CapitaLand India Trust (CLINT) aims to own income-producing real estate used primarily as business space in India. The trust may also develop and acquire land or uncompleted developments to be used as business space, with the objective of holding the properties upon completion. Its portfolio includes 10 world-class IT business parks, three industrial facilities, one logistics park and four data centre (DC) developments in India.
1. What are some key drivers of CLINT’s revenue growth for FY2025?
Income contributions are expected from MTB 6 at International Tech Park Bangalore (ITPB), a fully pre-leased 0.8 million sq ft building, and from our data centre in Navi Mumbai starting late 2Q in FY2025. Higher income is also anticipated from existing properties due to rental escalations and new leases.
Beyond 2025, we have a strong development pipeline that will enhance income upon operation. We continuously seek yield-accretive investments and quality enhancements to ensure sustainable long-term returns for unitholders.
2. CLINT has significant exposure to the IT and technology sectors, with these tenants comprising 61% of the portfolio base rent. Are there plans to attract more tenants from different sectors?
The demand for Grade-A office spaces is strong, driven by the growing IT and technology sectors in India. Start-ups and unicorns have significantly boosted the IT ecosystem. Our portfolio includes multinational and established Indian IT companies serving industries including automobile, healthcare, e-commerce, as well as banking, financial services, and insurance.
The expansion of global capability centres (GCCs) in India is driving demand for Grade-A office spaces, with GCCs contributing 40% of this demand. Currently, GCCs make up about 50% of our tenant base. In India, GCCs have evolved from execution centres to hubs of innovation, employing over 1.3 million people across more than 1,800 centres.
They are forecast to grow to over 2,400 centres by 2030, potentially reaching 2,550 centres and creating over 2.5 million jobs. As a key player in the Indian office sector with a strong presence in top tier cities like Bangalore, Hyderabad, Chennai, Mumbai, and Pune, we are well-positioned to benefit from this trend.
See also: Emperador embracing premiumisation for global expansion
We will continue to build a diversified portfolio of quality tenants from strong growth industries that will further drive demand for our properties.
3. CLINT reported a committed portfolio occupancy of 95% as at December 2024. What were the key factors behind this?
High-quality portfolio: Our diverse portfolio, consisting of Grade-A office spaces and industrial facilities in top tier cities, is consistently enhanced through asset enhancement initiatives (AEIs). In 2024, we completed several AEIs including upgraded lift lobbies in Bangalore, Chennai, and Hyderabad, facade improvement works at ITPB and added amenities such as cafeteria and multi-purpose rooms at CyberPearl in Hyderabad.
Effective leasing activities: Our expert leasing teams, supported by our sponsor CapitaLand Investment’s (CLI) network, ensure high demand for our properties. In 2024, committed occupancy at key IT parks improved significantly, with aVance Hyderabad growing from 75% to 85%, and Building Q1 at Aurum Q Parc from 62% to 98%.
See also: OKP Holdings charts growth in construction
Commitment to sustainability: We incorporate eco-friendly features across our properties such as energy-efficient systems, sewage treatment, and solar power. In 2024, we achieved our inaugural GRESB five-star rating, a testament to our commitment to sustainability, which will further enhance tenant satisfaction and retention.
4. How does CLINT plan to capitalise on India’s expanding digital economy, especially with its strategic foray into DCs across major cities?
By identifying the DC asset class early on, we are well-positioned to capitalise on the growing demand for high-quality DCs, particularly those catering to co-location needs. In 2021, we acquired land in Navi Mumbai for our first DC. We now have three more DCs in Chennai, Hyderabad, and Bangalore. Our four DCs, currently under development, have a total gross capacity of around 250 megawatts (MW). Ahead of completion, we signed a long-term agreement with a leading global hyperscaler for one DC in January 2025, pre-leasing about half of the total capacity. The Navi Mumbai and Hyderabad DCs will be operational by 2Q2025, with keen interest already expressed by hyperscaler and enterprise clients.
Our state-of-the-art DC facilities feature AI-enabled infrastructure, hyperscaler-ready design, multi-area availability, high floor loading capacity, generous height clearance, and Tier 3+ certification. These features ensure reliable, secure and high-performance infrastructure for mission-critical applications.
We provide tailored services to meet specific client needs, including co-location, built-to-suit, managed services, and specialised cooling systems. Our bespoke solutions help clients maximise efficiency, reduce costs and focus on their core business.
5. For the diversification into industrial facilities, logistics parks and DCs — how do they complement CLINT’s core IT business park portfolio?
To expand our revenue streams and explore new growth opportunities, we have diversified our portfolio to include industrial and logistics (I&L) facilities as well as DCs. Our I&L facilities attract a broader tenant base, including e-commerce companies, logistics providers and manufacturers. This strategic expansion allows us to seize opportunities in the manufacturing and logistics sectors, and achieve long-term growth through diversified revenue streams. For example, Pegatron, a global electronic manufacturer known for producing iPhones, is a master leased tenant of our industrial facilities.
Our DCs are designed to integrate with our IT parks to foster business growth. This integration offers tenants secure, reliable, and scalable data storage and processing infrastructure, enhanced connectivity with reduced latency, and streamlined operations for improved efficiency. To utilise this synergy, we are developing two DCs within our existing IT parks — International Tech Park Hyderabad and ITPB. This approach enables us to provide comprehensive solutions for our tenants’ IT and DC needs.
6. Looking ahead, what are the Trustee-Manager’s top three priorities for CLINT over the next five years, and how do these align with the Trust’s long-term vision?
We aim to optimise portfolio composition through strategic divestments of mature assets and the sale of our DC stakes. This will enable us to reduce gearing, redeploy capital into higher-yielding assets, improve portfolio diversity and resilience and enhance returns for our unitholders.
For more stories about where money flows, click here for Capital Section
We seek to drive growth in distribution per unit (DPU) by improving net property income (NPI) margins through efficient operations and cost management, achieving positive rental reversion through proactive lease management and market research, and diversifying our portfolio to enhance portfolio resilience and maximise returns.
We also target to reduce interest expenses by using asset divestment proceeds to repay debt, increasing borrowings in Indian rupees to achieve natural hedge and reduce foreign currency exposure, and optimising our debt structure and maturity profile to reduce interest costs. We are also open to exploring alternative funding sources and partnerships to reduce borrowing costs.
7. With ongoing DC developments across major Indian cities, how is CLINT addressing the environmental impact of these facilities, particularly in terms of energy and water usage?
Our commitment to sustainability is aligned with our sponsor, CLI’s 2030 Sustainability Master Plan (SMP). The SMP targets Net Zero carbon emissions (Scope 1 and 2) by 2050 for the long term, with short- to medium-term goals till 2030 including: 46% reduction in Scope 1 and 2 greenhouse gas (GHG) emissions; 45% renewable energy usage; and 15% water consumption intensity.
Notably, in FY2024, we exceeded these targets achieving 46% reduction in Scope 1 and 2 GHG emissions, 56% renewable energy usage and 48% reduction in water consumption intensity. Furthermore, as at Dec 31, 2024, 94% of our business parks were green-certified.
We achieved these sustainability targets by securing power purchase agreements (PPAs) for renewable energy, utilising energy and water-efficient designs, and exploring on-site renewable energy generation. We are also targeting recognised certifications such as Bureau of Energy Efficiency (BEE) rating certification by the government of India, Ministry of Power Department, for the portfolio basis.
8. Sustainability and environmental, social, and governance (ESG) have increasingly been a key focus. How committed is CLINT towards sustainability?
We embed sustainability in every phase of our real estate life cycle. Our first captive 21MW solar power plant in Tamil Nadu, established in January 2024, produces about 29 million kilowatt-hours (kWh) of electricity, powering 2 million sq ft of office spaces’ common areas. This has increased our green energy usage by 60%, reduced our carbon emissions intensity by 50% from the baseline year of 2019, and reduced future brown power purchases. The facility has an 8MW expansion potential to bring the solar plant’s total size to 29MW.
We obtained a $200 million sustainability-linked loan from the International Finance Corporation, with goals to reduce greenhouse gas emissions of our IT business park portfolio as at Dec 31, 2023, by 40.5% from the baseline year of 2019 during the five-year loan term. We also aim to obtain Excellence in Design for Greater Efficiencies (EDGE) certification for three IT business parks — International Tech Park Chennai, CyberVale and aVance I Pune, by 2026. At Dec 31, 2024, sustainability-linked loans accounted for 65% of our total loans.
9. With global interest in India’s growth story, does CLINT see opportunities to attract more international tenants or investors to its properties?
India’s GDP is forecast to grow at a CAGR of 7.5% from 2020 to 2025, making it one of the fastest-growing economies globally. By 2025, India’s population is expected to reach 1.42 billion, with over 65% under the age of 35, providing a substantial workforce and market. The digital economy is projected to hit US$1 trillion ($1.36 trillion) by 2025, spurred by e-commerce, digital payments and IT services. With our expertise, investment network and diverse portfolio, we aim to capitalise on India’s growth.
For tenants, we offer a one-stop solution providing a range of properties across the top tier cities to cater to their diverse needs. For investors, our diversified portfolio across different asset classes and industries reduces concentration risk.
We leverage our sponsor’s network and expertise to attract global investors and tenants. With 30 years of experience in India, our deep understanding of the market, combined with strong global connections, enables us to deliver tailored solutions to international tenants and investors.
10. Why should investors take a closer look at CLINT?
We have consistently delivered strong financial performance, delivering sustainable returns with a 7.2% distribution yield (based on FY2024 DPU of 6.84 Singapore cents at closing price of 94.5 cents per unit as at March 19). Since our IPO, our portfolio size has expanded by more than five times, achieving a 14% y-o-y growth in NPI for FY 2024.
Furthermore, our balance sheet has increased by 20% compared to the previous year.
We believe our diversified portfolio and growth potential make us an attractive opportunity for investors seeking long-term growth. As of Dec 31, 2024, we have achieved a 6.2% per annum total shareholder return since our IPO.
We prioritise governance and transparency, adhering to the highest standards of accountability and disclosure. Our commitment to robust ESG practices has earned us notable recognitions, including being one of only six REITs recognised by the Singapore Board Diversity Index for exemplary diversity standards across four or more categories, an A-rating from MSCI, a Gold award for Annual Report in the REITs & Business Trusts category at the Singapore Corporate Awards 2024, and the Corporate Sustainability Award at Securities Investors’ Association Singapore (SIAS) Investors’ Choice Awards 2024.
Emelia Tan is director of research and FinLit at SGX Group
