Brookfield India Real Estate Trust raised its quarterly distribution 9% to INR 5.70 a unit for the three months ended Sept. 30, as net operating income jumped 51% to INR 7.67 billion, the office landlord said in its results release. Unitholders on the register at the Nov. 5 record date will be paid by Nov. 13, according to the trust's investor presentation.

The numbers matter beyond India. Brookfield India REIT is one of the larger listed vehicles through which foreign and domestic institutions own Grade A offices in Mumbai, Gurugram, Noida, Bengaluru and Kolkata, and its results this week, alongside those of peers, show tenant demand from multinational back offices still filling space. The headline income growth, however, came mostly from buildings the trust bought rather than from its existing portfolio.

Brookfield India REIT payout and income

Income from operating lease rentals rose 52% to INR 7.22 billion from INR 4.75 billion a year earlier, the trust said. Revenue from operations climbed 48% to INR 9.96 billion.

The presentation broke the gains down. Of the INR 2.58 billion year-on-year increase in net operating income, about INR 2.18 billion came from the special purpose vehicles that hold Ecoworld, the Bengaluru campus in which the trust owns an 87% economic interest, and GBKC Floors in Mumbai. Higher rents and maintenance margins on better occupancy at the existing assets added about INR 397 million, or roughly 7.8%.

For the six months to September, net operating income rose 51% to INR 15.24 billion, and the trust declared distributions of INR 11.30 a unit, or INR 9.38 billion in total.

The make-up of the payout is shifting. Dividends accounted for 30% of the INR 5.70, double their share a year earlier, the trust said, with the rest coming from interest on and repayment of shareholder loans and other income. The trust said it has INR 4.8 billion of reserves to support further dividend growth.

Leasing led by global capability centers

Gross leasing reached 1.6 million square feet in the quarter at an average re-leasing spread of 16%, meaning rents on renewed or re-let space were that much above the expiring rates. Tenants also made early commitments on another 0.6 million square feet ahead of future expiries.

Global capability centers, the in-house technology, finance and operations units that multinationals run in India, took 51% of the space leased. Committed occupancy stood at 93%, up three percentage points from a year earlier, and the trust said vacancy had fallen about 31% year on year. Average in-place rent was INR 107 a square foot a month, up more than 7%, with a weighted average lease expiry of 6.9 years.

The trust has already secured commitments for nearly 40% of the leases scheduled to expire in the fiscal year ending March 2028. Shashank Jain, chief executive, said demand from global capability centers supported the quarter and that the trust has "access to a robust pipeline of Sponsor assets for potential acquisitions." Jain, a former co-head of PwC India's deals practice, took over from founding chief executive Alok Aggarwal on July 1, ETRealty reported in March.

The pattern is similar across the sector. Rival Embassy Office Parks REIT also reported a record distribution on GCC-led leasing for the same quarter.

Balance sheet and acquisitions

Brookfield India REIT's operating area is now 32.9 million square feet, up 34% from a year earlier, within a total leasable area of 37.5 million square feet across 11 assets. Its sponsor group holds a further 19.3 million square feet in India that could be offered to the trust.

The latest deal was small. In September, the trust and NCW's Prime Offices Fund completed a 50:50 joint acquisition of Parthos Properties, which owns the second, third and fourth floors of the Godrej BKC building in Mumbai's Bandra Kurla Complex, ETRealty reported.

Leverage leaves room for more. Loan-to-value, excluding shareholder instruments, was 26.7% at the end of September, with an average interest rate of 7.3% and AAA ratings from both ICRA and CRISIL, according to the presentation. The trust estimated it has INR 34 billion of capacity for acquisitions while keeping loan-to-value at 32.5%.

Gross asset value stood at INR 604 billion, and net asset value at INR 392 a unit. The INR 5.70 distribution is due to reach unitholders by Nov. 13.