Ascendas India Trust to invest around S$217M to develop data center campus

Artist impression of Ascendas India Trust’s first data centre campus in India. Credit: CapitaLandArtist impression of Ascendas India Trust’s first data centre campus in India. Credit: CapitaLand

Ascendas India Trust will invest around 12 billion Indian rupees, or around S$216.6 million, to develop the first phase of a data center campus in India’s Airoli, a data center hub in Navi Mumbai, the REIT’s manager said in a filing to SGX Monday.

The project, one of the REIT’s first data center forays, will be among Airoli’s largest data center campuses and will be developed in phases, said the REIT’s manager, Ascendas Property Fund Trustee.

The 6.6-acre site’s acquisition is expected to be completed in the third quarter of this year, while phase one is scheduled to be ready in the second quarter of 2024, the statement said.

“Our entry into the data centre sector in India will diversify a-iTrust’s portfolio into an attractive and highly scalable asset class. India has the second fastest growing digital economy in the world. The large market size combined with the increasing trends towards data localisation validates our market entry strategy,” Sanjeev Dasgupta, CEO of the REIT’s manager, said in the statement.

“Developing our first data centre campus with support from our sponsor, CapitaLand, will allow us to leverage the CapitaLand Group’s data center expertise,” Dasgupta added.

India’s data center capacity is expected to increase at a compound annual growth rate of 31 percent to 1,007 megawatt by 2023, the REIT noted, citing data from property consultancy JLL, amid increasing adoption of 5G, AI and cloud technology.

He Jihong, CEO for data centers and chief corporate strategy officer at CapitaLand Group, said India’s rising data consumption was a good opportunity for her company.

“We are acquiring the site for development of our first data center in India following the recent acquisition of our first hyperscale data center in China, one of the largest data centre markets in the world. We are stepping up our growth in data centres and accelerating expansion of the Group’s portfolio into new economy asset classes,” she said in the statement.

She added that the new Indian project brought CapitaLand’s investments in data centers this year to around S$1.7 billion.

The site will be acquired from third-party vendors Suresh Wavia and Jayesh Vavia, via an Indian special purpose vehicle (SPV), for an around 1.31 billion rupees, the filing said. The deal will be financed with a combination of debt and internal resources, the filing said.

Ascendas India Trust has assets under management of S$2.1 billion, with its portfolio including seven IT business parks and one logistics park in India.