have with us today, Mr. Alok Aggarwal, CEO and MD, Mr. Rachit Kothari, Non-Executive Director, Mr. Amit Jain, CFO of Brookprop Management Services Private Limited, Mr. Shailendra Sabhnani from Brookfield. I now hand the conference over to the management for their opening remarks. Thank you, and over to you, sir.
Thank you. Good afternoon, good afternoon. This is Alok. Welcome to Brookfield India Real Estate Trust Q4 and fiscal year 2026 earnings call. Thanks to all our unitholders, analysts, and participants for joining us today. Let me start by providing a brief update on the broader macro environment in India. India's structural advantages, including its deep talent pool, competitive occupancy costs, digital ecosystem, and policy stability continue to strengthen its position as a preferred destination for multinational corporations and global capability centers. India office market maintained strong momentum during fiscal year 2026, gross leasing reaching a record 91 million sq ft and net absorption of 58 million sq ft. Demand continues to be concentrated in high quality, institutionally managed office campuses that offer operational reliability, sustainability credentials, employee wellness infrastructure, and flexibility for future expansion.
As vacancy levels tighten in leading office micro markets, rental growth and mark-to-market opportunities continue to remain favorable for high-quality landlords. Against this backdrop, Brookfield India REIT is well-positioned with one of India's highest qualities and most diversified office portfolio, spanning 32.5 million sq ft across key gateway markets with strong exposure to multinational tenants and GCC occupiers. Financial Year 2026 was a transformational year for Brookfield India REIT. I'm happy to mention that we have completed five years since listing, marking 5x growth in terms of AUM. We delivered record leasing performance during the year, achieved meaningful occupancy growth across our portfolio, and completed the acquisition of Ecoworld, making Bengaluru our largest market. Together with Mumbai, these GCC-focused markets now account for majority of the portfolio value.
In April 2026, we also successfully closed two capital raising initiatives, a INR 2,600 crore qualified institutional placement and INR 1,125 crore primary investment in Ecoworld by 360 ONE, laying a strong foundation for future growth. Let me walk you through our operating performance for the quarter and the full year. During fiscal year 2026, we achieved a record four million sq ft of gross leasing, including a 1.6 million sq ft in Q4 2026 alone. Leasing demand remained broad-based across sectors and geographies, demonstrating the resilience and diversification of demand across our portfolio. Importantly, approximately 50% of Q4 and fiscal year 2026 leasing came from GCC occupiers, reinforcing Brookfield India REIT's strong positioning as a preferred partner for multinational corporations establishing or expanding their Indian operations.
We continue to see increasing demand from occupiers involved in high-value functions such as engineering, analytics, R&D, financial operations, consulting, and technology development. Our committed occupancy increased to 93%, up 5% year-on-year, while maintaining a long-dated WALE of 6.7 years. Occupancy growth was particularly strong across our SEZ portfolio, where committed occupancy improved from 84% - 91% over the last year. Non-SEZ properties continue to operate at a resilient 96% occupancy. The leasing momentum continues to be good across product and tenant categories across our portfolio. In addition, we have been strategically converting SEZ spaces when NPA across our campuses. In the current quarter, we have applied for conversion of 3.40 lakh sq ft space across N2 and Ecoworld. Out of this space, about 2.60 lakh sq ft has already been tied up.
Out of the total NPA spaces, which include converted and applied for conversion, we have already leased out 80% of the space, and we have a healthy pipeline of tenants for these spaces. In addition, we have also de-risked our near-term lease expiry profile by proactively securing 0.7 million square feet of commitments against fiscal year 2027 expiries through early renewals and expansion-led re-leasing. This also reflects the tenant stickiness in the portfolio and our robust tenant relationships. fiscal year 2026 also marked an important milestone in our growth journey with the successful acquisition of Ecoworld, a 7.7 million square feet premium Grade A office campus located in Outer Ring Road, Bengaluru.
We successfully raised approximately INR 37 billion from our key institutional investors through a combination of INR 26 billion QIP in April 2026 and INR 11.3 billion primary investment by 360 ONE into the Ecoworld SPV in April 2026. At the same time, retaining full operational and board control of the Ecoworld SPV while bringing in a high-quality institutional capital partner. These transactions further strengthen our balance sheet and created significant headroom for future growth opportunities. Our pro forma LTV now stands at 25.2%, implying a 10% headroom from the upper end of our target LTV threshold of 35%, which translates to dry powder of approximately INR 50 billion for future growth opportunities. We have been in forefront of ESG and sustainability initiatives, that continues to remain deeply embedded within our operating portfolio.
During the quarter, Brookfield India REIT re-received the Golden Peacock Award for business excellence from the Institute of Directors, recognizing our strong governance framework and operational excellence. Additionally, Worldmark New Delhi, Worldmark Gurgaon, and Ascent Center received EDGE Advanced certification from IFC. Downtown Powai renewed ISO certifications across quality, environmental, and safety standards. We continue to make meaningful progress against our sustainability-linked bond KPIs, including renewable energy adoption and water recycling targets. I will now hand over to Amit to take you through the financial performance for the quarter.
Thank you, Alok, and good afternoon, everyone. Let me now take you through the financial highlights for Q4 in fiscal year 2026. fiscal year 2026 was a strong year from both an operating and financial standpoint. For fiscal year 2026, our net operating income stood at INR 22.9 billion, reflecting a robust growth of approximately 24% YOY. Same-store NOI increased by approximately 10% over fiscal year 2025, driven primarily by lease up of vacant areas, mark-to-market gains, and contractual rent escalation. For fiscal year 2026, we declared distributions of INR 21.40 per unit, reflecting an increase of 11% YOY. Total distributions for the year stood at INR 15.2 billion.
For Q4 fiscal year 2026, our NOI stood at INR 7.4 billion, reflecting strong YOY growth of over 52%, supported by contribution from Ecoworld and same-store growth across the portfolio. Our balance sheet remains robust, with year-ending borrowing LTV of 32.2%, excluding shareholder loan instruments, and dual AAA stable credit rating from CRISIL and ICRA. As Alok mentioned earlier, following the QIP and the 360 ONE investment into Ecoworld SPV, our pro forma LTV is at around 25.2%, creating nearly INR 50+ billion of dry powder for future acquisitions. Our average cost of debt stands at INR 7.3% with long-dated debt profile and minimal near-term amortizations. With that, I would now request the moderator to open the floor for questions.
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. The first question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah. Thank you so much and congrats.
I'm sorry, Mr. Gulati. You're inaudible, sir. Can't hear you. Mr. Gulati? Sir, I would kindly request you to rejoin the queue, please. Mr. Gulati?
Okay. Yeah, okay.
We can't hear you, sir. Yeah. In the meanwhile, we'll take the next question from the line of Deep Shah from 360 ONE Capital. Please go ahead.
Yeah, hi. Thanks for the opportunity and congrats on the near-record high occupancies. One question is on N2. I see about both of our rentals is due for expiry. What I also see is the in-place rent and expiry is slightly higher than the in-place rent at the N2 property level. If you could give us some idea as to, is there any discussions on renewals or any color on that would be very useful. Secondly, on the debt, now with the money that we've raised both at the Ecoworld level and at the REIT level, how should we expect debt to moderate and accordingly the impact on DPU for Q1 and Q2 ?
I'm sure we might have some plan for property purchase later in the year, but we might still see some benefit on DPU, right, because of lower debt cost. These two are my questions. Thank you.
Deep, let me talk about N2. If you see N2, our occupancy is already up from 84%- 94% in one year. When you talk about expiry, as we have said, about 7 lakh square feet, we already have kind of a pre-leased or signed leases for the space which is expiring. There's one tower in two, which is, there's a tenant who was building their own campus, and they're going to relocate. We already have signed with a large tenant entire tower for leasing, and it's on a mark to market of substantial good mark to market of 25%. That's on and what was the second question in terms of rentals, did you say, in N2?
No. I was wondering if there could be any rental pressure given that the tenant which is expiring, they are at 69 versus N2 average being at 66. I think you probably answered it by saying that we are virtual that MTM already. Is that fair understanding?
Yes. We are at 94% occupancy, really, I mean, today, whatever vacant space we have is at a premium, so there's no rental pressure. We are able to achieve good mark-to-market, that's across assets and very particular about N2. That's where we are.
On your second question on debt, utilizing these QIP proceeds and the fundraise at Ecoworld, we are expecting to pay around INR 3,600 crore of debt, and our average debt cost is at around 7.3%. That will translate into an incremental interest saving of around INR 60 crore-INR 65 crore that should flow into the distributions going forward.
Right. This would probably be, let's say May onwards, right? In the sense the lower debt savings should start May onwards.
it'll the repayments will, you know, happen over a period of time and, you know, till the repayments happen, the money will be parked in, mutual funds and FDs, which will also accrue interest income for the portfolio. overall, you know, it'll be incremental to the DPU.
Understood. Understood. Thank you. Thank you, sir, and all the best.
Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah. Thank you. Can you hear me well now?
Yes, sir. Please proceed.
Okay, great. Yeah, just continuing with the interest cost. Most of your debt is still floating. How are you thinking about changing the contours of your debt?
Puneet, we did do a bond issuance in December. We continue to monitor the pricing across bank loan markets and the bond markets, as well as weigh the maturities, such that we have a balanced maturity profile. As you would see, we have very limited maturities that are upcoming. You know, we continue to evaluate the cost of financing between these markets, and we'll hopefully look to continue to increase the fixed rate instruments as on a proportionate basis. Obviously, we'll continue to watch and take decisions that are appropriate based on what is the effective cost of financing.
Is there a target fixed tenure debt that you have in mind?
The question is, do we have a target fixed to floating fixed rate ratio?
Yeah. Correct.
We don't necessarily have a particular ratio there.
Okay. Understood. Secondly, on the, you know, contours of the, you know, NDCF cash walk down, if you can talk a bit about, number one, you know, the nature of working capital related positive outflows, and also how much surplus cash would you still have been left with which you can still use, you know, to manage the distribution a bit?
On working capital, you know, we, EcoWorld, was acquired recently, into the REIT portfolio, as we know. There are certain leases that got signed recently. A big number of lease equalization reserve, which is an indirect impact, which has accrued and is flowing through the working capital adjustment. That is one.
That will be a negative number, right, in the initial years?
That will be negative number in the initial years, right?
Yeah.
On the positive side, you know, there have been security deposits inflows in the current quarter, primarily from the new leases that have been signed up. Overall, there is a positive impact on the working capital.
Yeah. Can you share the positive number for the security deposit?
What was the security deposit inflow? Total security deposit inflow in the current quarter was INR 72 crores, around INR 70 crores.
Okay. Understood.
And also-
Yeah, sorry. Go ahead, please.
No, no, please go ahead.
No, no, just continuing on the, on the, you know, the use of cash, is there a number that of cash distribution?
Right. Overall in the current quarter, the overall generation was in the range of INR 5.7 per unit. Considering the QIP happened in April, and therefore distribution was to be made to the new unit holders as well. To maintain the NDCF utilized a portion of opening cash which was available from prior acquisitions that REIT had done. Overall, you know, if you look at from a broader perspective, the overall NDCF has been positive in the current quarter.
No, no, absolutely. What I wanted to understand was, you know, of the total cash that you have, is there a quantum which you can use for this or is the entire cash available for this distribution in some sense?
We still have around INR 50 crore-INR 60 crore available with us from previous quarters that can be used towards distribution in upcoming quarters. Hope that answers your question.
Yeah. That is very useful. Thanks, Ron.
Sure.
Secondly, if you can just talk a bit about, you know, what have been the key drivers for the NAV increase that we saw in the current quarter?
Yeah. As far as our NAV, so we reported an INR 349 per unit NAV in September, and today we are reporting an INR 387. Essentially, if I look at it, we can kind of break it down into, say, three key buckets. We have gained roughly INR 2,900 crore in our asset valuations, which have kind of flown through to NAV. One-third of it is on account of reduction in cost of debt and cap rates, hence impacting the valuations. Two-third of it is on account of the operating progress that we have kind of made in our portfolio due to higher occupancy, better rent, and better NOI leading to better cash flows. This entire INR 2,900 crore have kind of flown into our NAV.
I would also want to kind of highlight that our NAV is also understated approximately by INR 4, due to certain non-cash liabilities in our non-commercial portfolio. If we manage to consolidate that non-commercial portfolio, this will also kind of vanish away. There is that INR 4 kind of a understatement which is currently there.
Understood. That's relevant. That's all from my side. Thank you so much.
Thank you. The next question is from the line of Girish Choudhary from Avendus Spark. Please go ahead.
Thank you for the opportunity. Also congratulations on the strong quarter and the year gone by. Firstly, how should we think about the DPU trajectory going forward, particularly given we are going to see a full year of Ecoworld, and whatever lease run up which is expected. If you can just give some thoughts on the trajectory of the DPU, that will be useful.
We as of now are not giving any guidance per se. You know, as you would have seen the leasing schedule, we are expecting to end fiscal year 2027 at around 96% occupancy levels, right? As you rightly said, with debt pay downs, which we discussed earlier, increase in occupancy, the DPU will definitely grow from current levels. As of now, we are not giving any guidance.
If you see last year also we increased by 11% from 19.25 to, you know, 21.5.
20.5.
Yeah, it will definitely move up. Exact, I think probably too early to say what's supposed to be number.
Yeah. Broadly, just to add to what Alok and Amit said, look, broadly, look at incomes at a 93% occupancy level, you know, should grow at 5%-6% per year. 5% is just contracted. We'll of course improve occupancy as we move along. If you just compare last two financial years, it was a 10% uptick same store. We'll expect at least 6%-7% uptick, as we trend from 93 - 97, which should ideally give us an equivalent NDCF increase, if not more. Just given, you know, we have of course some leverage in the capital structure, maybe some taxes that will offset the growth impact.
Broadly, I think 6%-7%, which should mean call it INR 1 or INR 1.5 per year from this point onwards. That should be fairly predictable.
Got it. Got it. That's useful. My next question is on the lease expiry profile. When I look at, obviously N2, you had broadly discussed has 24% of the rentals expiring in 2027. Outside of that, I also see Downtown Powai probably seeing significant expiries coming in over the next two years. Also, Ascent Center is seeing 100% of area expiring in fiscal 2028. If you could give us some color on the re-leasing strategy and also the NOI opportunity for these two assets.
Girish, for financial year 2027, we have about 2.8 million total, which is about to expire. Out of that we already have, you know, a renewed 0.7 million.
INR 1.3 million is expected to be renewed and about INR 0.8 billion will expire. Just to talk about individual cases you talked about, ATS Center, same tenant is continuing. That's continuing. In Downtown Powai, you know, we hope to renew. Just, you know, I would like to maintain. We're already at 93%, hoping to, you know, kind of go to 96%-97%. The space, you know, what is the availability of space is kind of, you know, in short supply. The demand is good. We have talked about, you know, able to renew most of the leases, if some space is expiring, some tenant is vacating for whatever reasons, we are able to get mark to market and able to get better numbers.
Okay. Got it. Lastly, you spoke about the NAV drivers from September till, let's say, March of around the INR 387 per share across three buckets. If I have to look forward next year also, how should we think about the drivers of NAV going ahead across the three different buckets you mentioned about?
In our public disclosures, one thing we have kind of given is that we have reported a INR 387. We have earlier explained that there is that INR 4 approximately addition that can kind of come in. At the same time, we have done this April 2027 QIP, this also will have an impact as we go forward. On top of that, yes, the QIP proceeds will be used to kind of, I mean, eventually will go into future acquisition, which will add to our NAV. There will be growth in the current cash flows of the existing portfolio, which will also kind of drive and flow through to the NAV. Basically, going forward, there is an organic growth in NAV that is expected.
On top of that, the QIP proceeds being used for inorganic growth will further improve the NAV going forward.
Got it. Got it. Thank you. Over to you.
Thank you. We'll take the next question from the line of Karan Khanna from Ambit Capital. Please go ahead.
Yeah. Hi, good morning, and thanks for taking my questions. Firstly, Alok, in light of the recent global geopolitical uncertainties, what's the kind of feedback that you're getting particularly from global tenants regarding future leasing decisions, including renewals and more importantly on the expansion plans? How does that fare versus, let's say, how things were, say, a couple of years back?
Just, can you repeat your last sentence? What was the last sentence you said, Karan?
Yeah. I was asking, you know, in terms of leasing decisions, how they stand today versus how things were, let's say, a couple of years back.
No. Karan, when you talk about, you know, global turmoil, especially let me talk about, you know, we have seen in terms of tariff, we have seen it had no impact. Occupancies have meaningfully moved up in last one year. That is something visible to everybody. Now let's talk about the war which is happening in the Gulf. If you really see, this war is not going to have a mid to long-term impact on any of the leasing decisions. It's not going to really A GCC is not going to take a decision based on this war, whether they should relocate to India. That's quite independent. What's possible that if this war continues for, let's say for few more months, some delays can happen.
No, no, you know, no kind of a leasing demand is going to be lost. No GCC is going to take a decision not to come to India. We can expect few weeks or few months delay if this war continues. That's something at the max can happen. That's something which I would like to say.
Sure. Just if I look at the acquisition pipeline and let's say the slide number 12, given you have almost INR 50 billion plus of dry powder. If you think about some of the sponsor pipeline, going forward, would you look to acquire sponsor assets which can, you know, deepen presence in the existing markets, such as Worldmark or Ecospace or some of the assets in Mumbai? Would you like to evaluate new markets such as Pune and Chennai first, to further diversify the portfolio? If you can also provide a bit of color on both, the sponsor and third-party acquisitions that you're currently evaluating. Going into fiscal year 2027, what does the acquisition pipeline look like?
Yeah. Maybe I'll take that. I think, Karan, look, the sponsor group today has in their network about 11 - 12 million sq ft of operating assets. Some of them, as you rightly said, are on page 12. It'll be natural for us to consolidate stakes in situations where we don't own the entire 100% should they come up. Also, I would say in terms of markets, each of these are pretty robust markets, right? If you look at growing in Mumbai or whether you are looking to add a Pune, I don't think I don't think we look at these markets very differently from a strategy standpoint. I would rather say that there's a big focus on the REIT today to ensure two things. Number one, buy highly occupied assets.
I think our choices of acquisitions we pursue is largely driven by occupancies of those assets being in the 90% plus ZIP codes. There's some upside, but also, you know, a large part of stability that adds to the portfolio. Second is really to look at assets which are now more front office or GCC-led in nature, you know, to just diversifiscal year the portfolio a little bit more. If you just rewind the clock and we compare the portfolio we had in 2023 to what we have today in 2026, addition of Mumbai, addition of Delhi, addition of Bengaluru has really changed the flavor of how our tenancy, you know, split across the path, but also the risk profile of the larger pie that we have, right.
With some of these assets now contributing more than half the value. We'd like to tread down that path and add assets that fit that strategy as opposed to be constrained by locations. That's broadly how we think about it, but I'm not sure if it answered your question.
Sure.
Happy to answer.
Sure. No, just a follow-up in terms of fiscal year 2027 pipeline. Is there, you know, any third-party acquisition also that you're evaluating or will the focus be on consolidating stake in the existing assets first?
No. We are open to third-party opportunities as long as, of course, they're highly occupied and complement our portfolio. We have evaluated a few in the past. We'll continue to evaluate them, you know, as they come up in the market.
Sure. That's helpful, Rajat. Then lastly, in terms of the, you know, given the recent changes at the state government level, how are you rethinking about K-1? Do you expect market rentals to see a huge bump up here given the changes? What does that imply for your seven and a half lakhs sq ft of expiries here in fiscal year 2027, 2028? How does that change the overall cap rates for this asset?
I'll request Alok to take this. Yes.
Karan, actually, if you see Calcutta, we are almost 100% occupied. They're very small, almost negligible vacancy. Anyway, rentals have moved up substantially in last two years and on expiries and mark-to-market opportunities and the new tower coming up, we expect them to lease at much higher rentals. That's the situation. I'm not sure of the cap rate bit, that something changing or changing. I think that probably government will now decide. Calcutta, you know, has done pretty well for last two years, and it's expected to do better, you know, with change in government and the positive momentum.
Sure. Great. Thank you, Alok and Rachit, and all the best.
Can I add to what Alok said? I think the market level vacancy in Calcutta, not a lot of people know, this is single digit, low single digit today.
Yeah.
There's absolute dearth of space in the market. Rents of course have been capped at, call it early INR 50s levels, right.
Yeah.
It is impossible to bring in new supply at those rents today.
Yeah.
If Calcutta can attract new companies, new talent, newcomers into the city, the rents have no choice but to move up.
Yeah. This is a Yeah. No, no, that's helpful, Rajat. Yeah.
Thank you.
Great.
The next question is from the line of Yashas Gilganchi from BOB Capital Markets Limited. Please go ahead.
Good afternoon. Thank you for taking my questions. Releasing spreads achieved over the quarter were approximately 200- basis points lower than what was achieved last quarter and even maybe fiscal year 2025. What is causing the compression in spreads despite the robust leasing within your portfolio?
Yashas, I mean, see, the leasing numbers, when you see leasing numbers are average and leasing are always slightly, you know, you can always probably when you're leasing, you know, the expiring rate could be higher or could be lower. That determines where we are. You know, what's the leasing spread we get. From our point of view, on the new rents, we are always kind of, it's moving up quarter on quarter and year on year. The closing rent doesn't close, but at times we can do the analysis here. At times, the expiring rent could be a little higher, that can determine the leasing spread.
Okay. Understood. Has there been any progress on the redevelopment plan for Campus 3? Do you think additional FSI will be made available, or is there any change in your expectations of steady loan cost?
Look, that, in terms of our strategy right now is on the basis of existing FSI. The idea is to refurbish it and lease to new tenants. That's the strategy. I think, that's the strategy right now.
Understood. Any indication of when we can expect rents to flow in post the refurbishment on this asset?
We are, I mean, as you, as you would be aware that, currently the Campus Three ABC is occupied by a tenant. We are in discussions on concluding on the vacation of the tenant from the Campus Three ABC. Once that is finalized, we will, as Alok rightly said, we'll take up the refurbishment, which should take anywhere between 9-12 months. Post that, we expect the asset to be leased up in market. As we speak, we have quite a bit of inbound demand in that particular asset. We are marketing this to the RFPs in the market. There are certain expansion demands coming from the whole campus in itself. I think the leasing momentum looks very well for the Campus Three ABC.
Once we kind of finalize the vacation of the tenant, we should be up and running in next 12 months from there.
Just to add, at presently it's rent yielding. It's, you know, it's not vacant or it's not that rent is not coming. It's rent yielding right now.
Understood. That's clear. Thank you again.
Thank you. The next question is from the line of Sumit Kumar from JM Financial Institutional Securities. Please go ahead.
Hi, good afternoon. Congratulations on a good performance, and thanks for the opportunity. My first question is on the DPU growth. Wanted to understand how much of a gap is there between committed and actual rent paying occupancy which can get converted from non-cash to cash NOI? Any guidance on the distribution mix, what it should look for in fiscal year 2027, 2028?
Currently we are at a committed occupancy of 93%. There are roughly close to six or seven lakh sq ft of leasing which are under rent- free currently. This will kind of flow through into rentals going forward in the subsequent quarters. As far as DPU is concerned, Sorry, I didn't get the second question.
The distribution mix of dividend interest and principal repayment, what that would look going forward into fiscal year 2027, 2028.
Understood. Currently, I mean, while we are kind of distributing 5.5, we have a dividend mix of roughly 16 odd % in the DPU of 5.5. In fiscal year 2027, we expect this 16% to kind of inch up and reach roughly around 25 odd % number in financial year 2027. The DPU has been impacted by the recent tax regulations on MAT write-off. We were inching up to kind of get a better dividend going forward, but then given the MAT write-offs, the DPUs, the dividend component in the DPUs is targeted to be in the ballpark 25% for fiscal year 2027.
Sure. My second question is to Alok. You know, you have a number of IT companies in your top 10 tenants. Recently one of them announced job cuts as well, and the sector is experiencing a lot of headwinds. Any fallout of the same in, you know, the future demand or leasing indications that you have seen?
See, we have been talking to most of the companies. When you talk about job cuts and I don't know which particular company you're talking about. Let's not take the names. If you really see, a job cut probably would not, I mean, one company which announced a job cut, which was at global level, was just 3% of the workforce. Probably if you're talking about that company. Job cuts numbers are not very large. On the flip side, if you see, most of the IT companies have seen their maximum revenues and maximum profits in last quarter, you know, that's also a matter of fact. When we talk to these companies, these companies are, you know, of course, pretty confident.
They are taking space from us. They are giving lock-ins. They're not hesitant to give in lock-ins. I mean, the proof of pudding is we have seen lock-ins, we have seen these companies paying higher rentals, we have seen these companies having best profits and best kind of revenues in last quarter. That's where we are. Now, in mid to long term, if things have to change, that's something which needs to be assessed.
Sure. One final question, if I may. In the 25.5% LTV calculations, for pro forma numbers, any adjustments done for stake or is it like the full headline numbers that you have taken?
We have calculated this LTV, this basis the SEBI regulations, where we have looked at the consolidation of the assets we own, 50% we are getting consolidated and taking the NCP at 50%, the non-commercial portfolio. The LTV calculation is consistent with the way we have been reporting it. One thing to note is that this is, and as we have footnoted it also in that same slide, this is excluding the CCD, NCD of the shareholder debt that we have excluded from this calculation of 25%.
Sure. I'll connect separately on these numbers. Thank you, and all the best.
Sure.
Thank you. The next question is from the line of Mohit Agrawal from IIFL. Please go ahead.
Good afternoon, thanks for the opportunity. My first question is for the area where we are seeing expiries in fiscal year 2027 or fiscal year 2028, say N2, Ecoworld, Downtown Powai. What is the current market rate? Where incremental leasing is happening compared to our in-place rentals or let's say the expiring rentals. Could you give some color on that?
For each asset we have to talk about, let's say, you know, let's talk about, you know, N2. N2, you know, leasing is happening in kind of a 70 kind of range. When we talk about Ecoworld you talked about, Ecoworld, leasing is happening in, you know, anywhere INR 125, INR 130. That's the number we are getting. Of course, it depends on the space taker or other, you know, how large tenant is. These are two things you asked. You asked also for Bombay, is it?
Yeah, Mumbai also.
Bombay, it's going, you know, in range of about 200, 190, 200 or slightly around 200. These are the kind of, you know, closing numbers. As we have said, we're able to get mark to market. Expiries are there, but at least in two cases we have been able to, you know, pre-lease or close expiries. In N2 we have talked about one full tower has already been, kind of leased. It's going to get vacated by September, but it's already committed. Similarly, in Ecoworld also about 225,000 with a large GCC occupier has been closed ahead of schedule. 9 months ahead of schedule.
I've already given in terms of expiry, that INR 0.7 billion is closed, INR 1.3 billion is going to hopefully going to get committed, and INR 0.8 million will get expired. That's for next year. We are not in a position to comment for financial year 2028 as of now. That's where we stand.
Great. That's useful. Secondly, on your the cash tax rate in the NDCF breakdown, how do you see that panning out for the next, say, two years? Given the change in the MAT, you know, during the budget, do you see any increase in your or any change in your cash tax payout next year, next and in 2028?
No, no changes expected in cash taxes, at least for the next two years. Anyways, the MAT write-offs that have happened in the current financial year, as per our projections, we were not utilizing those credits in next two and a half years. To answer your question, no impact, at least in the next two and a half years.
No significant outflow on cash taxes for the next two years also?
That's correct.
Okay. Thanks a lot. Those were my questions.
Thank you. The next question is from the line of Parvez Qazi from Nuvama Group. Please go ahead.
Hi. Good afternoon, and thanks for taking my question. Couple of questions from my side. First, just wanted to get your views on ramp-up in occupancies in G1 and G2. I mean, these are our only assets which their occupancy is still in the eighties. How do we see leasing happening here?
Yeah. I mean, if you talk about G1, we have moved from 80% - 89%. I mean, very late eighties. I am confident this 89% will definitely, in next few quarters, will cross mid-90s and will move to high 90s. Demand is pretty strong. Almost 10% we have seen increase in a year's time. Same thing again, you know, it could be a question of time. In G2 we have moved from 73% - 83%. Very confident this 83% will move first to early 90s, then mid-90s and high 90s. That's something we are very confident about.
Sure.
Most of these vacancies or the pickups that you're talking about are in Non-Processing Areas from this point onwards. We in fact, have about 8 lakh sq ft of Non-Processing Areas that are currently under various stages of conversations. G1 and G2 are the largest beneficiaries of that take-up from this point onwards. Alok mentioned, I think a lot of pickups that happened over the course of the last financial year. It was almost 10 percentage points each in each of the assets that you spoke about. I think something similar should be the go-forward trend, just given these are very cost competitive locations right now, with respect to everything else that is available in Gurgaon.
Sure. I missed the total number. I think you've given it earlier. What is the total SEZ area that we have converted till date, and how much of that has been already leased? Would it be possible to get that number?
We have converted, till date, roughly 2.5 odd million sq ft, out of which, we have already leased 2.1. There is, almost 1 million sq ft that we have, applied for conversion. Put together the total number converted and applied comes to around 3.5 million sq ft, out of which, we have, leased on a total basis, roughly 2.7 odd million sq ft. The occupancy on the Non-Processing Area comes to around 79% today. As Rajat mentioned, we have a very healthy pipeline thereof , tenants to kind of take up space on the Non-Processing Area.
Beyond these 3.5 million square feet overall, will we still have some area left?
Yes. I mean, we are having a planned conversion also, which we will be kind of taking up for conversion subsequently. There are also certain leases where there is a demand, and we are trying to kind of cater to that by doing a conversion going forward. Yes, on these SEZ properties, we have headroom to kind of convert further, and we are strategically looking at converting it whenever the demand kind of comes in and we have ready occupancy tenants to kind of take up that space. I think going forward, we will be converting more spaces and NPA area uptake will be the way forward for our SEZ assets.
Sure. Post our QIP and the investment by 360 ONE, what is the total debt in Ecoworld now, I mean, both internal and external debt?
Current debt at Ecoworld was INR 5,300 crores and post, you know, now diluting the stake and raising INR 1,100 crores, the number will come down to around INR 4,200 crores of debt in Ecoworld.
Sure. Last question. We have seen pretty significant ramp-up in occupancy in our Calcutta asset. Now we do have, I think a mixed-use asset which is under construction. Apart from that, we also, I think, have about, if I'm not wrong, 2- 2.1 million sq ft of future development potential. What is our thought process about this considering the existing operational area is almost fully?
On the development, which is happening, we are expecting to complete the development by end of this year. There's a strong pipeline at good numbers on the retail piece as well as the office piece. We should be closing on; we should be able to move ahead with the leasing. In terms of land, we have various options. Of course, one option can be we can do a demand-based development. We can do that, so that's something we would prefer. Once this development happens, probably we'll take a call on that, or we should kind of monetize that.
Sure. Thanks, and all the best.
Thank you. The next question is from the line of Jatin from Bank of America. Please go ahead.
Hi. Good afternoon. Thanks for the opportunity. Sorry if I missed this earlier, but just wanted to understand your thought process, puts and takes, around the deal that you did with 360 ONE, getting partners in and have them invest in highly stabilized asset SPVs versus, let's say, have them invest at an overall REIT level. Is the former a more, slightly more accretive way and you get to keep control as well? Is that the thought process behind such deals? Thank you.
I think the thought process really was to get access to capital that is available at a price higher than what we paid, right? The real reason for raising that capital from our perspective was to offset the obligation of INR 1,125 crores of deferred consideration that is yet to be discharged against the Ecoworld acquisition, right? We didn't want to be at the mercy of the market. The capital was available. Yes, it was available for the asset as opposed to the REIT itself, but we decided to raise it in any case because the obligation was also against the asset. But again, this, in our minds, we expect that we will be able to consolidate that stake in 3-4 years' time back into the REIT.
It is just an arrangement where this, where this money has been raised at the asset, but will soon find its way into the REIT capital stack as well. Just different pockets of capital, different partnerships available to the REIT. You know, didn't want to turn away money, when it's available at a good price.
Perfect. Makes sense. Thanks a lot.
Thank you. The next question is from the line of Puneet Gulati from HSBC. Please go ahead.
Yeah, thank you so much. Just continuing on this one, on the 360 ONE, is there an explicit obligation to return this money or pay back, or give an exit to 360 in this asset?
No. There's no obligation to give an exit for cash. 360 ONE has an option to swap their interest in the asset into the interest or in the unit capital of the REIT on a NAV to NAV basis.
Okay. NAV to NAV basis. Okay.
Let's say the NAV, the stake down below is 100, and the NAV of the REIT per unit is 10, they can get 10 units of the REIT, you know, after three years from now. There's no transaction available for two to three years from today. After that, they have this option to swap for the shares of the REIT. Again, to reiterate, REIT has no obligation to buy them for cash.
Okay.
Can of course offer stock.
Understood. Understood. On the INR 463 crore of capital work in progress that you have, when should we expect that to get capitalized and what is the, you know, potential for that?
No, no. These are normal asset upgrades and development is happening in K1, as you know, right?
Yeah.
The target is.
Half a million square feet.
Completion for that is December 2026.
Okay.
Most part of this CWIP should get capitalized by December 2026.
What should we expect in terms of capitalization? How much is attributable to K, the K1? It's half a million sq ft, isn't it? Or has it been changed of anything of late?
Yeah, most part of it is related to K1. The others are small upgrades that continue to happen in some of the assets. Most part of it is attributed to K1.
Okay. Okay, great. That's all from my side. Thank you so much.
Thank you. The next question is from the line of Nilesh Doshi from Prospero Tree AMC. Please go ahead.
Thanks for the opportunity. Sir, I think you have replied about the committed occupancy versus the actual occupancy, but we didn't understand. What is the actual occupancy in percentage term?
The actual occupancy is 93%. I think what the question earlier was that out of this, 93%, there will be certain areas which will be currently under rent free, which will start generating cash rent going forward in the subsequent quarters. The actual committed occupancy as on 31st of March is 93% for the REIT.
I'm not asking about the committed occupancy because we are not generating any rent income on the committed occupancy. We can generate the income only from the actual occupancy from the date we give the possession to the tenant. That is my understanding. If I'm wrong, please clarify sir.
Yeah, that is correct. Typically, there's a three to six-month lag between committed occupancy and rent-generating occupancy. The rent-generating occupancy as it stands today is same as what it was last quarter ending, which was 91%. Somewhere between 91%-92%.
Okay, thanks. There is a gap, and it is normal in the REIT business that the 2%-3% difference between the committed and actual occupancy. It is the normal and not on the higher side.
I won't say it's a fixed gap. As I said, the committed occupancy starts generating rent within three to six months of being committed. If there was an area that was just leased the last quarter, it will start giving you rent in two quarters' time.
Okay. Sir, my next question is that, recently the Prime Minister is suggesting that the work from home culture, will it affect our business in any way?
No, I think it's a timely call, but, you know, please appreciate this is related to the war, which is going on, and it's for short term. Anyway, you know, we are in a bit of a hybrid mode where the people are working at home. In terms of leases, all of these leases are long-term leases and it's not that, you know, somebody's going to downsize. Maybe person, you know, work from home or maybe get slightly more acceptable instead of maybe two days people will do work from home, maybe three days or instead of one day, they might do two days. That's what is expected. It's not going to impact any of our leases.
Do the tenant have any right to exit earlier than their contractual period? If yes, do we charge anything extra for the early exit?
I mean, tenants do not have right to exit during the lockdowns, but in some cases, and they are very rare cases. We have not seen many of these cases. Maybe a small tenant here and there which are not in our portfolio. Even the COVID time, we have collected 98% of the rents. If some cases happen, then a call is taken and we have not really seen tenants exiting before their committed time period.
The cost for a tenant to leave today, Nilesh Doshi, is to spend INR 4,000 a square feet in a new office. That is the biggest, while the landlord may not get paid if a tenant leaves early, a tenant has to ensure that they have another INR 4,000 a square feet should they want to open an office again. In situations like these, people take a longer term view and these transient announcements do not typically impact take-up decisions or termination decisions.
Okay. Sir, last question. Sir, I think, the REIT was supposed to raise the around INR 4,000 crore and we conclude INR 2,600 crore. Any reason for the raising of less fund?
We've taken an enabling approval for up to INR 4,000 crores to be raised in one or more tranches. When we launched the transaction, we launched for a base cipher of INR 2,000 crores, and then we upsized the transaction by 30% to raise INR 2,600 crores. You know, we are pretty much, you know, within what we'd communicated at the time of taking the enabling approvals.
Okay, okay. Thank you, sir. That's all from my end. Thank you.
Thank you. The next question is from the line of Rugved from Neo Asset Management. Please go ahead.
Hello, I'm audible?
Yes, sir. Please proceed.
Yeah. I just wanted to understand the shareholding of Bharti Group currently in the Brookfield India REIT. Regarding the transaction that happened per year and how much does Bharti Group own currently?
Bharti Group had taken stock when they had swapped their holdings.
Right.
In the 50% stake. We don't comment on specifics of shareholders, but we understand they may have traded a bit of what they had gotten in terms of stock at that time, and they continue to hold the balance.
Okay. There's no disclosure of how much percentage they hold currently, right?
No. Look, you could look at public disclosures, in case there are any disclosures that are available for those holdings.
Okay. Thank you.
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.
Thank you. fiscal year 2026 has been a defining year for Brookfield India REIT. We delivered record leasing, improved occupancy meaningfully across our portfolio, completed our transformational acquisition in Bengaluru, strengthened our balance sheet, and enhanced our future growth visibility. With a high-quality portfolio diversified across India's leading office markets, strong sponsor backing, a healthy balance sheet, and a significant embedded growth potential, we believe Brookfield India REIT is well-positioned for the next phase of growth and valuation. As many of you may know, I'll be retiring in end June, and this is my last earning call at Brookfield India REIT. It has been a privilege to lead this platform and to engage with all of you since our REIT got listed in 2021.
I'm deeply grateful for your continued trust, support and partnership throughout the journey, and I'm sure you will continue to extend your trust and support to this platform going forward. I will be retiring from side lines, and I'm only a call away. Thank you for everything.
Thank you, members of the management. Ladies and gentlemen, on behalf of Brookfield India Real Estate Trust, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.