CapitaLand is investing over S$1 billion in 15 malls across India through two joint ventures with Indian companies.
The venture will be fully funded by the CapitaRetail India Development Fund, which is 45 per cent owned by CapitaLand. CapitaLand said it plans to duplicate its China strategy in India, which is to focus first on the gateway cities, including Mumbai, New Delhi and Bangalore, and then venture out.
CapitaLand CEO Liew Mun Leong said, "We have already formed a fund in Singapore which will invest (in malls) in India... and this fund will be used to invest in the funds in Asia."
The 15 malls will have an asset value of more than S$2.12 billion and a total lease area of over 11 million square feet, about 220 times that of Tampines Mall.
Being the largest retail property landlord and manager in Singapore, CapitaLand said the two joint ventures will give it immediate presence and scale within India, with 15 retail or predominantly retail projects across 14 cities.
One of its partners, the Prestige Group, will give it greater access to South India while the other, Advance India Projects, will help it expand in the northern part of the country.
CapitaLand plans to exit the investments through a real estate investment trust.
The property developer, which has been successful in spinning off its assets into REITs, also said it may list in India, Singapore or London.
One of its sponsored REITs, CapitaMall Trust, reported a distributable income of S$39 million for its fourth quarter on Tuesday, and is proposing to pay out 2.34 cents a unit.
Senior analyst David Lum at Daiwa Institute of Research said, "I think a 14 per cent year-on-year growth is very impressive for a mature REIT… I think the results showed there is underlying growth."
"There's still a lot of room for asset enhancement, a lot of room for acquisitions and probably in a very shaky market, CapitaMall might be able to acquire some properties at a decent price. So I think the drivers for last year will remain for this year, and I think it's not too demanding to look for double digit growth in CMT's results again," he added.
CapitaMall Trust said it might exceed its asset target of S$8 billion by 2010. - CNA/ac
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