An unnamed global institution has become a cornerstone investor in a new CapitaLand business park development fund in India, which has a target fund size of S$525m (€355m).
The institutional investor upsized its commitment to take a 50% in the CapitaLand India Growth Fund 2 (CIGF2) for S$263m. CapitaLand Investment (CLI) has a sponsor stake of 20%, bringing the total raised so far to S$368m.
Sanjeev Dasgupta, CEO of CLI India, told IPE Real Assets that conversations were ongoing with other investors to take up the remaining 30% interest in the close-ended, seven-year development fund.
Dasgupta said there was generally strong investor interest in India, but most investors would prefer to invest in an income-producing fund, rather than a development fund.
In this instance, he said: “Our investor can see that they are investing in a strong asset and not in a blind pool.”
The fund has acquired an equity stake of 70% in International Tech Park Chennai, from CLI for S$95m.
The plan for the new fund is to build out its portfolio with grade A business parks in prime locations across gateway cities in India. “We have a strong pipeline of potential acquisitions. We will source internally and externally,” Dasgupta said.
Simon Treacy, CEO of private equity real estate at CLI, said: “India is one of the fastest-growing economies in the world, anchored by its strong macro-economic fundamentals and rapid urbanisation.
“Besides business parks, we see opportunities to invest in new economy assets such as data centres, logistics and industrial properties in India through our private funds.”
CIGF2 is CLI’s second business park development fund in India since the S$300m Ascendas India Growth Programme, which was closed and fully committed in 2015.
The last fund launched by CLI in India was a S$400m logistics vehicle in 2021.
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