CapitaLand unveils second US$400 million private logistics fund in India

CapitaLand has launched ‘CapitaLand India Logistics Fund II’, its second logistics private fund of US$400 million (Rs 22.5 billion) to expand in India’s warehousing sector.

CapitaLand India Logistics Fund II will invest in the development of logistics assets in key warehousing and manufacturing hubs in six major cities namely National Capital Region (NCR), Mumbai, Ahmedabad, Bangalore, Chennai, 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 US$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.

The new fund follows the deployment of its first logistics fund, the US$400 million Ascendas India Logistics Programme, which was launched in 2018 to develop six projects in Bengaluru, Chennai, NCR and Pune. The projects have a total development potential of 12 million sq ft of space, two of which are operational with 2.8 million sq ft of leased space.

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% year-on-year.”

“Our target is to grow CapitaLand’s FUM to at least US$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, USA and Europe where there is strong investor demand.”

In 2018, Singapore-based Ascendas-Singbridge Group and real estate firm Firstspace Realty entered India’s industrial logistics and warehousing market with their first fund. In 2019, CapitaLand completed the acquisition of Temasek Holdings-owned Ascendas-Singbridge.

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 US$137.7 billion as of March 31, 2021. In October 2019, CapitaLand announced that it aims to more than double its AUM in India to US$7 billion by 2024. Currently, CapitaLand’s total logistics AUM is about US$3.9 billion.

In total, CapitaLand targets to develop a logistics portfolio of 20 to 25 million sq ft of space in India by 2025. Ascendas-Firstspace manages the assets of Ascendas India Logistics Programme and CapitaLand India Logistics Fund II. Separately, Ascendas India Trust, a listed property trust, currently has seven warehouses located at the Arshiya Free Trade Warehousing Zone in Navi Mumbai.

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.”

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