CapitaLand Investment Limited (CLI) is launching CapitaLand India Growth Fund 2 (CIGF2) an initiative, with a value of S$525 million. The focus of this fund is on acquiring high-quality Grade A business parks in cities across India. CLIs involvement as a 20% sponsor reflects their strategy of minimizing asset ownership while also increasing their funds under management by around S$700 million. It’s worth mentioning that CIGF2s first investment will be securing a 70% equity stake, in the Radial Road International Tech Park located in Chennai.
Singapore’s CapitaLand Investment Limited (CLI) has unveiled the CapitaLand India Growth Fund 2 (CIGF2), a fresh venture aimed at propelling business park development in India’s prime locations. With an ambitious target size of S$525 million ($390 million), this new fund is geared to invest in top-tier Grade A business parks strategically situated across India’s gateway cities.
In a recent announcement, CLI shared that it has already secured a significant S$263 million (Rs 1,630 crore) from a prominent global institution, effectively securing a 50% stake in the fund’s inaugural closing. As part of its asset-light approach, CLI intends to uphold a 20% sponsor stake in the fund, a move that harmonizes with its overarching strategy to expand funds under management (FUM) while nurturing robust rapport with partners and investors.
The total equity commitment for the initial closing stands at S$368 million, inclusive of CLI’s equity contribution for the 20% stake. This calculated step is projected to augment CLI’s funds under management by approximately S$700 million, further amplifying the organization’s financial scope.
CIGF2 marks CLI’s second stride in the domain of business park development funds in India, following the triumphant closure and full commitment of the S$300 million Ascendas India Growth Programme back in 2015. Additionally, CLI boasts two logistics private funds in India, namely the Ascendas India Logistics Programme and CapitaLand Logistics Fund II, both wielding substantial fund sizes of S$400 million each.
As a pivotal move, CIGF2 has strategically acquired a substantial 70% equity stake in the International Tech Park Chennai, Radial Road (ITPC-Radial Road), an asset previously held by CLI. Facilitated through an investment of S$95 million (Rs 590 crore), this pivotal seed asset spans an expansive 2.6 million square feet and specializes in catering to the IT/ITeS sector. Comprising two blocks of top-tier Grade A office space, the project has already garnered active tenant interest and secured leasing pre-commitments. Following the divestment, CLI will continue to proficiently manage the ITPC-Radial Road asset.
Simon Treacy, the CEO of Private Equity Real Estate at CLI, affirmed the organization’s broader vision by stating, “In tandem with business parks, we identify promising prospects to channel investments into burgeoning new economy assets like data centers, logistics, and industrial properties in India via our dedicated private funds.”
