Singapore's CapitaLand Investment Ltd said Thursday it is raising a new fund to develop business parks in India and has brought on board a global institution for the vehicle's first closing.
The CapitaLand India Growth Fund 2 aims to mop up S$525 million ($390 million), the real estate investment manager said.
The company said it has secured S$263 million in funding from a global institution for a 50% stake in the fund's first closing. It didn't disclose the investor's name.
CapitaLand said it intends to maintain a 20% stake in the fund as the sponsor. Including its contribution for the 20% stake, total equity commitment for the first closing is S$368 million (Rs 2,290 crore), it said.
This is expected to add about S$700 million ($520 million) to the company's funds under management (FUM), it said.
The fund will invest in Grade A business parks in prime locations across gateway cities in India. It has bought a 70% stake in International Tech Park Chennai from CapitaLand for S$95 million (Rs 590 crore) as its seed asset, the company said.
“India is a core market for CLI where our business parks enjoy high occupancy, fuelled by demand from multinational corporations and local companies from the IT/IT-enabled services industry,” said Sanjeev Dasgupta, chief executive at CapitaLand Investment India.
On CapitaLand’s plans to invest in Chennai’s International Tech Park, he added that the office and business park sector is an established and resilient asset class in India, providing stable recurring income to investors through long-term leases with large corporate tenants.
“Besides business parks, we see opportunities to invest in new economy assets such as data centres, logistics and industrial properties in India through our private funds,” said Simon Treacy, who heads private equity real estate at CapitaLand.
The new investment vehicle follows the S$300-million Ascendas India Growth Programme, which had set out to raise about S$600 million and had onboarded Singapore’s sovereign wealth fund GIC as a principal investor. Though closed and committed in 2015, the investment vehicle became part of CapitaLand Group’s portfolio after it acquired Ascendas-Sinbridge in an $8 billion deal in 2019.
Last year, the Mint newspaper reported that the Singapore-based real estate investor was looking to raise a Rs 2,000-2,500-crore India-focused fund to invest in office projects. With CapitaLand as the sponsor of the fund, the entity, with other private or institutional investors, will invest in office projects over a period of five-seven years.
Apart from office space-focused funds, CapitaLand also manages two logistics-focused funds in India, the Ascendas India Logistics Programme and CapitaLand Logistics Fund II, with a fund size of S$400 (about $297 million) million each.
The latter was launched in 2021 to invest in the logistics assets operational in key warehousing and manufacturing hubs in six major cities Ahmedabad, Bangalore, Chennai, Mumbai, National Capital Region (NCR) and Pune.
Currently, the Singapore-based investor has assets valued at about S$4 billion in India, with 20 IT and business parks, industrial, logistics, lodging and data centre assets across seven cities – Bangalore, Chennai, Goa, Gurgaon, Hyderabad, Mumbai and Pune.
