Embassy Office Parks REIT Ltd. (NSE: EMBASSY) Q3 2026 Earnings Call dated Feb. 08, 2026
Corporate Participants:
Sakshi Garg — Head of Investor Relations
Abhishek Agarwal — Head of Investor Relations and Communications
Amit Shetty — Chief Operating Officer
Analysts:
Puneet — Analyst
Mohit Agrawal — Analyst
Yashas Gilganchi — Analyst
Pritesh Sheth — Analyst
Kunal Lakhan — Analyst
Vasudev — Analyst
Presentation:
operator
Foreign. Good morning everyone. A very warm welcome to all for Embassy REIT’s third quarter FY 2026 earnings conference call. Currently, all participants are in a listen only mode. Our speakers will address your questions during the question and answer session at the end. As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Mrs. Sakshi Garg, Head of Investor Relations for Embassy REITs. Ma’, am, you may begin.
Sakshi Garg — Head of Investor Relations
Thank you Ryan welcome to the third quarter FY2026 earnings call for Embassy REIT. Embassy REIT released its financial results for the quarter and nine months ended December 31, 2025 last Friday. As is our standard practice, we have placed our financial results, earnings presentation discussing our performance and a supplementary financial and operating data book in the Investors section of our website at www.emphaseofficeparks.com. as always, we would like to inform you that management may make certain comments on this call that one could deem forward looking statements. Please be advised that actual results may differ from these statements.
MBCD does not guarantee these statements or results and is not obliged to update them at any time. Specifically any financial guidance and forma information that provides all our management estimates based on certain assumptions and have not been subject to any audit, review or examination procedures. You’re cautioned not to place undecedent such information and they give you no assurance to be able to achieve the same. Joining me today are Amit Shetty, our CEO and Abhishek Agarwal, our cfo. We will start off with brief remarks on our business and financial performance and.
Amit Shetty — Chief Operating Officer
Then open the floor to over to thank you Sakshi Good morning and thank you all for joining us today. Quarter three was a standout quarter for us with a strong leasing and financial performance as well as a clear focus on accelerating growth by adding quality assets through organic and inorganic expansion. Some of the key highlights for the quarter are we announced the acquisition of Pinehurst in our prime asset Embassy Golf Links from a third party. We received an annotation for offer for Embassy Zenith, a landmark office star in central Bangalore which is leased to one of the world’s largest tech companies.
We have launched a new redevelopment project in Embassy Manita at an impressive 23% yield on cost and we are now looking to expand our hospitality portfolio with the new hotel in Pune. We also delivered a 0.4 million square feet fully leased new office tower in Chennai, a market which has seen a strong rebound and increased traction from some of the largest global companies and we Once again registered a double digit growth across all our key financial metrics and grew our NOI by 19% and our DPU by 10%. Let me take you through some of the details.
Let me start with an update on the Indian Office market on the back of a record closing quarter. The calendar year 2025 clocked the highest ever gross absorption of 18 million square feet and net absorption of 51 million square feet which is 8% and 14% up respectively. The GCC and the Flex operators were at the forefront of this demand, contributing to about 60% of the total leasing. Bangalore again outshined with the highest market share of about 27%. With vacancies tightening, rents have started to grow across key micro markets. For our portfolio market rents have gone up by 9% year on year with a 19% growth in Mumbai, 16% in Noida and a 7% in the Bangalore assets.
Amit Shetty — Chief Operating Officer
This has resulted in increasing the total mark to market potential of our portfolio to 11%, a 600 basis point jump just in the last three months. We see this as a positive momentum to continue for the Indian office with over 170 million square feet of absorption expected versus around 130 million square feet of new supply over the next two years. With this backdrop, let me delve deeper into our quarter three leasing performance. We leased 1.1 million square feet across 22 deals bringing our total YTD leasing to 4.6 million square feet. Our quarter three leasing included 0.8 million square feet of new leases signed at an impressive 17% re leasing spread, implying a 5% premium to market rents.
On an average, this was over and above the 9% year on year growth already seen in in the market rents of our portfolio assets demonstrating the superior quality of our portfolio and the strength of our leasing teams. With limited vacancies available in these properties, we believe that this rental growth momentum will continue, further solidifying the mark to market opportunities available in our portfolio. Our core Bangalore portfolio Contributed to over 2/3 of the total leasing and 3 out of our 5 properties in this city are now 100% occupied. We are also noting early green shoots in our Pune properties with an increase in leasing enquiries and around 0.5 million square feet of leases signed across our three assets in the last nine months.
Overall we maintained our portfolio occupancy of 90% by area, 94% by value, and three out of our five cities are at over 95% occupancy. Next on our portfolio development, we launched our third redevelopment project at Embassy Manita aimed at increasing the leasable area of E1 block from 0.2 million square feet to 0.8 million square feet through utilization of unutilized far. The project is highly attractive at an yield on cost of 23%. We continue to evaluate more such opportunities in Bangalore and and will update the market in due course. We’ve received occupancy certificate for 0.4 million square feet block 10 in Embassy Splendid Tech Zone in Chennai which is leased to a global healthcare company.
Amit Shetty — Chief Operating Officer
We expect to receive the occupancy certificate for another 0.6 million square feet block 4 in the same park by the end of this month. With this, our total development pipeline now stands at 7.6 million square feet which will result in an area increase of 19% organically with a total capacity sorry. With a total capital outlay of about 4000 crores, we expect these projects to add around 740 crores in stabilized NOI by FY2030. The 518 key Hilton hotels at Embassy Tech Village remain on track for October 26th delivery. We are also exploring a new 116 key mid scale hotel in Embassy Tech Zone in Pune.
Similar to our hospitality portfolio in Bangalore, this new hotel is envisaged as a strategic ancillary offering for our tenants in our park and the vicinity areas. Moving ahead to updates on our inorganic growth and capsule recycling, we have received an invitation to offer to acquire Embassy Zenit, a 0.4 million sq ft office tower located in CBD Bangalore. The building is fully leased to one of the world’s largest tech companies which can add meaningfully to our tenant roster. We will start our evaluation and will update the market as we progress. During the quarter we announced a third party acquisition of Pinehurst, a fully leased 0.3 million square feet office building in aim to consolidate our ownership in Embassy Golf Links.
The Transaction valued at 852 crores implies a NOI of 7.9% and aligns with our strategy of disciplined accretive growth. In addition, we continue to evaluate multiple third party acquisition opportunities available in the market. We also completed the divestment of 376,000 square feet of two strata owned blocks in Embassy Manita for a total consideration of 530 crores. In summary, we delivered another strong quarter to wrap up the calendar year. We’re happy to report that during the year we delivered a total return of 25%, significantly outperforming the Nifty’s 12% return and Nifty’s Realty’s 16% decline. Reinforcing the strong risk adjusted appeal of REIT asset class, we are determined to carry forward this benchmark and continue our growth trajectory to the benefit of our 125,000 plus investor base.
I will now hand over to Abhishek to present our financial updates.
Abhishek Agarwal — Head of Investor Relations and Communications
Thank you Amit and good morning everyone. Let me take you through the key financial highlights for the quarter. We delivered strong double digit year on year growth across our financial number and reported our highest ever revenue and NOI. We grew our revenue by 17% to Rs. 1,193 crores and NOI by 19% to Rs. 985 crores year on year. The increase was mainly driven by new lease up at high releasing spreads, contracted rent escalations and new buildings delivered during the period. Our hotel segment NOI grew by 13% year on year due to an occupancy uptick of 100 basis point to 60% as well as an ADR growth of 11%.
We declared distributions of rupees six hundred and thirteen crores or rupees six point four seven per unit for the quarter representing a 10% year on year growth. This increase was driven by an uptick in our NOI which was partially offset by net SD refunds and an increase in our interest costs. During the quarter we successfully raised rupees 400 crores through a commercial paper at an impressive effective rate of 6.44% per annum. Post this, our net debt stood at Rs. 20,631 crores as of December 25th implying a 32% leverage ratio at 7.29% average in place interest rate.
I want to highlight that we have successfully reduced our in place debt cost by 61 basis point in the last nine months through our active debt management. Lastly, on the forward financial outlook Based on our YTT performance, we remain on track to achieve our FY26 guidance. We continue to expect our NOI to be in the range of Rs. 3,589 to Rs. 3,811 crores and DPU to be in the range of Rupees 24.5 to Rs. 26 per unit at midpoint. This guidance implies a 13% growth in NOI and a 10% growth in DPU on a year on year basis.
With this, let’s move to Q and A please.
Questions and Answers:
operator
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use their headsets while asking a question. We would also request participants to restrict their questions to two per participant. If you have a follow up question, please rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Puneet from hsbc, please go ahead.
Puneet
Yeah, thank you so much and congratulations on good performance once again. My first question is with respect to the market rentals that you’ve disclosed in your presentation. Bulk of it, Embassy, ETV, FIFC 24, 7 have all gone up meaningfully in this quarter. Can you talk about two things? Whether is it this quarter phenomena or are you just recognizing it? And second, how different are these from your last leasing rentals?
Amit Shetty
Pritesh, you want to continue your next question as well, so we’ll take that together.
Puneet
Yeah. Secondly, on your hotel at Hingewadi, if you can talk a bit more about what is the capex you’re looking at and where will it really come up? And also lastly, how much did you spend during the quarter in terms of capex? That’s all.
Amit Shetty
Okay, so let me take the first question. The market rentals that you’re seeing, you know, just to give you a broader picture, the market saw about 82.6 million square feet of absorption and about 80 million square feet in the top seven cities of the country. Now what it did was the vacancy was declined, which was 21%, is now moved to 20% and thereby, you know, there’s an increased demand given the supply that came into the market was about 57 million square feet itself. If you see the net absorption that’s taken place in the market is about 14% and thereby across the country we are seeing tightening of the rental values.
Given this, we’ve seen particularly we’ve seen a 17% re leasing spread across our 0.8 million new leasing that we’ve done. And from a market potential we have now reassessed to 11% mark to market opportunity that we have seen with a 9% rental growth across all our portfolio. You know, some of the outliers being Mumbai, Mumbai, like we said, you know, is seen, you know, double digit rental growth. Noida has seen double digit rental growth as well. Right. With Bangalore being about 7%. And we believe that the Bangalore, given the market and the supply, I think in the coming days the Bangalore rents will also climb higher.
Now moving on to the next question, which is the hotel At Hinde Wadi we believe like we’ve always said to the market that we believe in building a larger business ecosystem. And this is again aimed at that. We’re Planning to build 116 key mid scale hotel in Hinjawadi in Embassy Tech zone with a capital outlay of about 45 crores.
Puneet
Okay, just a bit on the rental part again. So in your embassy Manita, the market rentals you claim is 105 rupees etv also 105 there. If you can suggest that whether you’ve been able to lease at higher rentals and this and what are those numbers and or are these are your rentals not just the market rentals.
Amit Shetty
See a. This is our rentals to start off with. And also you know we’ve actually been very conservative of what we’ve actually disclosed to the market and we’ve actually achieved high rentals as well beyond these rentals. But we just continue to see given that Manita is at now 94% occupied and of that vacancy of about 800,000 square feet which has H1 block which is actually about 375,000 square feet which is undergoing refurbishment. So effectively the vacancy that we have is about 500,000 square feet. So with this we believe that you know the rental rates will only move up given the expiries.
And also you know some of the new redevelopments that we are doing in Manita, we’re really excited for Manita right now.
Puneet
Understood. That’s very helpful. That’s all from my side. Thank you and all the best.
operator
Thank you. Thank you. We take the next question from the line of Mohit Agarwal from iifl. Please go ahead.
Mohit Agrawal
Good morning everyone and thanks for the opportunity. So I’m just continuing with the previous question on market rental growth. Particularly Mumbai has seen very strong reset. In your presentation you’ve mentioned that in Express Stars you’ve been able to get 26% M2M and a premium of 22% which means almost 400 rupees rental for Express Stars and similarly for Embassy. So can you explain what’s happening there? You’ve been able to get a meaningful premium to the market. Is it a trend? Are these small transactions or do you expect then you know the mark to market in these especially in Mumbai portfolio to continue to go up? Yeah, so that’s my first question.
I just you know and again on Pune as well, I think you mentioned about green shoots there. So what’s the outlook? What is the kind of. Is it something that you mentioned about the general tightness in on supply demand, is that driving it or is it something particular about the western part of Pune where you know, things are now looking up. So, comments on that?
Amit Shetty
Yeah, yeah, sure. So first let me take the Mumbai market. I think Mumbai from you know, overall market perspective given the infra development that’s have happened, given the coastal road, the Atal Setu and you know, a couple of other flyovers and also the metro lines. I think you know, there’s a meaningful demand in Mumbai. If you see Mumbai is the second largest city in terms of absorption. You know, having said that, Expresstars, where you know, which is located in South Bombay, given the coastal road is seen a large increase in the demand there itself. You know, and we believe that this demand will continue to grow.
And you know, if you see Mumbai as a city as well, given that even Embassy 247 has done extremely well, we believe that, you know, the continue to will see this uptick going forward. So that’s first moving on to the Pune market. Again like we mentioned Pune market. If you see for the last nine months we’ve actually done about 500,000 square feet of leasing and about 100,000 square feet of leasing is in Quadron itself. We’ve got meaningful inquiries. We’ve got a pipeline of about 400,000 square feet in Pune that we’ve already built up. The reason is that the metro is now finally in Hindevadi with the phase three trials of the metro.
While the government declared that March 26 is when the metro will be officially opened. But you know, even if you’re a little pessimistic and think that June 26th is is something which we are very confident that the metro will be operational given that we are seeing about 2.1 million square feet of RFPs in the Pune market. And also given the fact that the arbitrage of rent between the eastern side and the western side of Pune between 800 rupee market to a 50, 60 rupee market, we believe that a meaningful demand will now shift to Hingewadi given the Metro operationalization.
Mohit Agrawal
Okay, so any Pune portfolio occupancy targets that you have, like for Quadron, for.
Amit Shetty
Tech zone, for cubics, Pune is currently at 62% occupancy. Right. We would like to move that up. I would not like to comment on any forward looking statements here. But you know, like I said, There’s a 400,000 square feet pipeline which we are confident of converting. And in due course, you know, we’ll announce to the market as and when these trades happen.
Mohit Agrawal
Understood. Just one last clarification. This should mean that when your NAV is being, you know, revised next quarter, the fourth quarter, there should be a meaningful revision in that as well.
Amit Shetty
Absolutely. Absolutely. See the NAV obviously from a leasing occupancy perspective as well as the market, market mark to market opportunity as well. I think these two factors will be considered when we revise the next NAV in the next quarter.
Mohit Agrawal
And this could also mean that the quadron write off that you are taken by like that could again be revalued. Is that a possibility?
Abhishek Agarwal
This is Abhishek. So on the revaluation, what will happen is once we see that actually leasing has happened and it’s a reversal, that is when we’ll want to take the reversal of that impairment.
Mohit Agrawal
Okay, understood. Thank you so much. Those were my questions. All the best.
operator
Thank you. Thank you. We take the next question from the line of Yasha Gilganji from Bob Capital Markets Ltd. Please go ahead.
Yashas Gilganchi
Good morning. Thank you for taking my question. Releasing spreads at around 17% were significantly lower than what was achieved over the past five years. Now with Bangalore driving leasing activity and your portfolio over there operating at 95% occupancy, please help me understand what’s keeping the spreads under pressure. And my second question would be for the developments that are planned to come online this calendar year, the ones especially at the Manita and Splendid Tech zone, what is the NOI contribution you’re expecting to flow through over FY27 and how long would these developments take to stabilize once they start contributing to revenue?
Amit Shetty
You want to continue your next question as well?
Yashas Gilganchi
All right, that was my second question. But I do have another question. So it is how is the approximately 38 billion of capex that is expected to be spent through FY28 to be funded and how do you think LTV is likely to evolve over the period?
Amit Shetty
So Abhishek, you want to take the second and the third question and I’ll take the first question later.
Abhishek Agarwal
Yeah. So if you look at the total 2 million square feet that we will be delivering, you can expect NOI of almost around 100 crores in FY27. And on the third question, see our strategy is to fund all the CapEx through debt only. Now if you look at the LTV position which we are expecting in the next one to two years, we are expecting that it will go down because of two reasons. One, the GAV today doesn’t factor the increase because of the deliveries of this project. Once this project gets delivered, the GAV will also increase and hence we expect it see in the long term we expect the LTV to be around 30%.
Yashas Gilganchi
Just one clarification here. Like when do you think the projects are going to stabilize Once they start contributing rent money times then the tech zone, like how many months approximately.
Abhishek Agarwal
See after the deliveries each of these we have given in the sd. So once the delivery happens after this, let’s say you can take six months for them to start generating the rent.
Yashas Gilganchi
Understood.
Amit Shetty
Also on your first question, my request to the market is that you know, please don’t see quarter on quarter trends of leasing spreads. My request is to see the mark to market putting that is there in the in the portfolio organically.
Yashas Gilganchi
Okay, understood. Thank you very much.
operator
Thank you. We take the next question from the line of Pritesh Sheth from Access Capital. Please go ahead.
Pritesh Sheth
Yeah, good morning and thanks for taking my questions. First is on the inorganic growth that we have started seeing emerging now. So between these third party opportunities and sponsors assets which keeps on getting offered, what kind of opportunity we are looking at over next three, four years in terms of our portfolio addition, are there still those third party owned areas? If you can quantify that overall. And once where we have a ROFO on those third party areas and other sponsor assets which are completed and might not be offered but just broader sense on how the sponsor portfolio now stands in terms of completed portfolio.
And second question on the interest rates with this now bank channel getting open, how do you see, you know, interest rates trending forward? Will there be a meaningful downward shift in terms of interest cost or. We are already at 7.3 so already pretty optimized on that front. So yeah, those would be my two questions.
Amit Shetty
Let me take the first question. This is Amit here in terms of inorganic growth, third party acquisition as well as sponsor acquisition. While we’ve always maintained this, we are continuously evaluating the marketplace to look at opportunities that are actually accretive, which have similar asset quality, which match our portfolio. And we want to be in the top six cities. So having said that, the team is building a strong pipeline on the third party acquisitions. With respect to the sponsor assets, we have two ROFO assets. One is Embassy Zenith and the other one is Embassy Concord in Whitefield.
So these are the two assets that we are currently evaluating and when we are ready we will come back to the market. But having said that, we are also planning to do an analyst day which will give us which will outlay the entire plan that we have in terms of acquisition. Both from a third party acquisition as well as from the sponsor sponsor assets and Sakshi will come back shortly to the market.
Abhishek Agarwal
So on your second question, Pritesh, if you look at the interest rate, what’s happening is it’s tightening up in the market. We are currently around 7.29, 7.3%. Now we think this is almost the bottom where we are there can be, I mean you know, better there can be max one rate cut which can come in. So hence what we are preparing is we are going for more longer term debt and that to fixed rate and hence you see our debt book is around 60% fixed. Now what this RBI revised proposal can do is it can allow us to get more and more longer term debt at trust level.
Because earlier we were only dependent on the capital market for NCDs. Now banks can also participate in debt and banks, you know, can do longer term debts. What it will do is there will be more liquidity in our debentures, there will be more participation in our debentures and we can see, see some rate reducing. But I don’t think that it can be meaningful from here on.
Pritesh Sheth
Got it, got it. And just on the first one while obviously we can wait till the analyst day but these third party area owned by, I mean third party owners in our assets already in the portfolio. Can you quantify some number to that? Obviously you know, we won’t extrapolate it that everything will be offered to us but just trying to understand, you know, how the portfolio stands, you know, between what we own and what third party owns.
Amit Shetty
So I mean, I mean you’re actually driving me to give you forward looking statements. You know, probably we can pick this up separately, you know, no worries.
Pritesh Sheth
Thank you. Okay, that’s it from my side. All the best.
operator
Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star. And one, we take the next question from the line of Kunal Lakhan from clsa. Please go ahead.
Kunal Lakhan
Yeah, hi, thanks for taking my question. My first question is more to do on the, it’s a little bit generic side in terms of like you know, some of these MNCs have been announcing these layoffs, you know, just as recent as Amazon announcing their shutting down of their AWS business last couple of weeks. Just trying to understand what are you hearing incrementally from your tenants, especially gccs in terms of firstly the roadmap for the next three to five years. Because some of these leases they’re signing are really long term in nature. So just trying to understand what kind of outlook they have or roadmap they have in terms of job creation and so to speak.
Like you know, office demand for the next three to five years. Yeah, that’s, that’ll be my first question.
Amit Shetty
You want to take, you want to talk about your second question as well and then we’ll take both together.
Kunal Lakhan
Yeah, okay. My second question was more so, more so to do with, you know, your, when you look at your, you know, just a breakdown of your distribution, right. The reconciliation from the ndcf from SPVS to the NDCF at the REIT level there’s a big dent because of the interest cost. And if you look at your overall debt levels have gone up by about 10 odd percent, 10 15% maybe. But your debt interest cost has gone up by 33% and incrementally. When you look at your capex also spoke about 4000 crores of incremental capex and mostly that will be funded by debt.
When do you see this trend kind of reversing where you are? SPV and DCF is growing at about 18, 19% but DPU is getting dragged because of this interest cost. Where do you see that trend reversing or DPU growth to be in line with your NDCF at the REIT level or SPB level growth?
Amit Shetty
Let me take the first question and I’ll hand over to Abhishek for your second question. From an overall market perspective, like I mentioned, the market’s actually been robust. And what we predict for the next two years by the industry analyst or the IPCS is that the markets will outperform this calendar year as well. So the expected absorption is about 80 to 83 million square feet for the next two years. Having said that, what we are seeing is while there are cases of layoffs here and there, that is very business specific. When businesses are migrating from one process or one technology to another technology, there will be some layoffs, there will be some productivity recalibration.
But having said that, what we are actually seeing in the market is that given the fact that India has the largest or the second largest AI talent program pool and the largest data science pool, we’re seeing a large number of projects of the existing occupiers also moving in this direction and then therefore they’re doing a lot more hiring in these domains. Now the second trend that we’re clearly seeing is a lot of mid tier companies from the us, Australia as well as Europe are actually coming down into India. And a case in point is that we have about 18.5 million square feet of RFPS in the market floating, which we believe that, you know, given that, you know, the US has just come out of from a holiday season and you know, there will be more RFPs, meaningful RFPs that will start floating in the market.
Given this kind of traction, given the mid tier GCC is coming in. You know, know we’re doing a lot of new leasing inquiries, inspections. Traction in the market’s been really high. So you know, we feel that for the next two, three years, you know, the market will see increased leasing velocity.
Abhishek Agarwal
Just to follow up on that, Amit, I mean, do you see that the demand that we’re seeing currently or even FY 2425 as a, a function of like, you know, the kind of hiring that, that the tech sector did between 2020 and 2025, almost like 1.2 million square feet, 1.2 million employees added during that time. And obviously like during COVID times we saw like none of these guys signed up new spaces because physical attendance was low. Do you think that was a pent up effect of that hiring that happened between that time and you know, today we are seeing that residual pent up effect playing out, but you know, incrementally.
Incrementally, like you know, for, for us to sustain this demand going forward, we have to depend on new job creation that would happen over the next few years.
Amit Shetty
Yeah. So if you see the entire, entire leasing, if you break it down, see the pent up demand, you know, that kind of got a little bit consumed is through the ITS players only. Right. So it’s the tcs, Wipros and you know, Cognis, those kind of guys who actually meaningfully came out into the market. But having said that, a lot of other guys like Accenture, Capgemini have still not come into the market to, you know, to consume that pent up demand. Now if you see the leasing itself, 65% of our leasing is actually GCCS. Right.
20% of leasing plus, you know, is come from co working guys. Now the ITS actually is a very small fraction, but some of these names that I’ve taken will continue to elevate that leasing from an ITS sector as well. So that’s why we’re very confident about this 80 million growing to about 80, 85 million square feet over the next two years.
Kunal Lakhan
Sure. Understood.
Amit Shetty
So Kunal, on your second question, my request would be to look at the total interest at SPV and REIT level together. Because we have a choice to take the loans at SPV or take the Loans at REIT level and push it down to spv. It depends on the interest rate. I mean if we are getting lower interest rate in NCDS we go for REIT loan. So all of those things are there into play. Now if you look at the trend, what’s going to happen to our interest cost is and what is actually happening to our interest cost is when we are delivering, when we are constructing some assets, the interest is getting capitalized and it doesn’t hit the ndcf.
Now once we deliver the time we get the oc, the interest starts hitting the ndcf. But the income only starts getting generated after a gap of six months and hence there is a temporary gap. Now this gap will continue for some time because of all the deliveries that we are doing. And every year we have plans to deliver some building or the other. So this gap will continue till the time all these deliveries are finished. Let’s say three to four years. And post that only this you can see the interest rate doesn’t go up much commensurate to the income.
Also in this nine months if you see we have delivered 1.3 million square feet so the interest should have gone, interest cost should have gone even higher but it was not that high because of the interest saving because of the interest rate which went down 61 basis point in the last nine months. And hence you see that it is also in line with the guidance that we had given.
Kunal Lakhan
All right, yeah, sure, understood. Thank you and all the best.
Amit Shetty
Thank you.
operator
Thank you. We take the next question from the line of Vasudev from Nuwama. Please go ahead.
Vasudev
Yeah, thank you for the opportunity. My first question is on the new. MAT provisions which are announced in the budget. So is there any impact of that on us? And going ahead what kind of cash tax rate should we look at? And also the second question is on the SEC conversion. So how much have we converted till Q3? How much is still in process? And if you can help me with. The occupancies in the SEC and the non SEC portfolio.
Amit Shetty
Yeah, so if I have to take the first one. See this new MAT provision is still a proposal and we’ll wait to see whether it becomes and act in the same form because there are a lot of representations which the industry is doing. However, having said that, what we see is that for the near future there is not much impact on the NDCF because we were any which way is expecting these credits to be utilized after five, six years. And we have always guided that our tax percentage to revenue is around 5% now, which can go up to 6%.
So we think that for the near future it will be still in that zip code only on the second one. If you look at the SEC conversion, we have been able to. I mean, till date, we have been able to convert almost 8.6 million square feet. And one portion, which is parcel six, is still under construction. So if you strip that out, then we are at 84, 85% occupancy in this converted space. If you look at the total SEC space, I mean, out of the total vacancy, 3.77 is in SCZ and only 0.7 is non SCZ vacant space.
So that’s about it.
Abhishek Agarwal
And underway, we have about 3 million square feet of, you know, SEZ that we are trying to convert into non SEZ both through demarcation and denotification routes.
Vasudev
Yes, that was helpful. Thank you.
Amit Shetty
Thank you.
operator
Thank you, ladies and gentlemen. As there are no further questions, we conclude the question and answer session on behalf of Embassy reap. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.
Amit Shetty
All right, guys.