Embassy Office Parks REIT, India's first listed real estate investment trust, declared a record quarterly distribution of INR 7.07 a unit for the three months to Sept. 30, up 9% from INR 6.51 a year earlier, as global capability centers took 85% of the space it leased.

The payout totals INR 6.70 billion. Net operating income rose 15% to INR 10.69 billion and revenue from operations climbed 16% to INR 13.03 billion, the trust said in its Oct. 28 results release. A year earlier, revenue was INR 11.24 billion and NOI was INR 9.27 billion, according to its results for that quarter.

For investors in Hong Kong and Singapore, Embassy is the largest Indian office landlord they can buy into through a listed vehicle, and it describes itself as Asia's largest office REIT by area. Its numbers are a direct read on how much of the global corporate hiring now going to Indian back offices is turning into rent. Units record on Oct. 31 for the distribution, which is due to be paid by Nov. 6.

GCCs Drive Embassy REIT's Leasing

The trust leased 1.5 million square feet in the quarter, the same volume as a year earlier. The mix has shifted. Global capability centers, the in-house technology, finance and engineering hubs that multinationals run in India, accounted for 85% of demand, compared with about 60% across the whole of the 2026 fiscal year, according to the April results.

New leases made up 0.9 million square feet and were signed at rents averaging 9% above market, Embassy said. The biggest deal was a full 0.5 million-square-foot building at Embassy TechVillage in Bengaluru, pre-leased to a global engineering company at a 15% premium to market rent. Chief Executive Amit Shetty said the deal showed "the pricing power of our world-class office campuses."

Pune contributed 0.2 million square feet across three properties, about a quarter of new leasing, and the trust said that activity contributed to a 3-percentage-point gain in occupancy during the quarter. In Chennai, Embassy completed a 0.6 million-square-foot block at Embassy Splendid TechZone that is fully committed to a U.S. capability center. It has a further 5.6 million square feet under development in Bengaluru and Chennai.

Hotels, a smaller part of the business, also helped. Hotel revenue rose 22% on a 10% increase in average daily rates, and the Hilton Garden Inn at Embassy TechVillage broke even on operating cash in its first quarter, the trust said.

Occupancy Stalls Below Target

The weaker number is occupancy. The portfolio stood at 93% by value at the end of September, the same level as a year earlier and below the 94% Embassy reported at the end of March. In April, the manager guided to 95% to 96% by value for the fiscal year ending March 2027, so the second half needs to absorb more space than the first.

City by city, the picture is uneven. Mumbai is fully occupied and Bengaluru, Chennai and Noida each sit at 94%, according to the release, which points to Pune as the main drag on the average despite the quarter's gains there.

The trust's April guidance called for distributions of INR 27.00 to INR 28.60 a unit in the current fiscal year, about 10% growth at the midpoint, and double-digit NOI growth. The September quarter's 9% rise in distribution per unit and 15% rise in NOI keep it close to that path.

Valuation and Debt

Gross asset value rose 16% from a year earlier to about INR 740 billion, and net asset value climbed 18% to INR 524.74 a unit. Embassy attributed the gain to higher market rents, newly completed buildings and changes in valuation assumptions. At the end of March, NAV was INR 491.62 a unit.

On the funding side, the trust raised INR 20.5 billion of debt in the quarter at a blended rate of 7.14%, below the 7.25% in-place cost of debt it reported in April. That included an INR 10 billion bank loan that Embassy said was the first bank financing to an Indian REIT at the trust level under the Reserve Bank of India's new lending framework. Indian banks have been expanding credit faster than deposits this year, and REITs are now a new outlet for that lending.

Embassy was also added to the Nifty 500 and Nifty Midcap 150 indexes, and it said it is the only REIT in the Midcap 150, a change that brings it in front of index-tracking funds.

Demand for top-tier offices is tight across the region. In Singapore, prime office vacancy fell to 2.6% as artificial-intelligence companies hunted for space. In India, Embassy's test is whether the capability-center demand that filled its new buildings in Bengaluru and Chennai can lift portfolio occupancy from 93% to its 95% target by March 31.