Embassy REIT profit drops 84% in Q2FY26 even as revenue rises 13%

Embassy REIT leased 1.5 million sq ft of office space across 20 deals in Q2FY26, including 1 msf of new leases, 0.4 msf of renewals, and 64,000 sq ft of pre-leases in Chennai, driving occupancy to 93%

Embassy Office Parks REIT on Wednesday reported a consolidated net profit of ₹232.18 crore for the second quarter of the financial year 2025–26 (Q2FY26), down 84 per cent from ₹1,530.36 crore in the same period last year. Sequentially, profit was up 49 per cent from ₹155.17 crore in the previous quarter.

 

The sharp fall in profit compared to last year was largely due to a one-off deferred tax credit of about ₹1,420 crore recorded in Q2FY25.

 

How did Embassy REIT perform on revenue and income?

Revenue from operations for Q2FY26 rose 13 per cent year-on-year (Y-o-Y) to ₹1,124 crore, while net operating income increased 15 per cent to ₹927 crore, indicating continued resilience in leasing activity and rent escalations across markets.

 

 

What was the distribution announced for the quarter?

The company declared a record quarterly distribution of ₹617 crore, or ₹6.51 per unit, up 12 per cent from a year ago. “The distribution of ₹6.51 per unit comprises ₹0.66 per unit as interest payment, ₹1.97 per unit as dividend, and the balance ₹3.88 per unit as repayment of debt,” the firm said in a BSE filing.

 

How strong was leasing activity during Q2FY26?

Operationally, Embassy REIT leased 1.5 million square feet (msf) of office space across 20 deals during the quarter, including 1 msf of new leases, 0.4 msf of renewals, and 64,000 square feet of pre-leases in Chennai. Portfolio occupancy rose to 93 per cent by value, with Bengaluru, Mumbai, and Chennai markets showing strong traction, the company said.

 

What is the management's outlook?

“We are pleased to report an outstanding quarter across our business — from strong leasing momentum to record distributions. We leased 1.5 msf this quarter to marquee names, occupancy climbed to 93 per cent, and we delivered our highest quarterly distributions since listing. As we scale our development pipeline and evaluate further growth opportunities, we remain steadfast in our commitment to build enduring value for all our stakeholders,” said Amit Shetty, chief executive officer of Embassy REIT.

 

What is Embassy REIT’s asset and funding position?

The REIT raised ₹2,000 crore from institutional investors through non-convertible debentures (NCDs) and ₹400 crore via commercial paper at around 6.44 per cent per annum. Based on an independent valuation as of September 2025, Embassy REIT’s gross asset value rose 8 per cent Y-o-Y to ₹63,980 crore, while its net asset value increased 7 per cent to ₹445.91 per unit, the company said.