CapitaLand Investment has been diversifying its business portfolio, investing `10,000 crore across data centres, office spaces and logistics parks in India. Additionally, Ascendas India Trust has invested `7,300 crore in office spaces. Gauri Shankar Nagabhushanam, CEO, (India business parks), CapitaLand Investment, tells Shubhra Tandon the company is looking to double its assets under management and the size of its portfolio in the country across verticals by 2026. Excerpts.
What is the business overview like for CapitaLand in India right now?
As of today, in terms of our India portfolio we have 3.7-3.8 billion Singapore dollars; square foot terms will be 21-22 million square feet in business parks, 5-6 million sq. ft. in warehousing and logistics industrial parks, and we are just about starting with early steps into the data centre business.
What are the plans on expanding this portfolio?
We are keen to double our portfolio size in the next three to four years. On the assets under management (AUM), we are aiming for 7-8 billion expansion in Singapore dollars, and this will equally reflect on the square footage as well. From about 22 million sq. ft. in business parks we should be closer to 40 million sq. ft., and on the logistics side also we should be able to reach 15-16 million sq. ft. of build and lease space. On the data centres also we should be starting on the Mumbai, Bengaluru and Hyderabad chapters in that portfolio, Chennai following soon after.
What is your strategy for these expansions?
We currently have an active pipeline of assets under development, so as we speak we have 8 million sq. ft. of development on the business park side, and already have land to keep continuing to grow that business. On the warehousing side, we have close to 550-600 acres of land. About one-third is roughly developed, and the remaining will be developed over the next three years, which will contribute another 8-9 million sq. ft. We will also be acquiring assets in the market for inorganic growth in terms of forward purchase through the AI Trust (Ascendas India Trust) platform, and some private equity funds that we will be setting up over the course of next couple of years. Between organic and inorganic growth, we should meet those timelines and square footage, and AUMs over the next three years.
What is the plan on data centre expansion?
If you look at the business, the space take-up is small because each data centre would be 250,000-350,000 sq. ft., so in terms of square footage it is small, but in terms of capex it will be large. So each project on its own would be anywhere around $300 million to $400 million in value. So four sites put together will be $2 billion just from there, but it is going to get consumed over a period of time. So, I would say that $1 billion in terms of AUM over the next three-four years would be coming from data centres and the other $3 billion as $0.5 billion from logistics, industrial and warehousing, and $2-2.5 billion from business parks.
Are you forging joint ventures for these expansions?
We have a mix of portfolio. We currently have our own land parcels, then in our existing business parks we have space which we continue to develop. In our Bengaluru business park we have 3 million square feet, which is currently under way. Similarly a couple of million square feet will be developed in our Hyderabad park, a couple of million, if not more, in our Gurugram park and 1.3-1.4 million square feet more is under development in our Pune park. Also, we are in forward purchase agreements where we agree on a certain economics with our land owners/ developers that you build these buildings to our specifications and subject to them getting leased over a certain period of time, we will acquire them for a certain value.
What will be the geographical expansion mix like with these plans?
We will be expanding business parks in the cities that we are present in — Chennai, Bengaluru, Hyderabad, Pune, Mumbai and Gurugram — because we continue to believe that a lot of expansion will happen in these metro and tier-1 cities. Additionally, we would look at largely acquiring properties in tier-2 cities. Expansion of logistics will also be in these cities, but in addition we will also look at Kolkata and tier-2 cities like Jaipur, Lucknow, Ludhiana, Coimbatore, Guwahati. Data centres will be in Mumbai, Hyderabad, Bengaluru and Chennai.