CapitaLand India Trust, or CLINT for short, owns a portfolio of 10 world-class IT business parks, three industrial facilities, one logistics park and four data centre developments in Bangalore, Chennai, Hyderabad, Pune and Mumbai, India.
Its high quality properties, spread across major Indian cities, allow CapitaLand India Trust to capitalise on the“fast-growing IT industry and industrial/logistics asset classes in India, as well as proactively diversifying into other new economy asset classes such as data centres”.
As of December 2024, it boasts 95% occupancy. In the near term, CapitaLand India Trust continues to see healthy revenue growth with contributions from two new properties – its MTB 6 at International Tech Park Bangalore and data centre in Navi Mumbai – starting late 2Q 2025.
CLINT currently has a 7.2% distribution yield (based on FY 2024 DPU of 6.84 Singapore cents at closing price of S$0.945 per unit as at 19 March 2025).
It also anticipates higher income from rental escalations and new leases at its existing properties, while retaining a healthy yield-accretive development pipeline from its sponsor CapitaLand Investments.
For those interested in REITs investing, as well as gaining exposure to the vibrant Indian property market, here are 5 things you should know about CapitaLand India Trust.
#1 Over 60% Of CLINT’s Portfolio Base Rent Comes From Technology Sector Tenants. 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. Startups and unicorns have significantly boosted the IT ecosystem.
CLINT’s tenants include multinational and established Indian IT companies serving industries like Automobiles, Healthcare, E-commerce, and Banking, Financial Services, and Insurance (BFSI) industries.
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 forecasted 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.
#2 How Have Disruptive Technologies Like Artificial Intelligence (AI) And Machine Learning Changed The Way CLINT Carries Out Its Data Centre Business, And What Are The Benefits That Resulted From That?
The rapid pace of digitalisation, adoption of cloud computing, streaming, e-commerce, and data localisation has generated a huge demand for data storage and processing.
The rise of 5G and AI has only spurred demand for high-performance computing capacity – which require significantly more power and cooling, with server deployments accelerating demand well beyond supply. On the other hand, Cloud Data Centres, which are positioned close to end-users to minimise latency, will continue to see strong demand, especially in urban areas. These are the DCs that CLINT has and is developing in Navi Mumbai, Hyderabad, Chennai and Bangalore.
By identifying the Data Centre asset class early on, CLINT is well-positioned to capitalise on the growing demand, particularly those catering to high-quality co-location needs.
In 2021, we acquired land in Navi Mumbai for our first Data Centre. We now have three more Data Centres 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 2Q25, with keen interest already expressed by hyperscaler and enterprise clients.
Our DCs are designed to integrate with our IT parks to foster business growth – offering tenants secure, reliable, and scalable data storage and processing infrastructure, enhanced connectivity with reduced latency, and streamlined operations for improved efficiency. We are currently developing two DCs within our existing IT parks – International Tech Park Hyderabad and ITPB.
Our real estate background and local expertise in land acquisition, getting authorities’ approvals, design, development and operations provide us with an edge over pure DC operators. We have a strong team of DC specialists supported by our sponsor’s (CapitaLand Investment’s) global centre of excellence for Data Centres, and an established global customer network.
Globally, CapitaLand Group has a strong track record of delivering scalable, high-performance DCs. CapitaLand Group has 27 DCs (15 in Asia and 12 in Europe) across nine countries with a total power capacity of about 800 MW power and about S$6 billion of assets under management on a completed basis. We are able to leverage our Group’s network and international experience as we continue to grow our DC portfolio in India.
#3 What Are The Top 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 Data Centre 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.
We will 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 (INR) 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.
An increase in interest rates will have a negative impact on our bottom line. However, this is mitigated as 73% of our borrowings are hedged into fixed-rate. A 10% increase in EBITDA will see our Interest Coverage Ratio stand at 2.3x; similarly, a 100 basis points increase in interest rates will see our ICR also stand at 2.3x, comfortably above the minimum Interest Coverage Ratio imposed by the MAS of 1.5x.
To mitigate the impact of interest rate changes, we employ several strategies:
– We maintain a diversified funding mix, including debt and equity, to reduce reliance on any single funding source
– A significant portion of our debt is fixed-rate, which helps to mitigate the impact of interest rate increases
– We use interest rate hedging instruments, such as swaps and caps, to manage exposure to interest rate fluctuations
– We regularly review our funding requirements to ensure that we have sufficient liquidity and flexibility to respond to changes in interest rates.
#4 Sustainability And ESG Are A Key Focus For Business That Own Properties. Is CLINT Addressing The Environmental Impact Of Your Properties?
We embed sustainability in every phase of our real estate life cycle. Our first captive 21 MW 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 space’s 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 8 MW expansion potential to bring the solar plant’s total size to 29 MW.
We obtained a S$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 31 December 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 31 December 2024, sustainability-linked loans accounted for 65% of our total loans.
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 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
– 15% water consumption intensity
Notably, in FY 2024, 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 31 December 2024, 94% of our business parks was green certified.
We managed to achieve 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. Additionally, 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.
#5 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 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.
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Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 25 March 2025 and republished with permission. You can read more about CapitaLand India Trust (SGX: CY6U) on the SGX website.
You can also read other featured companies from SGX’s 10 in 10 series on the DollarsAndSense website.
The post 5 Things You Need To Know About CapitaLand India Trust (SGX: CY6U) – Riding On India’s Tech Wave appeared first on DollarsAndSense.sg.
