CapitaLand India Trust to invest Rs 1,940 crore to build data centre project

15 Dec 2022 CW Team

To build its third data center in India, CapitaLand India Trust Management Pte Ltd, the trustee-manager of CapitaLand India Trust (CLINT), is purchasing a 4.01-acre freehold site in Ambattur, Chennai for Rs 838.2 million.

"CLINT will invest an estimated total amount of Rs 19.4 billion (about Singapore dollar 328.8 million) to acquire the site and develop a state-of-the-art data centre in phases over the next four to five years," a company statement said.

Large local enterprise clients as well as international technological behemoths and cloud service providers will be among the data centre's 55 megawatts (MW) worth of clients.

By December 2022, the site acquisition is anticipated to be finished. The data centre is expected to be finished by the end of 2025.

Sanjeev Dasgupta, Chief Executive Officer of CLINT, said: "With this latest acquisition, CLINT will have a presence in India's key data centre markets -- Navi Mumbai, Hyderabad and Chennai -- and we are also planning to develop a fourth data centre in Bengaluru."

"This will allow us to expand in the resilient and highly scalable data centre asset class, diversify our data centre portfolio geographically, and enable us to better serve our customers across the country," he said.

India's data consumption and demand for information technology (IT) solutions are rapidly growing, but the country has one of the lowest data center densities in the world, according to Dasgupta.

"We will be developing a data centre in Navi Mumbai and other two data centres within our International Tech Parks in Bangalore and Hyderabad. Our data centres will further enhance the quality of CLINT's portfolio and deliver sustainable returns to unitholders," he said.

According to Patrick Boocock, CEO of CapitaLand Investment's Private Equity Alternative Assets, the company has noticed an increase in investor interest in the digital infrastructure market and is actively pursuing a pipeline of data center investments across Asia.

"India is a particularly interesting market; in the last five years, USD 14 billion has been invested in India's data centre sector, and the amount is expected to cross USD 20 billion by 2025," he said.

CapitaLand's strong core competencies in data centre design, development and operations will "enable us to seize opportunities in the country as we build our new economy portfolio globally".

Chennai
Chennai is India's second largest data center co-location market, with an IT load capacity of 88 MW (roughly 12% of total capacity in India).

Surajit Chatterjee, Managing Director, Data Centre, India, CapitaLand Investment, said: "The acquisition site is in a prime data centre location in Ambattur, close to sea cable landing stations, reliable power supply and has a well-developed infrastructure."

He said that once completed, the data center will be able to accommodate roughly 4,900 racks and run at an effective power utilization efficiency of about 1.45.

The four data centers will eventually produce 251 MW of power altogether.

Acquisition to increase CLINT's portfolio size
The development of the Chennai data center will bring CLINT's entire portfolio size (including committed investment pipeline) up from 25.3 million square feet to 25.7 million square feet, an increase of 1.7%.

The first Indian property trust in Asia, CLINT, formerly known as Ascendas India Trust (a-iTrust), was launched on the Singapore Exchange Securities Trading Limited (SGX-ST) in August 2007.

Its main goal is to acquire income-producing real estate in India that is mostly used as office space. For the purpose of using the assets as office space, CLINT may also build and buy land or unfinished developments, with the intention of owning the premises until they are finished.

The amount of money under control at CLINT was 2.5 billion Singapore dollars.

With a total completed floor area of 15.5 million square feet distributed across Bengaluru, Chennai, Hyderabad, Pune, and Mumbai, its portfolio includes eight top-tier IT business parks, one logistics park, one industrial site, and one data center development in India.