CapitaLand India Trust ramps up fundraising for local bonds and targets $1 billion debt shift as divestments drive expansion

CapitaLand India Trust (CLINT) is accelerating its India-focused capital strategy by significantly expanding onshore debt fundraising, carrying out selective asset divestitures and strengthening its acquisition pipeline, even as it posted strong operating and financial performance for FY2025.The Singapore-listed real estate investment trust said it expects to raise between US$500 million and US$700 million in onshore debt over the next two to three years, an expansion from its current onshore debt of S$300 million and a shift in its financing strategy.

“The shift to domestic borrowing is expected to improve cash flows and distributions. The trust estimates that the inaugural bond issuance alone will deliver an increase of about 3.8% in distribution per unit (DPU) through withholding tax savings and improved tax deductibility of interest expense,” CEO Gauri Shankar Nagabhushanam said, emphasizing a shift to rupee financing to hedge currency risks and improve tax efficiency.
CLINT completed its maiden onshore bond issuance of Rs 915 crore (approximately S$130 million) on January 2, 2026, marking a major milestone in its capital restructuring journey. The three-year bond, rated AAA by Crisil and priced at 7.25%, will mainly be used to refinance existing Singapore debt.

“Currently, only 16% of CLINT’s loan portfolio is onshore, but the trust plans to increase this to 40-50% over the next three to four years, strengthening natural currency hedging and reducing financing costs. This move also eliminates the 15% withholding tax applicable on foreign loans and allows full interest deductions, improving after-tax borrowing efficiency,” he said.

The trust has already started building its domestic funding base through sustainability-linked loans worth about S$2.1 billion and perpetual securities issuances, signaling a broader diversification of funding sources.

CLINT has also strengthened its capital recycling strategy in 2025, implementing the divestment of its first office assets in India. The trust sold CyberPearl in Hyderabad and CyberVale in Chennai at a blended cap rate of about 8.35%, unlocking value from mature or non-core assets. In addition, CLINT announced the divestment of a 20.2% stake in three data center developments to the CapitaLand India Data Center Fund for approximately Rs7 billion (S$99.7 million). The transaction was executed at a premium of 13.7% to independent valuation, with an estimated net profit of approximately Rs 8.6 billion.“The divestments are in line with the trust’s strategy to recycle capital into assets with higher returns or growth, while maintaining exposure to India’s fast-growing data center segment through majority stakes and participation rights in future investments,” Nagabhushanam said.

The trust aims to generate approximately S$100 million in divestment proceeds annually, subject to market conditions and visibility of the investment pipeline. CLINT said divestment decisions will remain opportunistic, driven by relative yield spreads and rebalancing opportunities.

The trust has a future acquisition pipeline of 7.3 million square feet expected to be completed over the next three to four years. Recently, CLINT entered into an agreement to acquire a 1.1 million sq ft office project at Nagawara in Bengaluru, further strengthening its presence in key office markets.

In addition, CLINT is executing internal development and redevelopment projects, including expansion at International Tech Park Bengaluru and asset redevelopment in Hyderabad. The trust currently owns 3.7 million sq ft of development potential in Bengaluru and Hyderabad.

“Data centers remain a strategic growth sector, supported by strong demand for hyperscalers and supportive policy measures. The trust maintains a balanced portfolio allocation, targeting around a third exposure to non-office assets such as data centers and logistics,” he said.

For FY2025, CLINT’s total property revenues increased 6% year-on-year to S$294.4 million and net property income rose 9% to S$224.9 million. Available for distribution revenues increased 23%, driven by improved operating margins and rental momentum. Unit distribution increased 15% year-on-year to 7.87 Singapore cents, supported by strong rental turnover of 21% and stable portfolio occupancy of 91%.

The trust’s portfolio valuation rose to Rs 266.4 billion, driven by leasing demand and increased exposure to fast-growing data center assets.

Going forward, CLINT plans to pursue a dual strategy of acquisitions and divestitures, supported by aggressive domestic fundraising and development-led expansion. The company said its focus will continue to be on improving distribution, improving portfolio quality and maintaining disciplined capital deployment as India’s commercial real estate and digital infrastructure sectors continue to grow.