Brookfield India REIT Net Property Income Surges 89% in Q4 on Record Leasing

Brookfield India Real Estate Trust (BIRET) saw its net operating income for the fourth quarter jump by 89 percent from the same period a year earlier to reach INR 45.3 billion ($550 million) on record levels of new leasing.

BIRET reported on Monday that, including renewals, it booked 1 million square feet (92,900 square metres) in leases across its portfolio of office parks from October through December, as multinationals and tech giants continued to take up more grade A office space for their offshore service centres in Asia’s third-largest economy.

“Our assets witnessed strong traction with robust leasing demand from global capability centres of large corporates and technology services companies,” BIRET chief executive officer Alok Aggarwal said. “With a favourable leasing outlook and limited term expiries over the next four quarters, we foresee substantial occupancy improvement throughout calendar year 2024.”

The record result for the three-year-old REIT comes after BIRET, through a joint venture with Singapore’s GIC, added two assets measuring a total of 6.5 million square feet (603,870 square metres) to its portfolio in a deal signed in May of last year.

Multinationals Take More Space

Global capability centres accounted for 54 percent of the trust’s new leases last quarter as multinationals continued to base more of their services in India, with management consulting firm Accenture signing a new deal for 52,000 square feet in Gurugram. During the period, accounting firm Deloitte renewed a lease for 233,000 square feet of space in BIRET’s newly acquired Mumbai facility.

In August the REIT’s 50:50 joint venture with GIC completed its acquisitions of Downtown Powai in Mumbai and Candor TechSpace Sector G1 in Gurugram from the trust’s sponsor, Brookfield Asset Management, with the two properties valued at $1.4 billion.

With the additions to the portfolio providing INR 22 billion in new income, BIRET’s fourth quarter revenue from operations climbed by 77 percent from a year earlier to INR 53.1 billion.

The REIT ended the year with average committed occupancy of 80 percent across its portfolio, unchanged from 2022, with its set of offices across Gurugram, Noida, Mumbai and Kolkata measuring 25.4 million square feet following the August acquisitions.

With half of its fourth quarter leases coming from renewals, BIRET signed new agreements for 509,000 square feet from October through December, which was up by 22 percent compared to the previous quarter and the highest total for fresh deals of any quarter since its IPO three years ago.

Following its record performance, BIRET now aims to sign as much as 2.4 million square feet of new leases in the next four to five quarters.

Tenants leased a total of 20.2 million square feet of workspace across India’s top six cities in the final three months of 2023, according to a recent Colliers report, which was up 92 percent from a year earlier and set a new record for the country.

Tech Drives Leasing

BIRET’s record performance aligns with other listed REITs in the market, with Singapore-listed CapitaLand India Trust having seen its net property income climb by 17 percent to INR 11 billion for the financial year ending 2023, from INR 9.4 billion in 2022, based on a report released last month by the SGX-listed vehicle.

Colliers said tech firms continue to be the top driver of office demand in the subcontinent, having accounted for 25 percent of office leasing in 2023. Banking and financial services companies were next on the list, followed by engineering and manufacturing firms.

For this year, the property agency expects those three sectors to continue to fuel deals, along with healthcare and flexible workspace operators.

“The demand momentum, particularly as seen during the last quarter, will pave way for an optimistic start to 2024,” said Arpit Mehrotra, managing director and head of office services at Colliers India. “Notwithstanding unforeseen events, a stable economic outlook augurs well for Indian commercial real estate and office markets will continue to witness steady interest from domestic as well as foreign-origin occupiers.”