ICICI Securities launches coverage on Knowledge Realty Trust
ICICI Securities has officially entered the market for Knowledge Realty Trust (KRT), one of India’s largest real‑estate investment trusts (REITs). The brokerage has issued a BUY rating and set a target price of INR 130 per unit, valuing the trust at a single‑year earnings‑based multiple of one.
Portfolio strength and occupancy dynamics
KRT controls a high‑quality office portfolio that totals 46.5 million square feet of leasable area as of June 2026. The trust’s tenants are largely well‑established corporates, which gives the portfolio a solid income base. ICICI notes that the gap between economic and committed occupancy is expected to shrink, a trend that should lift operating income.
Forecasted operating performance
The research team projects a 9 % compound annual growth rate in net operating income (NOI) for the period FY26‑FY29. This growth is underpinned by a 25 % market‑to‑market (MTM) turnover of the portfolio and a pipeline of under‑construction assets, including those that could be acquired through right‑of‑first‑offer (ROFO) agreements.
Distribution and dividend outlook
At the current market price, KRT is expected to offer distribution yields of 6.2 % in FY27, 6.8 % in FY28 and 7.3 % in FY29. Over the same four‑year window, the dividend per unit (DPU) is forecast to rise at an 8.7 % compound annual growth rate.
Investment thesis
ICICI’s BUY recommendation hinges on several factors:
1. **Scale and tenant quality** – KRT’s sizeable, high‑grade office base and strong corporate tenants provide a resilient revenue stream. 2. **Improving occupancy** – A narrowing gap between economic and committed occupancy should lift NOI. 3. **Pipeline upside** – A robust construction pipeline and potential ROFO assets offer room for portfolio expansion. 4. **Valuation** – The trust is currently priced at a 1× NAV multiple, which the brokerage views as attractive relative to peers.
What to watch next
Investors should monitor KRT’s progress in closing its under‑construction projects and any changes in occupancy rates. Additionally, the trust’s ability to secure ROFO assets could accelerate growth beyond the current projections.
Disclaimer
The views expressed are those of ICICI Securities and not of Moneycontrol.com. Users are advised to consult certified financial experts before making investment decisions.