- Bagmane Prime Office REIT received an Add rating from Kotak Institutional Equities
- Kotak values Bagmane REIT at Rs 118, above its current price of Rs 110
- Key risks include occupancy decline, tenant exits, and geographic concentration in Bengaluru
Bagmane Prime Office REIT has received an Add rating from Kotak Institutional Equities, which initiated coverage on the recently listed office REIT with a fair value of Rs 118, versus the current market price of around Rs 110.
Kotak's thesis centres on Bagmane's portfolio of grade-A office assets in Bengaluru, strong occupancy and the growth potential from under-construction properties. The brokerage expects 12.6% CAGR in net operating income (NOI) between FY26 and FY30, supported by new assets coming on stream.
Kotak expects revenue to grow at around 13.6% CAGR from Rs 26 billion in FY26 to Rs 43.5 billion in FY30, while NOI is estimated to rise at 12.6% CAGR to about Rs 37 billion over the same period.
Growth Outlook
The growth opportunity is linked partly to the continued expansion of global capability centres (GCCs) in India. Kotak expects GCC demand to remain a key driver for commercial office absorption, potentially supporting rental growth and occupancy across Bengaluru's established office markets.
Bagmane's concentration in Bengaluru's Outer Ring Road (ORR) and SBD micro-markets is also a key part of the investment case. The REIT counts global tenants including Google, Amazon and Nvidia, which Kotak says supports the resilience of its tenant base.
However, the brokerage flagged risks around occupancy and geographic concentration. A decline in occupancy, lease expiries leading to tenant exits or non-renewals, and the concentration of the portfolio in two Bengaluru micro-markets could affect growth. Additional capex requirements arising from non-renewal of BTS, or build-to-suit, offices are another risk.
Bagmane REIT's portfolio spans 19.6 million sq ft of total leasable area across six assets, including 16.6 million sq ft of completed operational office space, according to the brokerage. The REIT also has around 3 million sq ft of office space under construction or in the development pipeline, along with hotel and solar assets. The company reports 98.7% committed occupancy as of June 30, 2026.
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