Subsidiary of CapitaLand excited to purchase three industrial properties in India for $43.2 million

ByYasmeeta Oon

Feb 7, 2024

In a significant move signaling its bullish outlook on the Indian real estate market, Singapore-based CapitaLand, through its Indian investment arm CapitaLand India Trust (CLINT), has announced the acquisition of three industrial facilities at OneHub Chennai, valued at $43.2 million. The transaction, involving a forward purchase arrangement with the Casa Grande Group, marks a pivotal step in CLINT’s strategic expansion within the Indian subcontinent.

Strategic Expansion in India

CapitaLand’s foray into the Indian market is not new, but its latest acquisition underscores a deepening commitment to tapping into the country’s rapidly growing industrial and logistics sectors. With India’s economy on an upward trajectory, the demand for industrial spaces is expected to surge, positioning CapitaLand to capitalize on this trend.

Deal Dynamics

The deal is structured as a forward purchase arrangement, with CLINT providing phased funding to Casa Grande Group, leading to the eventual acquisition of the facilities upon completion. The purchase price includes contributions towards the lease of the project land and full funding for the development phases, showcasing a strategic approach to asset acquisition and development.

Acquisition Overview

AspectDetail
Total Value$43.2 Million
Funding StructureForward Purchase Agreement
Phase 1 CompletionExpected by First Half of 2025
Portfolio IncreaseIndustrial, Logistics, and Data Centre from 12% to 14%
Total Floor AreaFrom 30.1 Million Sq Ft to 30.9 Million Sq Ft

Chennai’s industrial sector holds a pivotal role in shaping the city’s economic landscape, standing as a beacon of growth and development in India’s industrial narrative. This significance is magnified by the city’s geographical advantage and the presence of a well-established infrastructure network, which together create an environment conducive to industrial and logistical advancements. The investment by CLINT in OneHub Chennai is a testament to the increasing demand for quality industrial spaces, underlining the critical need for companies to optimize their supply chain operations amidst a rapidly evolving global market.

Strategic Location

Chennai’s geographical positioning on the southeastern coast of India provides it with direct access to major maritime trade routes, making it an ideal location for industries that rely on both domestic and international trade. The city’s proximity to several major ports, including the Chennai Port and Kattupalli Port, enhances its appeal as a logistical hub, enabling efficient import and export processes. Additionally, Chennai’s extensive road and rail network facilitates seamless connectivity across the country, further bolstering its stature as a strategic industrial center.

Robust Infrastructure

The infrastructure in Chennai is a blend of modernity and efficiency, designed to support heavy industrial activity and streamline logistical operations. The city boasts a reliable power supply, a wide network of highways and expressways, and a skilled workforce, all of which are crucial for industrial growth. The presence of specialized industrial zones and parks, such as OneHub Chennai, equipped with state-of-the-art facilities, underscores the city’s commitment to fostering an environment that encourages industrial expansion.

OneHub Chennai: A Paradigm of Industrial Excellence

OneHub Chennai distinguishes itself with its cutting-edge infrastructure and strategic positioning, designed to meet the demands of modern businesses. The park offers a plethora of facilities, including plug-and-play spaces, dedicated utility lines, and a robust IT backbone, making it an attractive destination for companies across various sectors. The focus on sustainability, with green buildings and efficient waste management systems, further enhances its appeal.

CLINT’s investment in OneHub Chennai signals a significant vote of confidence in the park’s potential to drive industrial growth. It is anticipated that this infusion of capital will not only upgrade the existing facilities but also attract a diverse array of businesses to the park. The investment is poised to have a ripple effect, spurring job creation, and fostering innovation, thereby contributing to the broader economic development of the region.

The Broader Impact

The development of industrial parks like OneHub Chennai and the attraction of substantial investments are indicative of a larger trend towards the modernization of India’s industrial infrastructure. As companies continue to seek efficient, scalable, and sustainable solutions for their supply chain needs, the role of strategically located and well-equipped industrial parks becomes increasingly important. This trend not only supports India’s industrial growth but also positions the country as a key player in the global supply chain network.

In conclusion, Chennai’s industrial sector, exemplified by the development of OneHub Chennai and underscored by CLINT’s investment, plays a crucial role in the city’s economic dynamism. The strategic location, robust infrastructure, and forward-looking investments collectively enhance Chennai’s reputation as a premier industrial and logistical hub in South Asia, setting the stage for future growth and development in the region.

Impact on CapitaLand’s Portfolio

The acquisition is set to enhance CLINT’s asset portfolio notably:

  • Before Acquisition: Industrial, logistics, and data centre asset classes constituted 12% of the committed pipeline.
  • After Acquisition: This figure is projected to rise to 14%, with the total floor area under management increasing by 2.6%.

Table: CLINT Portfolio Enhancement

MetricBefore AcquisitionAfter Acquisition
Industrial, Logistics, and Data Centre Share12%14%
Total Floor Area30.1 Million Sq Ft30.9 Million Sq Ft

Industry Expert Opinions

Real estate experts view CLINT’s acquisition as a testament to the growing attractiveness of India’s industrial sector to global investors. The strategic location of OneHub Chennai, combined with the expertise of CapitaLand, is expected to set new benchmarks for industrial developments in the region.

CapitaLand India Trust’s acquisition of industrial facilities at OneHub Chennai for $43.2 million is more than a transaction; it’s a strategic investment in India’s growth story. By increasing its footprint in the industrial, logistics, and data centre sectors, CLINT is not only diversifying its portfolio but is also positioning itself to capitalize on the burgeoning demand in one of the world’s most dynamic markets. As Phase 1 nears completion by the first half of 2025, the real estate community eagerly watches, anticipating the ripple effects of this significant move.


Featured Image courtesy of DALL-E by ChatGPT

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.