CapitaLand launches second ₹22.5 billion logistics private fund in India

July 12, 2021: CapitaLand has launched its second logistics private fund of S$400 million (₹22.5 billion) to expand in India’s logistics sector, one of the largest globally.  

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) of S$79.2 billion 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,” reads the release.  

CapitaLand Limited (CapitaLand) is one of Asia’s largest diversified real estate groups. Headquartered and listed in Singapore, it owns and manages a global portfolio worth about S$137.7 billion as of March 31, 2021.

CapitaLand India Logistics Fund II follows the successful deployment of CapitaLand’s first logistics private fund, the S$400 million Ascendas India Logistics Programme 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 manages the assets of Ascendas India Logistics Programme and CapitaLand India Logistics Fund II.  

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)  and grow the Group’s assets under management (AUM)  in a capital-efficient way.  In 1Q 2021, CapitaLand’s FRE increased by more than 30 percent 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, the USA and Europe where there is strong investor demand.” 

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.”

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.  The logistics market in India is forecasted to expand at a compound annual growth rate of 10.5% between 2019 and 2025.   

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.  

Operational
Ascendas-Firstspace Chennai, Oragadam
Strategically located in Chennai’s largest and most developed industrial belt, Ascendas-Firstspace Chennai, Oragadam is spread over 150 acres catering to clients in the auto, electronics, engineering and logistics sectors.  1.6 million sq ft of industrial logistics space has been developed and leased to companies such as cable maker Foxlink, and TPI Composite, a U.S.-based independent manufacturer for composite wind blades.  Ascendas-Firstspace Chennai, Oragadam has 3 million sq ft of development potential.

Ascendas-Firstspace Chennai, Periyapalayam 
Ascendas-Firstspace Chennai, Periyapalayam is located within the key logistics belt in North Chennai with easy access to two seaports.  Spread over 120 acres, Ascendas-Firstspace Chennai, Periyapalayam caters to storage and distribution requirements of the automobile, electronics, export-import, fast moving consumer goods and e-commerce sectors.  1.2 million sq ft of logistics space has been developed and leased to industry majors like Honda Motors, P N Writer, Toll Logistics, Unilever, and Yusen Logistics.  1.4 million sq ft is under development.  

Upcoming projects
Ascendas-Firstspace NCR, Palwal
Ascendas-Firstspace NCR, Palwal is located within NCR’s emerging multi-modal logistics hub, with quick and convenient access to Delhi, Gurugram, Faridabad, Noida and other major cities of Haryana and Uttar Pradesh.  It is also well connected to the Delhi-Mumbai Industrial Corridor, Delhi–Mumbai Expressway and KMP-KGP expressway.  Ascendas-Firstspace NCR, Palwal is spread over 50 acres and has a development potential of 1.2 million sq ft of logistics space.

Ascendas-Firstspace NCR, Farukhnagar
Ascendas-Firstspace NCR, Farukhnagar has excellent connectivity to Delhi International Airport, Gurgaon, KMP Expressway and Delhi-Jaipur Highway and provides quick access to high consumer clusters in Gurgaon, Industrial Model Township Manesar and Western India.  It is also in proximity to manufacturing facilities and leading warehousing companies from various industries and has access to the quality workforce from the region.  Ascendas-Firstspace NCR, Farukhnagar is spread over 140 acres and has a development potential of 3.4 million sq ft of logistics space.

Ascendas-Firstspace Pune, Chakan
Ascendas-Firstspace Pune, Chakan is located within the Chakan Talegaon Industrial corridor (CTIC), one of India’s leading industrial hubs for automobiles, engineering, electrical, white goods and food processing.  CTIC enjoys high-grade infrastructural facilities, with easy access to transport infrastructure and a well-developed manufacturing ecosystem. Ascendas-Firstspace Pune, Chakan is spread over 30 acres and has a development potential of 0.65 million sq ft of logistics space.

Ascendas-Firstspace Bangalore, Hoskote 
Ascendas-Firstspace Bangalore, Hoskote is located within one of the major industrial hubs of Bangalore with excellent connectivity to Bangalore International Airport, railway station, national and state highways.  It is in proximity to major auto manufacturing and industrial facilities and other industrial parks.  Ascendas-Firstspace Bangalore, Hoskote is spread over 91 acres with a development potential of 2.7 million sq ft of logistics space.