Singapore-based CapitaLand Investment Ltd (CLI) plans to more than double its funds under management (FUM) in India by 2028, from the current base of S$7.4 billion. Besides increasing investments in business parks, data centres and logistics, the fund manager plans to make forays into private lending for real estate and investments in renewable energy projects.
Andrew Lim, group chief operating officer of CapitaLand Investment (a real estate fund manager), said India’s share of overall business was around 3.5 per cent in 2019, and today the share is just over seven per cent of S$100 billion of investment funds. CLI plans to double funds under management by 2028 (S$200 billion), implying that India’s growth trajectory should outpace that of any other market, he said at a media presentation on India business plans.
At present, business parks have a 90 per cent share of FUM in India, and the remaining 10 per cent is industrial. The share of different lines will change in the growing FUM. Business parks will have a 60-65 per cent share by 2028, said Sanjeev Dasgupta, CEO, CLI India.
Business growth in the country will be done through listed CapitaLand India Trust (CLINT) and private funds. The fund manager has set up four private funds in logistics and business parks. There are opportunities for data centre funds in India, which are supported by the country’s fast-growing digital economy, he added.
As for new business lines, Dasgupta said CLI will explore opportunities to enter into adjacent business segments such as renewable energy and private real estate lending. Potentially, for the renewable energy business, CLI could consider an infrastructure trust for a portfolio of operating projects.
CLI has a captive demand for renewable energy from its tenants in its data centres and business parks. Hence, the focus is more on supplying power to corporate and institutional customers and not so much on the utility sector, Dasgupta said. CLINT commissioned its first captive solar power plant in Tamil Nadu in January 2024.
As for the possibility of getting into the private real estate lending business, he said CLI has become interested in it as bankruptcy laws in India have matured. “We are seeing a lot of cases where people have been able to enforce a reasonable period of time in case of default,” Dasgupta said.
Moreover, the Reserve Bank of India has made it very difficult for banks to lend for land acquisition and pre-approval projects. This opens up an interesting opportunity to earn good returns for a real estate lending strategy, Dasgupta added.
First published: September 4, 2024 | 18:38 IS
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