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In a significant move towards bolstering the Grade A office real estate in India, CapitaLand Investment (CLI) recently rolled out its new venture, CapitaLand India Growth Fund 2 (CIGF2). With an ambitious target fund size of 525 million Singapore dollars, the endeavour primarily aims to invest in top-tier business parks across the Indian subcontinent.
From the initial proceedings, CLI has managed to amass S$263 million (Rs 16.3 billion) by selling a 50% stake to an undisclosed global institution. Additionally, CLI is set to uphold its commitment to the fund by retaining a sponsor stake of 20%. Taking into account this equity contribution for the specified stake, the total equity pledged for the preliminary closing stands at an impressive S$368 million, equivalent to Rs 22.9 billion. This infusion is anticipated to pump an additional S$700 million into CLI's funds under management (FUM).
In line with its objectives, CIGF2 has already made a noteworthy investment. The fund purchased a 70% equity stake in the International Tech Park Chennai, Radial Road (ITPC-Radial Road) from CLI at a cost of S$95 million (Rs 5.9 billion). This transaction serves as the seed asset for the fund. While CLI has divested from the property, it remains at the helm of managing the ITPC-Radial Road asset.
In January this year, CapitaLand India Trust (CLINT) entered into an agreement with CLI and MIC to acquire their stake in Ascendas IT Park in Hinjewadi, Pune and purchased a 1 million square foot IT park in Bengaluru. In a recent interview with the press, the CEO of CpaitaLand Investment India spoke about the company’s plans to acquire 50 million square feet in the coming 3-4 years. CLINT plans to invest around 7-8 billion Singapore dollars in IT parks, logistics parks, data centres and more.
With its recent business park fund, CLI manifests a strong commitment to India's Grade A business spaces. Given the simultaneous growth of India's digital landscape and CLI's strategic investments, the future of office real estate in the nation looks promising.
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