Interview: Mr Jonathan Yap
Assistant Group Chief Executive Officer, Overseas Funds, Chief Executive Officer, India.
In term of its projects, how is Ascendas doing in India ?
We started with information technology, or IT, parks and after achieving considerable success and have now moved into setting up industrial townships. We are currently developing a 1,450 acre industrial township called, OneHub Chennai, 50km south of Chennai city centre in Tamil Nadu.
Ascendas’ association with India dates back over two decades when it first ventured into India and developed the first IT park of its kind in India. This was the 69-acre IITB or International Tech Park Bangalore.
Those were the days when the company not only stabilized its own operations but also set benchmarks for future IT Parks by bringing in technologies and services which other developers could emulate, including the state government.
The company has now grown by leaps and bounds. Its portfolio consists of seven IT Parks operational across five key cities in India – Bangalore, Chennai, Hyderabad, Pune and National Capital Region of Delhi.
What is average business growth experienced by Ascendas since it ventured into India?
We currently manage close to 10 million sq ft of completed business space and our asset size is valued at S$1.8 billion (INR 8,600 crores). Ascendas caters to over 350 multinational clients across its IT parks that employ more than 85,000 professionals.
It started with just 69 acres in Bangalore in 1994 and now has more than 500 acres, or 618 hectares, of development land under its management, spread across five cities.
Ascendas invests in Indian real estate directly as well as through the funds that it manages. Beyond developing business space, it has also expanded its business to cover real estate funds management, with a portfolio of listed and private funds that enable like-minded investors to participate in India’s economic growth.
Ascendas’ IITB
Can you elaborate on the funds that Ascendas is managing?
Currently Ascendas is managing three India specific funds:
Ascendas India Trust (a-iTrust), Asia’s first Indian property trust listed since August 2007.
Ascendas India Development Trust (AIDT), a private development fund for large integrated green field developments.
In November 2013 the Ascendas India Growth Programme, or AIGP, was launched with Singapore’s sovereign wealth fund, GIC Private Limited, as a principal investor.
What is Ascendas’ advice to Singaporean investors who are eyeing India?
Some of the challenges that come with investing in India include inconsistent governmental policies that mar investment decision making, the lack of infrastructure and requirements relating to various tiers of governance. Hence, businessmen should be mindful of these when investing in India.
Operating in overseas markets has its challenges. For India, both local and foreign investors would like to see more consistent policy making and its implementation by the government. There is also room for greater corporate governance and transparency.
Finally, like all developing countries, India would need to develop proper infrastructure like roads, utilities and transportation to facilitate better business productivity and living conditions.
However, Ascendas has full faith in the potential of doing business in India and holds a long term investment view. Given the cultural affiliation and active government to government ties, Singapore is a logical base from which foreign investors access India. Similarly, we have also seen expansion of Indian businesses while accessing Asian capital through Singapore.
How do you think is the Indian government helping investors?
The new government at the Center has taken initiatives towards reforms in economic policy.
As far as the real estate industry is concerned, recent developments such as relaxation in Foreign Direct Investment norms for the sector, introduction of REITs, plans to boost infrastructure and develop smart cities, offers to manufacturers to ‘Make in India’, have strengthened the confidence of businessmen.
The central government has already reached out to the business community by initiating major reforms such as simplifying regulatory approvals, reforming labor laws and changing rules for acquisition of land.
However, the delay in approvals amid complicated processes, unavailability of clear land titles and suitable land that can be developed with basic infrastructure, lack of transparency, uncertain SEZ guidelines, absence of infrastructure status for real estate sector are some of the roadblocks that need to be removed.
What is the potential of the Indian market?
For Ascendas, India remains a vibrant market with strong potential for growth. Since India has a competitive and qualified labor force, global companies will continue to choose the country to conduct their businesses. This is one of the reasons which has contributed to the astounding success of our completed IT parks in India.
As India moves up the industry value chain, the country’s IT industry continues to grow and now provides cutting-edge services in software development as well as research to global technology companies.
While Ascendas continued to invest in and grow its IT parks, the company couldn’t help but notice India’s desire and potential to expand the manufacturing sector. There is strong demand for good quality industrial space and our project OneHub Chennai, currently under development, aims to satiate this hunger.
How has Ascendas improved the overall quality and standards of projects, properties in India?
The need for quality business space with world-class amenities is paramount. Ascendas works with qualified partners to make its IT Parks successful. We have developed a niche in our range of IT Parks, and as part of our product offerings we have on-site infrastructure to provide for a total work-live-play environment where our tenants can enjoy a unique business lifestyle within the campus.
In addition to ensuring the quality of the space and various amenities, we also focus on property management, customer services and asset enhancement through a dedicated in house team.
As I mentioned earlier, ITPB became the benchmark for other IT parks in India. It is one of the most successful IT parks in the country. The park played a pioneering role in the growth of IT parks in India, and the development of Whitefield as the leading hub for Information Technology.
To ensure uninterrupted power supply, ITPB invested in a dedicated power plant. This has ensured that its clients would be free from fluctuations in power. Ascendas has also started a bus service that covers more than 80 routes to and from the park.
The park is supported by facilities such as gym, sports area, hotel, retail mall with food courts, coffee shops, banks and convenience stores.
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