CapitaLand India Trust converts S$204m in debt to rupees to hedge forex risk

CapitaLand India Trust has shifted S$204 million of Singapore-dollar debt into rupee borrowings in 2026 to reduce foreign exchange exposure as the Indian currency weakens. The move has boosted distribution-per-unit accretion by nearly 5 per cent. About 53 per cent of the trust's S$1.7 billion debt i

CapitaLand India Trust (CLINT) is converting more Singapore-dollar debt into rupee borrowings as the Indian currency weakens, aiming to reduce foreign exchange exposure and boost distributable cash flows. The trust has completed two debt-onshoring tranches worth about S$204 million in 2026, lifting cumulative distribution-per-unit accretion from the exercises to nearly 5 per cent.

As of June 2026, CLINT — which manages around 22 million sq ft across Bangalore, Chennai, Hyderabad, Pune and Mumbai — had approximately S$1.7 billion of borrowings. Its assets under management stood at S$3.5 billion. About 53 per cent of the debt is already aligned to the Indian rupee, comprising 29 per cent of onshore INR debt and a further 24 per cent that is economically hedged into INR through structures in Singapore, leaving about 47 per cent exposed to foreign currency movements.

“Our debt onshoring programme is part of a broader capital management strategy to progressively align our funding structure with the markets in which we operate,” said Gauri Shankar Nagabhushanam, CEO of CapitaLand India Trust. “Given that our assets and cash flows are primarily generated in India, increasing the proportion of rupee-denominated debt allows us to better match our liabilities with our underlying business exposure.”

The first tranche completed in January 2026 contributed approximately 3.4 per cent accretion to DPU, while the second tranche in July 2026 added a further 1.6 per cent, taking the cumulative DPU accretion close to 5 per cent. Nagabhushanam said the programme also increases distributable cash flows for unitholders. CLINT reported an 8 per cent year-on-year increase in distributable income to S$64.2 million for the six months ended 30 June 2026, driven by contributions from newly completed developments, stronger operating performance and higher interest income.

CLINT’s 1H 2026 DPU increased 13 per cent year-on-year in INR terms but, because of depreciation of the Indian currency, rose only 1.0 per cent year-on-year in Singapore-dollar terms to 4.00 Singapore cents. On an annualised basis, the DPU translates to a distribution yield of 7.9 per cent based on the closing price of S$1.02 as at 30 June 2026. Total property income in 1H 2026 decreased 8 per cent year-on-year to S$137.6 million and net property income declined 5 per cent to S$107.5 million in Singapore-dollar terms. In INR terms, total property income rose 3 per cent to INR 9.9 billion and NPI increased 6 per cent to INR 7.8 billion, while the NPI margin improved to 78.1 per cent from 76.1 per cent.

CLINT’s portfolio includes eight IT business parks, three industrial facilities, one logistics park and four data centre developments in India. The trust recently divested two major IT park assets — CyberVale in Chennai and CyberPearl in Hyderabad — for approximately Rs 1,103 crore, while CapitaLand sold a 1.9 million sq ft commercial property in Gurugram to EAAA Alternatives for Rs 2,050 crore as part of ongoing capital recycling.