CapitaLand to raise $2 billion to $3 billion India-focused office fund

08 Aug 2022 CW Team

This would be a private fund sponsored by CapitaLand and other private or institutional investors that would invest in office buildings over a five to seven-year period. “The impetus on India has become higher for a couple of reasons." The country has been counter-cyclical and in the last two years, the biggest growth in the IT sector has happened. Companies have added massively to their headcount. There is huge demand for office space, but the supply is still constrained, "Gauri Shankar Nagabhushanam, CEO, India Business Parks, CapitaLand Investment, said.

CapitaLand India offers numerous business parks in six locations, as well as warehousing and data centres, 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 sq ft, and 80% of it would be business parks,” Nagabhushanam said.

The company acquires assets through three verticals: its proprietary book, the private fund platform, which comprises development and brownfield assets, and the Ascendas India Trust.

“It is easier to acquire developed assets, but there is a dearth of good quality assets. So, 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 at around 90%, with rent collections at 98-99%.

“Vacancies did increase in late 2020-early 2021. But the future growth plans of companies have expanded and the demand for office space has increased. In Bengaluru, physical occupancy in our office premises is at 55-60%, and should be back to normal by year-end. However, large IT companies seem to have a challenge in bringing 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 hubs in six cities—Ahmedabad, Bengaluru, Chennai, Mumbai, National Capital Region (NCR), and Pune—as well as emerging markets like Coimbatore, Guwahati, Jaipur, Kolkata, and Lucknow. The funds are currently being used.

CapitaLand India; National Capital Region (NCR),Greenfield developments

According to a top corporate executive, CapitaLand Investment India, a subsidiary of Singapore's CapitaLand Investment Ltd., wants to launch a $2 billion to $3 billion India-focused fund next year to invest in office projects. This would be a private fund sponsored by CapitaLand and other private or institutional investors that would invest in office buildings over a five to seven-year period. “The impetus on India has become higher for a couple of reasons. The country has been counter-cyclical and in the last two years, the biggest growth in the IT sector has happened. Companies have added massively to their headcount. There is huge demand for office space, but the supply is still constrained, Gauri Shankar Nagabhushanam, CEO, India Business Parks, CapitaLand Investment, said. CapitaLand India offers numerous business parks in six locations, as well as warehousing and data centres, 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 sq ft, and 80% of it would be business parks,” Nagabhushanam said. The company acquires assets through three verticals: its proprietary book, the private fund platform, which comprises development and brownfield assets, and the Ascendas India Trust. “It is easier to acquire developed assets, but there is a dearth of good quality assets. So, 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 at around 90%, with rent collections at 98-99%. “Vacancies did increase in late 2020-early 2021. But the future growth plans of companies have expanded and the demand for office space has increased. In Bengaluru, physical occupancy in our office premises is at 55-60%, and should be back to normal by year-end. However, large IT companies seem to have a challenge in bringing 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 hubs in six cities—Ahmedabad, Bengaluru, Chennai, Mumbai, 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: At Rs 23,400 crore, Mumbai captures 40 per cent of PE investments into office assets in India Welspun Group Promoters acquires majority stake in One Industrial Spaces