CapitaLand India Trust Announces Strategic Divestment of Data Centre Assets and Formation of Joint Venture

Key Highlights of the Announcement

• CapitaLand India Trust (CLINT), through its trustee-manager CapitaLand India Trust Management Pte. Ltd. (CLINTMPL), has entered into agreements to divest a 20.2% stake in three major data centre assets in India to CapitaLand India Data Centre Fund Pte. Ltd. (CIDCF) subsidiaries.
• The transaction was formalized on 30 December 2025 and involves the creation of a joint venture structure, with CLINT retaining a significant 79.8% interest in these assets upon completion.
• The divestment will unlock asset value, improve distribution per Unit (DPU), enhance capital recycling, and strengthen CLINT’s financial agility.
• The total consideration for the divestment and subscription is estimated at INR 7,021 million (S\$99.7 million), reflecting a 13.7% premium over the independent valuation of the data centre assets.
• The net gain from the transaction is estimated at INR 8,656 million (S\$123.0 million).
• The transaction is classified as a “discloseable transaction” under Chapter 10 of the SGX Listing Manual, with no requirement for Unitholder approval.
• CLINT will gain strategic participation rights in future data centre investment opportunities managed by CapitaLand affiliates.

Details of the Transaction

On 30 December 2025, CLINT’s wholly-owned subsidiary, Ascendas Property Fund (India) Pte. Ltd. (APFI), signed securities purchase and subscription agreements with the respective CIDCF subsidiaries to divest 20.2% of its stake in the following three data centre assets:

The transaction involves both the sale of equity shares and compulsorily convertible debentures (Sale Securities) and the subscription by the Purchaser SPVs for additional securities (Subscription Securities and Rupee Denominated Bonds/Debentures (RDBs)) in the respective data centre SPVs.

Upon completion, CLINT’s effective interest in the data centre assets will be reduced to 79.8%, with an option for CIDCF to increase its stake up to 49.0% over time, subject to certain conditions and, if required, Unitholders’ approval.

Financial Details and Use of Proceeds

• Total Consideration: Estimated at INR 7,021 million (S\$99.7 million), based on 20.2% of the total enterprise value of INR 51,973 million (S\$738.2 million), subject to adjustments for liabilities, working capital, and capital expenditure.
• Net Proceeds: After deducting estimated transaction costs (INR 378 million / S\$5.4 million) and capital gains tax (INR 718 million / S\$10.2 million), net proceeds are expected to be INR 5,926 million (S\$84.2 million).
• Use of Proceeds: Proceeds will primarily be used for redemption of RDBs, potential debt repayment, reinvestment in higher-yielding projects, and/or enhancement of Unitholder distributions.
• Estimated Net Gain: INR 8,656 million (S\$123.0 million).

Strategic Rationale and Expected Benefits

• Unlocking Value: The transaction allows CLINT to realize a premium on its data centre assets, enhancing returns to Unitholders.
• Improved Distribution per Unit (DPU): If proceeds are used to repay debt, DPU is forecast to increase by approximately 5% on a FY2024 pro forma basis (from 6.84 to 7.19 Singapore cents).
• Capital Recycling: Supports CLINT’s ongoing strategy to recycle capital, following recent divestments of business park assets such as CyberVale and CyberPearl in 2025.
• Financial Agility: Strengthens CLINT’s balance sheet, enabling redeployment of capital to reduce debt, invest in income-generating assets, or meet corporate needs.
• Future Growth Options: CLINT secures participation rights in future data centre investment vehicles managed by CapitaLand affiliates, allowing up to a 33% commitment in new opportunities.
• Joint Venture Structure: The joint venture arrangements provide governance rights, reserved matters, and exit mechanisms for both CLINT and CIDCF, including options for IPO or third-party sale.

Key Terms and Shareholder Considerations

• Simultaneous Completion: All divestment and subscription transactions across the three data centre SPVs will complete at the same time; failure to complete any one will terminate the others.
• Reserved Matters and Governance: Major decisions at the data centre SPVs require unanimous approval from both APFI (CLINT) and Purchaser SPVs (CIDCF).
• Exit Options for CIDCF: Includes rights to initiate an IPO, third-party sale, put option at independent valuation, and drag-along rights under certain circumstances.
• Participation Rights: CLINT and its affiliates can invest up to 33% in future data centre investment platforms launched by CapitaLand Fund Management or its affiliates.
• No Unitholder Approval Required: The transaction is classified as a “discloseable transaction” (relative size at 6% of market cap), with no Unitholder approval required as it does not exceed relevant thresholds nor involves Unit issuance.

Potential Price Sensitive Information

• The transaction unlocks significant value at a premium to valuation, boosts DPU, and enhances NAV per Unit (from S\$1.38 to S\$1.41 pro forma).
• Strengthens CLINT’s balance sheet and financial flexibility, positioning it for further growth and capital management initiatives.
• Secures future growth rights in India’s expanding data centre sector via participation rights in new investment platforms.
• Provides clear governance and exit mechanisms for both CLINT and its JV partner, reducing long-term risk.

Directors’ and Major Shareholder Interests

Certain directors of the Trustee-Manager hold Units and shares in CapitaLand Investment Limited (CLI). CLI itself has a deemed interest in 25.17% of CLINT’s issued Units. There are no other material interests from directors or controlling Unitholders in the transaction.

Conclusion

This strategic transaction marks a significant milestone for CapitaLand India Trust, delivering value accretion, improved distributions, and enhanced capital flexibility, while positioning the Trust to capture future growth in India’s burgeoning data centre market. The premium realized on divestment, improved financial ratios, and future participation rights are all likely to be viewed positively by investors and may have a material impact on CLINT’s share price.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should consult their financial advisors before making any investment decisions. The future performance of CapitaLand India Trust is subject to market risks and uncertainties. Past performance is not indicative of future returns.

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