CapitaLand sells data centre stakes in INR ₹7.02bn deal

CapitaLand India Trust has agreed to sell 20.2% stakes in three data centres under development to CapitaLand India Data Centre Fund for an estimated INR 7.02 billion, or S$99.73 million.

The transaction involves three assets that remain under development. CapitaLand India Trust said it will retain a majority interest in the projects after the sale. The buyer, CapitaLand India Data Centre Fund, sits under CapitaLand Investment's private funds platform and has raised new equity at its first close.

CapitaLand India Trust described the deal as part of a portfolio reconstitution approach. It also framed the sale as a step that increases financial flexibility for future investment activity.

"The partial divestment reflects continued execution of our portfolio reconstitution strategy. By unlocking value earlier in the development cycle, while retaining a significant stake in the assets, we are able to support our development pipeline and enhance financial flexibility," said Gauri Shankar Nagabhushanam, Chief Executive Officer, CapitaLand India Trust Management.

Fund Raise

CapitaLand Investment said CapitaLand India Data Centre Fund raised about S$150 million in equity at first close. A third-party global institutional investor anchored the first close. CapitaLand Investment made a general partner commitment.

The fund targets a final close of about S$300 million, according to CapitaLand Investment. The manager said the fund focuses on data centre development opportunities in India's key data centre corridors.

The acquisition of a minority stake in the three projects represents the first announced deployment from the first close. CapitaLand Investment did not name the investor in the first close in the information released about the fundraise.

India Exposure

CapitaLand Investment linked the fund strategy to current demand factors in India's data centre market. The company pointed to cloud adoption, data localisation and the growth of AI workloads as drivers of investment interest.

"The successful first close and investor's support in CIDCF underscore CLI's investment and development strategies to shape India's dynamic data centre landscape. India has emerged as a hotspot for data centre investment, driven by cloud adoption, data localisation and the rapid growth of AI-led workloads. The country's data centre capacity is expected to double by 2027. With three prime assets currently under development and power secured, CIDCF offers an attractive prospect for private capital to participate in this growth opportunity," said Andrew Lim, Group Chief Operating Officer, CapitaLand Investment.

The manager also positioned the locations of the three projects within established corridors. It cited access to power and network connectivity. It said the portfolio aligns with demand from hyperscalers and enterprise customers.

"CIDCF's portfolio is strategically located within India's established data centre corridors with access to power and network connectivity. It is poised to meet growing demand from hyperscalers and enterprise customers. CLI has gained deep experience operating in India for over 30 years. Tapping our global data centre operating excellence, we are also well-positioned to meet market demand for cutting-edge, secure and sustainable data infrastructure. With CLI's combined real estate, investment and data centre expertise, we remain confident in delivering attractive and long-term value for stakeholders," said Hardik Gesota.

Deal Terms

CapitaLand India Trust said it has entered into definitive agreements for the divestment. The buyer will take 20.2% stakes in each of the three projects under development. The estimated total purchase consideration stands at INR 7.02 billion, which the companies also expressed as S$99.73 million.

CapitaLand India Trust said it will remain invested in the future growth of India's data centre sector through its remaining stake. It also set out optionality linked to its relationship with CapitaLand India Data Centre Fund and its sponsor.

"We are pleased to be partnering with CIDCF and remain invested in the future growth of India's data centre sector through our remaining stake in the portfolio. The partnership with CIDCF also provides CLINT the right to participate in a partial stake in future data centre developments by our sponsor and potentially buy back the assets or explore exit options such as an initial public offering of the assets. Post-transaction, CLINT remains well-positioned to pursue accretive and higher yielding investment growth opportunities in key India cities to create value for our Unitholders," said Nagabhushanam.

CapitaLand Investment said CapitaLand India Data Centre Fund will continue work towards its targeted final close of about S$300 million while progressing development activity across the three data centre assets.