Broker: OCBC Investment Research
Date of Report: 31 July 2025

CapitaLand India Trust Delivers Robust 1H25 Growth: A Comprehensive Analysis and Outlook

Overview: Strong Performance Fuels Upgraded Outlook

CapitaLand India Trust (CLINT) has emerged as a standout performer among Singapore-listed property trusts, delivering a 9.1% year-on-year increase in its 1H25 distribution per unit (DPU) to 3.97 Singapore cents. This result exceeded expectations, reflecting the trust’s resilient operating metrics, successful asset acquisitions, and strategic expansion into high-growth segments such as data centres and logistics. With its aggressive acquisition strategy and focus on India’s booming IT and digital infrastructure sectors, CLINT is well-positioned to capture ongoing growth opportunities.

Investment Thesis: Riding India’s Economic Tailwinds

CLINT is distinguished by its dynamic acquisition strategy, targeting IT parks and digital infrastructure across India’s major cities—Mumbai, Hyderabad, Bangalore, and Chennai. The trust has diversified into logistics and industrial developments, with a strong developmental pipeline that includes data centres. Its forward-looking approach and ability to secure well-located assets position it as a primary beneficiary of India’s rapid economic expansion, underpinned by:

• Accelerating e-commerce growth
• Increasing data localisation requirements
• Proliferation of digital payments
• Relaxation of the Special Economic Zones (SEZ) Act, reducing occupancy risks for SEZ properties

Financial Highlights: Beating Expectations in 1H25

• 1H25 total property income rose 10% YoY to SGD 149.3 million, net property income (NPI) also up 10% YoY to SGD 113.6 million.
• Income available for distribution reached SGD 59.6 million, up 10.1% YoY.
• DPU of 3.97 Singapore cents for 1H25, translating to an annualised yield of 6.8% based on the last close price of SGD 1.17.
• Committed occupancy stable at 92% (including options and rights of first refusal); rental reversions strong at +9% YoY (except for Pune at -3% due to large leases with rent-free periods).
• Gearing stood at 42.3% as of 30 June 2025; pro forma gearing would improve to 40.1% with recent perpetual securities issuance.
• 77.2% of debt is on fixed rates; average cost of debt dipped 10bps to 5.9%.

Key Financial Table

Valuation Upgrade: Fair Value Raised to SGD 1.44

Due to the strong 1H25 results and positive sector outlook, the fair value estimate for CLINT is raised from SGD 1.23 to SGD 1.44. The upward revision reflects increased DPU forecasts (FY25 up 11.3%, FY26 up 12.1%), a lower cost of equity (now around 9.6%), and a supportive macro backdrop following a 50bps repo rate cut by the Reserve Bank of India.

Operational and Strategic Developments

• Divestments of CyberPearl and CyberVale have been delayed but are expected to close by year-end.
• Divestment of a 33% stake in the data centre portfolio remains on track.
• SEZ Act relaxation continues to drive demand and reduce risk across the trust’s portfolio.

ESG Leadership and Human Capital

• CLINT’s ESG rating was maintained as of December 2024.
• 79.5% of the portfolio certified to green building standards in FY23, versus the industry average of 47%.
• Green leases and sustainable property initiatives are in place.
• Strong staff management practices, outperforming peers in grievance mechanisms and retention, a key challenge in real estate.

Results Highlights: 1H25 vs 1H24

Peer Comparison: How CLINT Stacks Up

Company Profile: CapitaLand India Trust at a Glance

• Listed on the Singapore Stock Exchange since August 2007 as the first Indian property trust in Asia.
• Structured as a business trust, but follows S-REIT restrictions for stable distributions.
• Portfolio includes 11 IT parks, 4 data centre developments, and 3 logistics/industrial facilities across Bangalore, Chennai, Hyderabad, Mumbai, and Pune.
• Total completed floor area: 19.6 million sq ft, valued at SGD 3.4 billion as of 31 December 2024.
• Managed by CapitaLand India Trust Management Pte. Ltd., a subsidiary of CapitaLand Investment.

FY24 Base Rents Breakdown by City and Sector

• By City: Hyderabad 27%, Bangalore 27%, Chennai 18%, Pune 20%, Mumbai 8%
• By Tenant Sector: Technology & Software Development 61%, Electronics/Semiconductors/Engineering 11%, Automobile 6%, Banking & Financial Services 7%, Design/Gaming/Media 3%, Others 8%

Historical Performance: Growth Trajectory

Detailed Company Financials

Key Profitability and Credit Ratios

Potential Catalysts and Risks

• Key Catalysts:
  • Progress on data centre partial divestment
  • Strong outsourcing demand
  • Increased tenant uptake via SEZ denotification
• Key Risks:
  • Failure of forward purchases to meet building specs
  • Delays in data centre development and divestment
  • Unexpected appreciation of SGD against INR

Summary: Attractive Yield and Growth Prospects

CapitaLand India Trust stands out for its robust 1H25 performance, aggressive asset acquisition, and strategic exposure to India’s digital and IT infrastructure boom. With a raised fair value of SGD 1.44 and an estimated 6.8% distribution yield for FY25, CLINT remains a compelling option for yield-seeking investors and those looking for growth exposure to India’s dynamic real estate and technology-driven sectors. The trust’s proactive ESG initiatives, stable credit metrics, and resilient income streams further reinforce its investment appeal in a competitive market landscape.

Report Ratings and Methodology

• OCBC Investment Research fundamental ratings are based on a 12-month investment horizon.
• BUY: Total expected returns (including dividends) in excess of 10% for REITs and Business Trusts.
• HOLD: Total expected returns within +10% and -5%.
• SELL: Total expected returns less than -5%.