In a significant move, the real estate arm of Japan’s Mitsubishi is entering the realm of commercial real estate development in India with a pioneering project in Chennai. Mitsubishi Estates has emerged as a pivotal investor in CapitaLand’s recently established business park development fund, CapitaLand India Growth Fund 2 (CIGF 2), as confirmed by a CapitaLand official.
This transformative initiative is underpinned by Mitsubishi’s substantial contribution, amounting to approximately 50% of the fund’s total size, which stands at SGD 400 million (approximately S$400 million). The primary endeavor financed by this fund is the International Tech Park Chennai, situated at Radial Road (ITPC-Radial Road). Furthermore, the fund is expected to extend its support to fund the second phase of the project, solidifying Mitsubishi’s entry into India’s commercial real estate landscape.
Sanjeev Dasgupta, CEO of CLI India, elaborated on the venture’s expansive scope. “There will be other IT parks in Pune and Bangalore too as part of this fund,” he disclosed during an interaction with TOI. This strategic expansion underscores the commitment of CapitaLand and Mitsubishi Estates to the burgeoning Indian real estate market, particularly in the thriving technology and business park sectors.
“CapitaLand has already made about SGD 750-SGD 800 million (approximately S$750-S$800 million) of investments in Chennai, and we expect to invest over SGD 500 million (approximately S$500 million) in the next four to five years across asset classes,” Dasgupta further emphasized. CapitaLand Investment, formerly known as Ascendas, is headquartered in Singapore and maintains a significant presence across seven Indian cities, including Bangalore, Chennai, Gurgaon, Hyderabad, Mumbai, Pune, and Goa.
With assets under management exceeding $4 billion, CapitaLand Investment operates in various asset classes, including business parks, industrial and logistics parks, and data centers. In Chennai, CapitaLand is involved in diverse asset classes, with its most recent project focusing on a data center in Ambattur. “The approval for the Chennai data center in Ambattur is expected to be granted this month, and construction will commence shortly,” Dasgupta disclosed.
Furthermore, Chennai’s real estate market is experiencing a boost, driven by the rise of manufacturing projects, particularly in the electronics sector. CapitaLand India is currently overseeing the development of approximately 11 million square feet of business parks across six Indian cities and an additional two million square feet of logistics space under development.
In line with its ambitious growth plans, the company aims to expand its portfolio from 28 million square feet to nearly 50 million square feet over the next four to five years. This expansion represents a significant commitment to India’s commercial real estate sector and underscores CapitaLand’s and Mitsubishi Estates’ shared vision for the nation’s burgeoning real estate landscape.
In conclusion, Mitsubishi Estates’ entry into India’s commercial real estate market through CapitaLand’s International Tech Park in Chennai marks a transformative development in the sector. With a substantial fund and strategic expansion plans, this venture reflects the growing opportunities and potential within India’s dynamic real estate landscape, particularly in technology and business park developments. Mitsubishi’s collaboration with CapitaLand signals a promising future for India’s commercial real estate sector and underscores the nation’s attractiveness as a strategic investment destination.