CapitaLand India Trust Delivers Robust 3Q 2025 Results: Strategic Divestments, Data Centre Expansion and Strong Rental Growth Signal Further Upside

Highlights from Q3 2025: Financial Performance and Operational Excellence

• Total Property Income: Up 10% YoY to S\$225.2 million for YTD September 2025.
• Net Property Income: Up 10% YoY to S\$172.1 million.
• Committed Occupancy: Stable at 91%, with certain assets at 100% occupancy.
• Rental Reversion: Strong 15% increase, with particular strength in Hyderabad (+33%) and Bangalore (+20%).
• Gearing Ratio: Reduced by 1.4 percentage points YoY to 40.9%, reflecting improved balance sheet flexibility.
• Average Cost of Debt: Stable at 5.8%.
• Portfolio Optimisation: Divestment of CyberPearl and CyberVale at a 3% premium to valuation, unlocking S\$158.8 million in net proceeds.
• Data Centre Expansion: Inauguration of Navi Mumbai DC Tower 1, fully leased to a global hyperscaler; Tower 2 in advanced negotiations.

Price-Sensitive Developments

1. Strategic Divestments and Capital Recycling

CapitaLand India Trust (CLINT) completed its first-ever asset divestment, selling CyberPearl and CyberVale in September 2025. The transaction delivered a 3% premium to valuation and a recorded divestment gain. Net proceeds of INR10.8 billion (S\$158.8 million) have been earmarked for debt repayment, reinvestment in higher-yielding projects, and/or distribution enhancement for unitholders. This move is highly price-sensitive as it reduces gearing, improves returns (Internal Rate of Return: INR 19.1%, SGD 13.9%), and signals further capital recycling potential.

2. Data Centre Growth – New Income Streams

CLINT’s maiden data centre (DC) development in Navi Mumbai is now operational. Tower 1 is fully committed to a leading global hyperscaler under a long-term agreement, with Tower 2 in advanced negotiations for similar terms. The property boasts a power capacity of 50MW (Tower 1) and 55MW (Tower 2), and IT load of 33.7MW and 37MW respectively. These high-value, long-tenure DC leases are likely to provide stable, growing cash flow and could drive further share price upside.

3. Aggressive Development and Forward Purchase Pipeline

CLINT has an extensive pipeline of committed developments and forward purchases, totalling 7.3 million square feet (SBA) and over S\$1 billion in consideration. Notable projects include Ebisu (Bangalore, 1.2m sq ft, 100% pre-committed), aVance Business Hub 2 (Hyderabad, 1.4m sq ft), and Gardencity (Bangalore, 1.7m sq ft). The completion timeline stretches to 2028, indicating sustained future growth and income.

Operational and Portfolio Strength

• Tenant Diversification: 302 tenants, with the largest tenant at 12% of base rent. Top 10 tenants contribute 43% of base rent, spanning IT, electronics, healthcare, BFSI.
• Geographical Spread: Bangalore (31%), Hyderabad (25%), Pune (19%), Chennai (17%), Mumbai (8%) by base rent.
• Lease Expiry Profile: Weighted average lease term of 3.6 years, expiry of 6.7 years. Over 60% of leases expiring in 2025 are either renewed or highly likely to be renewed – a strong risk mitigant.

Capital Management and Currency Hedging

• Diversified Debt Portfolio: Effective borrowings of S\$1.76 billion, average term to maturity 2.5 years. 62% of loans are sustainability-linked; 77.2% at fixed interest rates.
• Available Debt Headroom: S\$780 million, supporting growth plans.
• Currency Hedging: At least 50% of debt in INR, with offshore S\$ loans hedged via derivatives; income repatriation is actively hedged via forward contracts.

Growth Levers and Track Record

• Portfolio Growth: Portfolio size has increased more than 5x since IPO, with 11% CAGR in floor area.
• Distribution per Unit (DPU): 10-year CAGR of +6% (INR) and +4% (S\$), maintaining upward momentum.
• Prudent Capital Management: Proactive divestments, onshore financing, and joint ventures to fund expansion, particularly in the data centre segment.

Macro Risks and Opportunities

• US-India Trade Tensions: The US imposed 50% tariffs on India from August 2025. While the US accounts for 18% of India’s exports, only ~2% of GDP is dependent on US demand. This may elevate sector volatility but is mitigated by CLINT’s diversified tenant base and focus on domestic growth.
• H-1B Visa Fee Hike: A new US\$100,000 fee for H-1B applications could increase the pool of high-skilled tech talent in India, potentially driving local demand for office and data centre space.
• GST Reform: India’s GST reform is expected to simplify the tax structure, which could enhance ease of doing business and support real estate demand.

Summary: Why This Update Is Price-Sensitive and What Investors Need to Watch

CLINT’s Q3 2025 update is rich with price-sensitive developments. The first-ever asset divestment at a premium, rapid expansion into data centres with full pre-commitment, aggressive growth pipeline, robust rental reversion, and prudent capital management collectively point to enhanced income, lower risk, and greater distribution potential. These factors could catalyse further share price appreciation. Investors should closely monitor progress on DC leasing, future divestments, and macroeconomic developments that may impact tenant demand.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Actual outcomes may differ materially from forward-looking statements due to market conditions and other risks. Investors should conduct their own due diligence or consult a financial advisor before making investment decisions.

View CapLand India T Historical chart here