CapitaLand India Trust (CLINT), a leading commercial real estate investment trust listed on the Singapore Exchange since 2007, completed its first divestment by selling two major IT parks: CyberVale in Chennai and CyberPearl in Hyderabad. This strategic move is part of CLINT’s capital recycling plan to boost its balance sheet and reinvest in higher-yielding commercial properties.
Key Details of the Divestment
- CLINT sold CyberVale IT Special Economic Zone in Mahindra World City, Chennai (1 million sq ft, including 0.8 million sq ft IT SEZ and 0.2 million sq ft Free Trade Warehousing Zone)
- CyberPearl, an IT Park in Hyderabad’s HITEC City, with 0.4 million sq ft of leasable space, was also part of the sale
- Total transaction value: Rs 1,103 crore (approximately SGD 161.7 million), about 3% above independent valuations as of December 31, 2024
- Net proceeds expected: Rs 1,082.8 crore
Strategic Rationale
- Strengthen the balance sheet through debt repayment
- Recycle capital into higher-yielding commercial real estate projects for portfolio growth
- Enhance distributions to unitholders
- Post-sale, CLINT’s portfolio will have approximately 21.2 million sq ft of completed floor area
CLINT’s Ongoing Commercial Real Estate Presence
- Retains International Tech Park Chennai, three industrial facilities, and a data centre under development in Chennai
- Holds the International Tech Park Hyderabad, aVance Hyderabad, and a data centre under development in Hyderabad
The FlexInsights Take
This divestment marks a strategic shift for CLINT, balancing portfolio optimisation with financial prudence. By unlocking value from these assets in Chennai and Hyderabad, CLINT is well-positioned to deploy capital into higher-growth opportunities, particularly as market demand surges for Grade A office space in India’s tech cities. This move exemplifies capital recycling principles in commercial real estate trusts, enhancing financial agility and unitholder value. The substantial IT park market in these metros remains attractive, and CLINT’s selective retention of strategic assets, coupled with targeted investments, signals confidence in the sustained growth of India’s commercial real estate sector.
