OCBC Investment Research Private Limited

25 April 2025

CapitaLand India Trust (CLINT) Analysis: Eyeing Growth in India’s Thriving Market

Investment Thesis [[1]]

CapitaLand India Trust (CLINT) is highlighted as a pioneering property trust in Asia, focusing on India’s burgeoning IT sector. With 11 IT park clusters across major cities like Mumbai, Hyderabad, Bangalore, and Chennai, CLINT has diversified into logistics, industrials, and data centers. The trust is noted for its aggressive acquisition strategy via forward purchases, positioning it to benefit from India’s fast-growing economy, e-commerce expansion, data localization, and digital payments. The relaxation of the Special Economic Zones (SEZ) Act is expected to reduce occupancy risk for existing SEZ properties.

1Q25 Performance and Recent Developments [[1]]

• Total property income and Net Property Income (NPI) increased by 12% year-on-year (YoY).
• The divestment of CyberVale and CyberPearl is delayed until May 2025.
• Entry into a forward purchase agreement aims to strengthen the office footprint in Bangalore.
• Fair Value (FV) estimate lowered to SGD1.23.

Investment Summary [[2]]

• CLINT’s total property income and NPI rose by 12% YoY (14% in local currency) to SGD74.6m and SGD55.1m, respectively, driven by higher rental income and contributions from 2024 acquisitions.
• Committed occupancy remained stable at 92%, including options and rights of first refusal.

Security Information [[2]]

• Ticker (Refinitiv / Bloomberg): CAPC.SI / CLINT SP
• Market Cap: SGD 1.3b
• Daily Turnover: SGD 2.8m
• Free Float: 99%
• Shares Outstanding: 1,344m
• Top Shareholder: Temasek Holdings Pte. Ltd. (25.4%)

Financial Summary [[2]]

SGD m

%

Update on Divestment Plans and Gearing [[2]]

• Gearing increased from 38.5% as of 31 Dec 2024 to 41.5% as of 31 Mar 2025, due to debt drawdown for working capital and development projects.
• Management expects gearing to fall below 40% after proceeds from CyberPearl and CyberVale divestments are realized, now expected by May 2025.
• Cost of debt remained stable at 6%, with 84.5% on fixed rates.

New Forward Purchase Agreement [[2]]

• In Feb 2025, CLINT announced a forward purchase agreement to acquire an office project at Nagawara, Outer Ring Road, Bangalore (MAIA).
• CLINT will provide SGD156.4m funding over four years, starting in 2H25.
• The acquisition, post-completion in 2H28, is estimated at SGD233.6m, funded through divestment proceeds, debt, and internal resources.
• Pro forma analysis suggests a 1.8% increase in FY24 DPU to 6.96 Singapore cents if the acquisition had been completed on 1 Jan 2025.

Revised Fair Value Estimate [[2]]

• The FV estimate is reduced to SGD1.23 due to:
  • Steeper depreciation of INR vs SGD.
  • Increased cost of equity input from 9.38% to 9.8% due to macroeconomic uncertainty.
  • Lowered terminal growth rate assumption by 25bps to 2.5%.
• FY25 and FY26 DPU forecasts lowered by 3.6% and 4.9%, respectively.
• Despite these adjustments, a BUY rating is maintained.

ESG Updates [[2]]

• CLINT maintained its ESG rating in Dec 2024.
• CLINT leads in green building initiatives, including green leases.
• 79.5% of the portfolio area was certified to green building standards in FY23, surpassing the industry average of 47%.
• CLINT outperforms peers in staff management practices and has a majority-independent board.

Potential Catalysts [[3]]

• Developments on DC partial divestment.
• Stronger-than-expected outsourcing demand.
• Increasing tenant pick-up through denotification of SEZ space.

Investment Risks [[3]]

• Forward purchases failing to meet pre-agreed building specifications.
• Delays in DC development and divestment plans.
• Unexpected appreciation of SGD over INR.

Valuation Analysis [[3]]

Company Overview (as of 31 December 2024) [[4]]

CapitaLand India Trust, listed on the Singapore Stock Exchange since Aug 2007, focuses on income-producing commercial real estate in India. As of 31 Dec 2024, it owns 11 IT parks, four data centre developments, and three logistics and industrial facilities, totaling 19.6msqf across Bangalore, Chennai, Hyderabad, Mumbai, and Pune, valued at SGD3.4b. CLINT is managed by CapitaLand India Trust Management Pte. Ltd., a subsidiary of CapitaLand Investment.

FY24 Base Rents Breakdown [[4]]

• By City (India):
  • Hyderabad: 27%
  • Bangalore: 27%
  • Chennai: 18%
  • Pune: 20%
  • Mumbai: 8%
• By Tenant Sector:
  • Technology & Software Dev: 61%
  • Others: 8%
  • Electronics, Semiconductor & Engineering: 11%
  • Automobile: 6%
  • Banking & Financial Services: 7%
  • Design, Gaming and Media: 3%

Net Property Income and Distribution Per Unit [[4]]

Historical performance:

• Net Property Income (SGD m): Increasing trend from FY2018 (128) to FY2024 (206).
• Distribution per unit (S cents): Fluctuated, with 6.84 S cents in FY24.

Company Financials – Income Statement [[5]]

Key figures from the Income Statement (In Millions of SGD):

Profitability Ratios [[5]]

Credit Ratios [[5]]

Analyst Declaration and Disclaimer [[6]]

The analyst(s) who prepared this report certifies that the opinions contained herein accurately and exclusively reflect his or her views about the securities of the listed entity, and that he or she has taken reasonable care to maintain independence and objectivity in respect of the opinions herein.

Disclaimer: This report is for information purposes only and should not be construed as an offer or solicitation for the subscription, purchase, or sale of securities. The information is from sources believed to be reliable, but its accuracy and completeness are not guaranteed. Opinions and estimates are subject to change without notice.

Ratings and Recommendations [[7]]

• OIR’s fundamental views and ratings (Buy, Hold, Sell) are medium-term calls within a 12-month investment horizon.
• As a guide, OIR’s BUY rating indicates total expected returns (excluding dividends) in excess of 10% based on the
  current price; a HOLD rating indicates total expected returns (excluding dividends) within +10% and -5%; a SELL rating
  indicates total expected returns (excluding dividends) less than -5%. For REITs and Business Trusts, total expected returns
  including dividends apply.