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BENGALURU: CapitaLand Investment India, part of Singapore’s CapitaLand Investment Ltd., plans to raise a 2,000 crore to 2,500 crore India-focused fund next year, to invest in office projects, said a top company executive.

This would be a private fund sponsored by CapitaLand with other private or institutional investors, which will invest in office projects over a period of five to seven years.

“The impetus on India has become higher for a couple of reasons. The country has been counter-cyclical and in the last two years, the biggest growth in the IT sector has happened. Companies have added massively to their headcount. There is huge demand for office space but the supply is still constrained," Gauri Shankar Nagabhushanam, CEO, India Business Parks, CapitaLand Investment, said in an interview.

CapitaLand India operates multiple business parks across six cities, and warehousing and data centers, with a combined portfolio of 25-26 million sq ft in the country.

In two to three years, the plan is to double the portfolio, to 40-50 million sq ft, and 80% of it would be business parks, Nagabhushanam said.

The company uses three verticals to acquire assets – through its proprietary book, private fund platform, which includes development and brownfield assets, and thirdly, the Ascendas India Trust.

“It is easier to acquire developed assets, but there is a dearth of good quality assets. So, we will continue to develop a large part of our portfolio, through greenfield developments and forward purchase agreements," he added.

Nagabhushanam said tenant occupancy levels are currently at 90%, with rent collections of 98-99%.

“Vacancies did increase in late 2020-early 2021. But the future growth plans of companies have expanded and the demand for office space has increased. In Bengaluru, physical occupancy in our office premises is at 55-60%, and should be back to normal by year-end. However large IT companies seem to have a challenge in bringing back employees to offices," he said.

The last fund launched in India was the CapitaLand India Logistic Fund II, of around 2250 crore, for investing in building logistics assets in warehousing and manufacturing hubs in six cities--Ahmedabad, Bengaluru, Chennai, Mumbai, National Capital Region (NCR) and Pune--as well as in emerging markets such as Coimbatore, Guwahati, Jaipur, Kolkata and Lucknow. The fund is currently being deployed.

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