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CapitaLand launches second S$400 million logistics private fund in India

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CapitaLand has launched its second logistics private fund of S$400 million (INR 22.5 billion[1]) to expand in India’s logistics sector, one of the largest globally[2]. CapitaLand India Logistics Fund II will invest in the development of logistics assets in key warehousing and manufacturing hubs in six major cities – Ahmedabad, Bangalore, Chennai, Mumbai, National Capital Region (NCR), and Pune, as well as in emerging markets such as Coimbatore, Guwahati, Jaipur, Kolkata and Lucknow. CapitaLand India Logistics Fund II will grow CapitaLand’s current total Funds Under Management (FUM)[3] of S$79.2 billion[4] across over 20 private funds and six listed trusts, further reinforcing CapitaLand’s position as one of the leading real estate fund managers in the world[5] .

CapitaLand India Logistics Fund II follows the successful deployment of CapitaLand’s first logistics private fund, the S$400 million Ascendas India Logistics Programme[6] launched in 2018, to develop six logistics and industrial projects in Bangalore, Chennai, NCR, and Pune. The six projects have a total development potential of over 12 million sq ft of space. Two of the projects are operational with 2.8 million sq ft of space that has been leased. Ascendas-Firstspace [7] manages the assets of Ascendas India Logistics Programme and CapitaLand India Logistics Fund II. Please see Annex for more information on the six logistics assets under Ascendas India Logistics Programme.

Mr Jonathan Yap, President, CapitaLand Financial, CapitaLand Group, who oversees CapitaLand’s business in India, said: “The launch of CapitaLand’s second logistics fund in India is in line with the Group’s strategy to expand our fund management business to generate recurring Fee Related Earnings (FRE)[8] and grow the Group’s assets under management (AUM)[9] in a capital efficient way. In 1Q 2021, CapitaLand’s FRE increased by more than 30% year-on-year. Our target is to grow CapitaLand’s FUM to at least S$100 billion by 2024. We will do so by raising new funds across geographies and asset classes, as well as supporting the growth of our existing REITs, business trusts and private funds. We will continue to leverage CapitaLand’s real estate investment and fund management capabilities to grow our funds in our core markets of Singapore, China, India and Vietnam as well as our focus markets such as Australia, USA and Europe where there is strong investor demand.”

Mr Yap added: “Expanding in new economy asset classes such as logistics will further diversify and strengthen the resilience of CapitaLand’s portfolio. We see significant opportunities in India’s logistics sector. The sector has continued to thrive especially during the pandemic driven by the growing e-commerce and consumerism, generating strong demand for our quality warehouse and distribution facilities. We will continue to invest in India’s logistics sector through our private funds and our business trust, Ascendas India Trust which currently has seven warehouses located at the Arshiya Free Trade Warehousing Zone in Navi Mumbai. In total, CapitaLand targets to develop a logistics portfolio of 20 to 25 million sq ft of space in India by 2025. With our second logistics fund, we will further extend our logistics presence in India and deliver more quality logistics facilities, while generating attractive returns for our investors.”

Mr Aloke Bhuniya, Chief Executive Officer of Ascendas-Firstspace, said: “Ascendas-Firstspace has gone from strength to strength since its launch in 2017. Currently we have six development assets across India and fully committed our first fund. The steady growth demonstrates our investment and asset management capabilities as well as our customer centric focus. The second fund will significantly increase our geographical footprint. With the growing penetration of e-commerce, modernisation of supply chain management and increased focus on manufacturing, we are well positioned to tap on the rising demand for high-quality logistics and industrial space in India.”

CapitaLand Group’s total logistics AUM is about S$3.9 billion[10]. The logistics market in India is forecasted to expand at a compound annual growth rate of 10.5% between 2019 and 2025[11] .

CapitaLand’s presence in India
In October 2019, CapitaLand announced that it aims to more than double its AUM in India to S$7 billion by 2024. CapitaLand has deep expertise in India across the full real estate value chain – from owning, developing and managing properties to fund management through Ascendas India Trust (a-iTrust) and private funds.

The Group has a strong presence in India with a portfolio of over 20 business and IT parks, industrial, lodging, and logistics properties, as well as a data centre campus across seven cities – Bangalore, Chennai, Goa, Gurgaon, Hyderabad, Mumbai and Pune. 80% of the portfolio is under a-iTrust and two private funds – Ascendas India Growth Programme[12] and Ascendas India Logistics Programme, and 20% is under its balance sheet.

CapitaLand is a key contributor to India’s IT industry development, having pioneered the renowned International Tech Park Bangalore in 1994. As a sustainable company, CapitaLand has adopted various measures to reduce its carbon footprint and currently has 29 green buildings[13] within its properties in India.

Notes:
[1] Based on exchange rate S$1 = INR 56.25.

[2] ‘Reimagining India’s supply chain: A bold vision for 2030’ report: Arthur D Little and the Confederation of India Industry.

[3] Refers to the share of total assets under CapitaLand Investment’s listed funds and unlisted funds (private funds and/or investment vehicles (including but not limited to programmes, joint ventures and co-investments managed by the Group from time to time)).

[4] As at 31 March 2021.

[5] ANREV/INREV/NCREIF Fund Manager Survey 2021.

[6] The S$400 million Ascendas India Logistics Programme was launched in 2018.

[7] Ascendas-Firstspace was established in 2017 to deliver state-of-the-art logistics and industrial facilities across major warehousing and manufacturing hubs in India.

[8] Refers to fund management and asset management related fee revenue from CapitaLand Investment’s listed funds and unlisted funds (private funds and/or investment vehicles (including but not limited to programmes, joint ventures and co-investments managed by the Group from time to time)).

[9] Refers to the total value of real estate managed by CapitaLand Group entities stated at 100% of property carrying value.

[10] As at 1 July 2021

[11] Indian Logistics Industry Outlook, 2020.

[12] The S$400 million (INR 15 billion) Ascendas India Growth Programme was launched in 2013 with GIC as the principal investor. The programme invests in greenfield and brownfield office developments in India including their complementary uses such as residential, retail and hospitality.

[13] 12 India Green Building Council and 17 US Green Building Council LEED certifications.

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