CapitaLand launches second S$400M India logistics fund

Logistics asset Ascendas-Firstspace Chennai, Oragadam is strategically located in Chennai’s largest and most developed industrial belt. It is one of six assets held under the Ascendas India Logistics Programme. Credit: CapitaLandLogistics asset Ascendas-Firstspace Chennai, Oragadam is strategically located in Chennai’s largest and most developed industrial belt. It is one of six assets held under the Ascendas India Logistics Programme. Credit: CapitaLand

CapitaLand launched CapitaLand India Logistics Fund II, its second logistics investment fund of S$400 million, or around 22.5 billion Indian rupees, to invest in developing logistics assets on the sub-continent, the property developer said in a filing to SGX Wednesday.

The fund will invest in warehousing and manufacturing hubs in six major cities — Ahmedabad, Bangalore, Chennai, Mumbai, National Capital Region (NCR) and Pune — as well as in emerging areas such as Coimbatore, Guwahati, Jaipur, Kolkata and Lucknow, the statement said.

Jonathan Yap, president of CapitaLand Financial, overseeing the company’s business in India, said the second fund was part of the strategy to expand the fund management business and generate recurring fee-related earnings.

Fee-related earnings rose more than 30 percent on-year in the first quarter of 2021, with the company setting a target of at least S$100 billion in funds under management by 2024, Yap said in the statement.

“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,” Yap said. “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, USA and Europe where there is strong investor demand.”

Yap said CapitaLand saw “significant opportunities” in India’s logistics sector, especially as the pandemic has driving growth in e-commerce, which increased demand for warehouse and distribution facilities.

India’s logistics market is projected to expand at a compound annual growth rate of 10.5 percent over 2019 to 2025, CapitaLand said, citing an industry outlook.

The earlier fund, the S$400 million Ascendas India Logistics Programme, launched in 2018, aimed to develop six logistics and industrial projects in Bangalore, Chennai, NCR and Pune, with two projects already operational, CapitaLand said.

In 2019, CapitaLand said it planned to more than doubled its assets under management in India to S$7 billion by 2024.

The new fund will boost CapitaLand’s current total funds under management to S$79.2 billion across more than 20 private funds and six listed trusts, the filing said.