CapitaLand to raise $2-3 billion in India-focused office funds

August 08, 2022 C.W. Team

According to a senior corporate executive, CapitaLand Investment India, a subsidiary of CapitaLand Investment Ltd. of Singapore, wants to launch a $2-3 billion India-focused fund next year to invest in office projects.

It would be a private fund sponsored by CapitaLand and other private or institutional investors that would invest in office buildings over a period of five to seven years. “The impulse on India has become higher for several reasons.” The country has been counter-cyclical and over the past two years the strongest growth in the IT sector has occurred. Companies have massively increased their workforce. demand for office space, but supply is still limited,” said Gauri Shankar Nagabhushanam, CEO, India Business Parks, CapitaLand Investment.

CapitaLand India offers numerous business parks in six locations, as well as warehouses and data centers, totaling 25-26 million square feet across the country.

“In two to three years, the plan is to double the portfolio to 40-50 million square feet, and 80% of that would be business parks,” Nagabhushanam said.

The company acquires assets through three vertical markets: its proprietary book, the private fund platform, which includes development assets and brownfields, and Ascendas India Trust.

“It is easier to acquire developed assets, but there is a shortage of good quality assets. Thus, we will continue to develop a large part of our portfolio, through greenfield developments and forward purchase agreements,” he added.

According to Nagabhushanam, tenant occupancy is currently around 90%, with rent collections at 98-99%.

“Vacancies increased in late 2020-early 2021. But future business growth plans have widened and demand for office space has increased. In Bangalore, physical occupancy of our offices is 55-60% and should be back to normal by the end of the year. However, large IT companies seem to be struggling to bring employees back to offices,” he said.

The most recent fund launched in India was the CapitaLand India Logistic Fund II, which invested in warehousing and manufacturing centers in six cities – Ahmedabad, Bengaluru, Chennai, Mumbai, the National Capital Region (NCR) and Pune – as well as emerging markets like Coimbatore, Guwahati, Jaipur, Kolkata and Lucknow. The funds are currently being used.

See also:
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Jose C. Birney