ICICI Securities has issued a buy rating on Knowledge Realty Trust with a target price of ₹130 in its research report dated September 08, 2026. According to the brokerage's analysis, the recommendation is based on the company's position as one of India's largest REITs with strong fundamentals and growth prospects. At the current market price of ₹112, the target implies a 16% upside potential for investors.
Knowledge Realty Trust owns and manages a high-quality office portfolio in India with a total leasable area of 46.5 million square feet as of June 2026. As reported by ICICI Securities, the REIT offers a healthy mix of scale, strong tenant quality and improving operating metrics, positioning it favorably in the commercial real estate sector. The portfolio is strategically located with 96% of gross asset value concentrated in Hyderabad, Mumbai and Bengaluru, while the current portfolio comprises 37.3 million sq ft completed area and 9.2 million sq ft under-construction.
A key investment rationale centers on improving occupancy metrics across the portfolio. According to ICICI Securities, KRT's committed occupancy stands at 93% while economic occupancy was 87% in June 2026 and 88% in July 2026. The REIT manager expects economic occupancy to cross 90% by March 2027 as large clients progressively ramp up their occupied space in a staggered manner. This improvement is expected to be primarily driven by the likely narrowing of the gap between committed occupancy and economic occupancy over FY27-28E, in addition to contractual and mark-to-market rental escalations.
ICICI Securities estimates KRT to deliver a 9% NOI CAGR over FY26-29E, driven by the improving occupancy gap and portfolio mark-to-market potential of 25%. At the current market price of ₹112, the REIT offers FY27/28/29E distribution yield of 6.2%/6.8%/7.3% respectively, representing an 8.7% DPU CAGR over FY26-29E. The brokerage's valuation assumes a 7% cap rate, 6% in-place rental escalation from FY26 onwards, and 10.5% WACC for its DCF-based approach.
The brokerage has valued the company at 1x FY27E NAV of ₹130 per unit, as reported in the research report. This valuation methodology reflects the company's current market position and growth prospects in the commercial real estate sector, supporting the bullish investment recommendation. The report assumes a 7% cap rate, 6% in-place rental escalation from FY26 onwards and 10.5% WACC for its valuation, with key risks identified as rising vacancies across assets and falling lease rentals.
