Singapore’s CapitaLand Unveils $540M Chennai Investment Plan

Singapore’s CapitaLand Unveils $540M Chennai Investment Plan

International Tech Park Chennai - Radial Road

CLI unveiled the first building in International Tech Park Chennai – Radial Road in October. (Image: CapitaLand)

Singapore property heavyweight CapitaLand Investment (CLI) continues to bolster its presence in India as it unveils plans to invest INR 45 billion ($540 million) in business parks, logistics and data centre developments in Chennai over the next five years.

CLI has signed three memorandums of understanding with the Tamil Nadu government, committing INR 15 billion to expand its International Tech Park Chennai – Radial Road in the state’s capital and another INR 11.5 billion to build a data centre in the neighbourhood of Ambattur, company representatives confirmed on Wednesday.

Over a span of five years, the Temasek Holdings-backed giant will allocate INR 10 billion to beef up its Chennai logistics portfolio through its Ascendas First Space joint venture with local partner Firstspace Realty, while the remaining INR 8.5 billion will be allotted for other unspecified projects.

CLI made the pledges during the two-day Tamil Nadu Global Investment Meet this week as Singaporean investors continue to bet big on Indian real estate. ST Telemedia Global Data Centres (STT GDC), another Temasek-backed firm, also revealed plans to boost its portfolio in the country by another 80 megawatts in the coming decade, according to a government statement on Sunday.

Desks and Sheds

CLI will use the additional investment for ITPC – Radial Road business park to develop the last two towers of the five million square foot (464,500 square metre) Grade A office development. The expansion follows the launch of the first tower in October of last year while the second building is still under construction and is expected to be operational by the second quarter of 2024.

Sanjeev Dasgupta - CEO of Ascendas India Trust

Sanjeev Dasgupta, CEO of CLI India

Touted as India’s first net zero building for energy efficiency, water conservation and waste management, the entire project is being developed under the CapitaLand India Growth Fund 2 launched in August last year. The strategy has a target size of S$525 million and counts Japan’s Mitsubishi Estates among its major investors.

ITPC – Radial Road, located within the Zamin Pallavaram business hub, is expected to cater to more than 50,000 IT service professionals upon completion by 2025.

The INR 1 billion allocated for CLI’s joint venture with Mumbai-based industrial specialist Firstspace Realty aims to grow the platform’s portfolio of two existing logistics parks in Chennai, a 150-acre (61-hectare) campus in the suburb of Oragadam and another 120-acre development in the village of Periyapalyam. The partners plan to develop the 125 acre of land situated right next to the Oragadam logistics park, according to a CLI spokesperson.

The investment commitment for the Ambattur data centre marks a follow through on the company’s earlier announcement in December 2022 when it first unveiled the third data centre project of SGX-listed CapitaLand India Trust. The 55 MW facility will be built on a four-acre land and is expected to be completed in phases over the next four to five years.

Bullish on Chennai

Should the pledges materialise, the firm’s total investments in Chennai will nearly double the INR 50 billion ($600 million) it had invested so far.

“CLI has witnessed Tamil Nadu’s transformation over the last 18 years since we entered Chennai, and the city is now among the fastest-growing markets within India for CLI where we have the most diversified portfolio of assets. This is a testament to the state’s business-friendly environment and highly skilled workers,” CLI India chief executive Sanjeev Dasgupta said in an earlier statement in October.

The rest of the firm’s portfolio in the city includes the International Tech Park Chennai – Taramani and CyberVale office properties, as well as the Somerset Greenways Chennai and Citadines OMR serviced apartments.

The investment management arm of CapitaLand Group has S$5 billion in assets under management spanning business parks, manufacturing, logistics, lodging, data centre and co-working assets in seven Indian cities.

STT GDC Eyes Indian Expansion

STT GDC is also set to capitalise on India’s burgeoning property sector, according to a separate announcement, and aims to build 80 MW of new data centre capacity across its target locations in Tamil Nadu over the next eight to 10 years, which will more than triple its existing 43 MW Chennai portfolio.

STT GDC manages 27 facilities in nine Indian cities with a combined IT load of more than 300 MW, including three operational data centres in Chennai. The company also has two projects under development in the city, which are expected to deliver 28 MW of capacity once completed.

During the summit, Singapore-based companies committed to invest S$5 billion in Tamil Nadu across sectors including infrastructure, technology and sustainability in addition to real estate.

“The latest pipeline of collaborative initiatives and associated investments show that Singapore companies are strategically building the breadth and depth of their engagement in Tamil Nadu. These also testify to the strong opportunities and investor friendly policies of the state,” said Tan Soon Kim, deputy CEO of state agency EnterpriseSG.

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