Embassy Reit bets on acquisitions for growth, says CEO Amit Shetty

Embassy REIT eyes acquisitions, redevelopment, and GCC-led demand to drive growth, betting on strong leasing momentum and rental upside

Embassy Real Estate Investment Trust (Reit) believes acquisitions, its office assets and premium-to-market rentals

will boost growth. The Bengaluru-based company’s net operating income (NOI) grew 15 per cent to ₹3,760 crore in FY26, while gross asset value (GAV) reached ₹70,500 crore. Amit Shetty, chief executive officer of Embassy Reit, spoke with Prachi Pisal in Mumbai about his company and the real estate industry. Edited excerpts: 

Do you see any impact of geopolitical conflicts? 

There has been a little bit of a construction cost escalation, particularly in logistics. We always have had some contingencies of cost for this. On the ground, we haven’t seen any impact. Even last year, there were geopolitical conflicts. Yet, India saw the highest-ever leasing at about 83 million square feet (msf). In the first quarter of this year, we’ve already seen about 21 msf of leasing, up 10 per cent year-on-year. 

You have guided for double-digit distribution growth in FY27. What gives you confidence? 

The macro environment is well-positioned. Industry projections suggest gross leasing absorption of about 84-85 msf over the next two years, while supply is expected to be at 64-65 msf. That means vacancy compression and rental growth. On the organic side, nearly 50 per cent of our NOI growth is already built into the business. Additionally, we are evaluating accretive acquisitions and have a pipeline of 10-12 msf. 

What would those acquisitions amount to, in value terms? 

Acquisitions can be debt-funded or equity-funded, depending on the opportunity. We evaluate each opportunity individually. But our strategy is clear: focus on the top seven cities and acquire assets similar in quality to our current portfolio. 

Do you see any effect of artificial intelligence (AI) on leasing trends? 

Contrary to concerns, we are seeing global capability centres (GCCs) becoming more aggressive because they want to harness AI. They are hiring more people. More projects are coming into the country. More companies are entering India. We’re also seeing strong momentum from mid-market companies, particularly hiring talent in data science and AI. 

What about layoffs in the information technology (IT) industry and sluggish hiring? 

Most IT players in India have captive real estate. Even if their growth is muted, it doesn’t materially affect us. In terms of job losses, many of those people are getting absorbed by GCCs. India saw the highest-ever office leasing in 2025. So there is significant activity and churn but the talent is being reabsorbed. 

Could Indian office Reits diversify into alternative assets such as data centres or warehouses? 

Globally, Reits span multiple asset classes. India will also evolve in that direction. At Embassy,

we remain focused on offices. But if an occupier wants us to build data centre real estate, we are open. Hospitality is complementary to our office business. It improves the ecosystem and enhances rental values. 

Is office redevelopment on your radar? 

Yes, and it’s a big strategy for us. We were among the first Reits to actively pursue redevelopment. Karnataka’s floor area ratio norms have also improved from 3.25 to 5.2, significantly expanding redevelopment opportunities. Our parks are very large ecosystems — one is 125 acres, another 100 acres, and our Pune park is 65 acres — so redevelopment potential is substantial. In Mumbai, too, we would evaluate redevelopment opportunities if they are accretive. 

What’s your capex guidance for FY27? 

We spent about ₹1,500 crore in FY26. FY27 capex guidance is also around ₹1,500 crore. Overall, we have 6.2 msf under development with a total planned spend of ₹3,500 crore. We plan to deliver these developments in three years, largely across Bengaluru and Chennai. This will generate around ₹610 crore of NOI at about a 15 per cent yield on cost by FY30. We are also building two hotels with 518 keys, with an investment of ₹940 crore. These hotels will generate about ₹250 crore of NOI once stabilised. 

What is your deleveraging strategy? 

Net debt today is about ₹21,400 crore. Our net debt-to-ebitda is about 30 per cent. We want to bring that down to around 25-28 per cent. We have already started capital recycling. Last year, we sold an asset for about ₹530 crore and acquired another stronger asset. We are also evaluating divesting our hotel portfolio. If that happens, proceeds could be used for acquisitions and deleveraging. 

What is your gross asset value? 

Our gross asset value today is about ₹70,500 crore. We plan to acquire 10-12 msf of office assets. This will be in addition to our ongoing development pipeline.