New Delhi, May 29 -- Keppel Land, the real estate arm of Singapore-headquartered Keppel Corporation, is looking at diversifying its real-estate portfolio in India by adding a new category of the asset class, multiple people familiar with the development told VCCircle.

Keppel Land traces back its journey in India back in 2003 when it kicked off its maiden project with a housing development in New Town, Kolkata. Since then, the firm has invested and exited several ventures mostly across residential and office segments.

It is now looking at adding data centres in its portfolio to ride the digital infrastructure-push in the country. "They have been trying for some time now and are actively looking at land parcels in the market. While they have not struck a deal as yet, the plan is on to acquire land parcels [towards adding data centres]," one of the persons aware of their plans told VCCircle.

Keppel will take the route of buying land parcels and building the assets grounds up. "This is partly due to their strategy globally and partly due to unavailability of ready assets in the market. Given the recent push for data centres, while there is a lot of interest from builders and investors, there are not ready assets available for acquisition," the second person said.

Both the persons said that a bunch of investment bankers have shown land deals to them but nothing has materialised yet. They added that, directionally, Keppel wants to increasingly take up more office projects and data centres in the country and may go light on the residential side of the market.

An email written to the spokesperson for Keppel Land did not elicit any response till the time of filing this story.

Globally, Keppel is very active in digital infrastructure space. It has a separate vertical - Keppel Data Centres - which manages and operates wholesale and colocation data centres across Asia-Pacific and Europe. It has presence across Australia, China, Indonesia, Japan, Malaysia and Singapore, and several countries in Europe.

Keppel is also raising a dedicated pool of capital for its data centre business and recently hit first close of Keppel Data Centre Fund III (Fund III) in April last year.

"Keppel's first data centre fund, launched in 2017 with an equity size of around $1 billion, has delivered high-teens realised returns to the satisfaction of our Limited Partners (LPs)," Lee Hui Fang, Keppel's Deputy chief investment officer, Data Centres, said in a statement last year.

"Our second vintage of a similar size was launched at the height of COVID in 2020 and is now fully committed to projects. With Fund III, we are stepping up the game with a target to raise $2 billion to invest in a portfolio of AI-ready hyperscale data centres across Asia Pacific," he said.

As per the company statement, in the past six years, Keppel's data centre portfolio has grown about 2.7 times from 240 MW in 2018 to 650 MW in 2024 - most of these assets are located in the Asia Pacific region, as well as Europe. In the next few years, the company aims to almost double this to 1.2 GW, harnessing investment capital from new initiatives such as Fund III and other co-investors.

Keppel also runs and manages a data centre-focussed REIT named Keppel DC REIT, the first data centre real estate investment trust listed in Asia. The REIT absorbs assets of the funds, periodically.

Meanwhile, in India, Keppel Land has recently divested two office assets. It divested 51 percent stake in TenSteps, a 1.1 million sq ft office development in Pune, to Prime Offices Fund (PRIME), a commercial real estate-focussed fund managed by Nuvama and Cushman & Wakefield Management Private Limited (NCW). It also struck a deal with Prime Offices Fund to sell its office park One Paramount in Porur, Chennai for about 2,750 crore.

Its current India portfolio includes an office tower in Bengaluru, a residential project in Thane with Rustomjee, investment in Smartworks, a co-working company and Cleantech Solar.

Published by HT Digital Content Services with permission from VC Circle.