MUMBAI – Singapore’s CapitaLand Investment (CLI) is planning to more than double its holdings in India by 2028, capitalising on growing global investor interest in the country while diversifying its global portfolio of assets it manages.

CLI, the investment management arm of one of Asia’s largest diversified real estate groups, CapitaLand Group, plans to increase India’s share in its portfolio, which now accounts for 8 per cent. 

India will be a focus in its plans to reach its target of expanding funds under its management to $200 billion globally in the next four years, from about $100 billion. This entails more than doubling its funds under management in the country, which stood at $7.4 billion on June 30, 2024, by 2028.

This is in line with CapitaLand’s strategy to grow its non-China investments. China currently accounts for 31 per cent of its global portfolio.

This also comes at a time when Singapore is looking to burnish its position as one of India’s top foreign investors and global firms are looking to expand their presence in the South Asian country, spurred by America’s friend-shoring trade policies.

“As a Singapore company, we are conduits for global companies to find their place in India,” Mr Andrew Lim, CLI group chief operating officer, told The Straits Times.

“This is because we have a cross-border sales and marketing team that specialises in building relationships with multinational companies and global manufacturers, so we are part of decisions on where to place offices and factories on multiple levels,” he said.

He added that CapitaLand also has “cross-selling capabilities” across countries and Indian cities it has a presence in.

Data centre strategy

CLI has been in India for 30 years under several names and forms – earlier as Ascendas and Ascendas Singbridge. The Singapore company manages CapitaLand Investment India and CapitaLand India Trust, the largest India-focused property trust listed in Singapore, as well as private funds.

CLI today has $7.4 billion of funds under management, invested in business, logistics and IT parks, data centres and short-term lodgings across 13 cities in India.

CapitaLand’s presence in India started with the development of the country’s first IT park in 1994. The International Tech Park Bengaluru, with its futuristic glass-steel design that remains the template for Indian IT offices today, was launched on the cusp of the country’s evolution into a global software hub.

CapitaLand’s foray into business and logistics parks in the past decade was in tandem with India’s efforts to woo global manufacturers looking beyond China.

It faced initial challenges such as erratic power supply, land acquisition difficulties and red tape, recalled Mr Manohar Khiatani, senior executive director of CapitaLand Investment. However, these issues have been less onerous in the past decade because of better tax and real estate regulations and “dramatic infrastructure and digital growth”, he noted. 

Mr Lim said the company will continue its long-term approach of keeping a close eye on India’s priority sectors, building deep roots and employing locals as it expands its investments in data centres and begins investing in renewable energy and real estate private debt. 

CapitaLand is investing $1.5 billion in building data centres with a total power capacity of 244MW in Navi Mumbai, Hyderabad, Chennai and Bengaluru. 

Mr Sanjeev Dasgupta, CapitaLand’s chief executive officer in India, said investing in renewable energy production was “a natural extension of our data centre plans”. This will help make its energy-guzzling data processing more environmentally sustainable.

The company commissioned its first solar power plant in Tamil Nadu in January 2024, aiming to provide green energy to its data centre, IT and business park clients at affordable rates. 

This comes as India aims to raise its green energy capacity from the current 111 gigawatts to 500 gigawatts by 2030.

Business parks now make up around 90 per cent of the company’s portfolio in India, which Mr Dasgupta expects could fall to 65 per cent as data centres take up a more sizeable part of the mix. 

“Data centres will become a key engine of our growth here. India accounts for 20 per cent of data created globally but has only 2 per cent of the world’s storage capacity.

“That we decided to build four data centres at a go is a sign of our conviction about the sector,” he added.

India’s moment

India was the only major Asia-Pacific market to show a growth in real estate transactions in the 12 months ending June 2024, up 35 per cent from the previous year, according to real assets data from Morgan Stanley Capital Investment (MSCI).

India’s GDP is forecast to grow 7 per cent in 2024, down from 7.7 per cent in 2023 but still ahead of other developing Asian markets. The International Monetary Fund projects India being on track to be the world’s third-largest economy in the next five years.

Much of that growth is expected to come down to foreign investors hunting for growth opportunities amid slower growth and higher wages in China.

India is also seeking foreign investment to accelerate the development of its local semiconductor manufacturing capabilities to step into the gap that has emerged as the US works to limit China’s access to strategic technologies such as semiconductors.

Prime Minister Narendra Modi has commissioned a flurry of infrastructure projects to make parts of India a more compelling investment proposition.

Ongoing mega infrastructure projects like transportation corridors, highways, ports and industrial zones, along with organic urbanisation and digitalisation, are expected to support real estate growth “by creating satellite cities, industrial parks and stimulating the growth of peripheral areas”, said Mr Dasgupta.

And as global corporations and institutional investors come to India, CapitaLand hopes to leverage their demand for quality real estate assets, he added.

This contrasts with CapitaLand’s approach in China, where it plans to switch to a “China for China” strategy, a company representative said. This would mean efforts to attract more domestic clients to the company’s business and logistics parks, rather than depend primarily on foreign manufacturers as it did before.

China accounts for the largest slice of CapitaLand’s international portfolio, but India is its fastest growing geographical segment.

“India’s advantage is that it is not a mature market. It is rapidly evolving and growing, and full of opportunities,” Mr Lim said.

“We see a real ramp-up of growth and we have grown our footprint by more than four times, tripling in just the last seven years. Many stakeholders tell us India’s time has come and it has put us in a sweet spot, having been in India for 30 years,” he added.