Singapore-based multinational CapitaLand-backed Ascendas Firstspace is gearing up to raise over $300 million for its third industrial and logistics real estate fund. The proposed fund will see participation from a consortium of limited partners (LPs), including Singapore’s Temasek Holdings, sovereign wealth funds, and overseas pension funds, according to sources familiar with the development.
Discussions are underway; details of the third fund are expected to be finalised over the next six to 12 months. Investments will primarily focus on greenfield logistics and industrial infrastructure developmnent in India.
Temasek has been a partner in two previous funds of Ascendas Firstspace – Fund I and Fund II – each being of $300 million, and in various stages of deployment. It could be amongst the probables, those in the know said.
According to Aloke Bhuniya, CEO, Ascendas Firstspace Development Management, discussions are underway, and “Fund – III would be larger than the previous two funds”. Talks are on with some ‘limited partners’, and “details would be finalised soon”.
Limited partners
Typically, limited partners (LPs) are investors in private equity or venture capital funds who provide capital but have limited liability and don’t participate in the fund’s day-to-day management. They are essentially passive investors who contribute capital to the fund and expect returns on their investment.
“Talks are on with some pension funds, sovereign wealth funds, limited partners and some of the older investors too,” he told businessline. He did not mention, if Temasek would invest or on the fund-size.
“We would primarily look at greenfield projects in the logistics and industrial segment that include warehousing projects. However, we are not ruling out the probability of taking up ready assets (or acquisitions in the space),” Bhuniya said. Indicating that there remains lack of investible institutional stocks in the segment.
Research firm, KnightFrank said, PE investments into Indian real estate declined by 41 per cent year-on-year in H1 2025, driven by tighter global capital conditions, muted risk appetite, and lack of large transactions. Warehousing (investments) dropped to just $50 m, falling behind all segments for the first time since 2018. This reversal of warehousing’s dominance (it drew $ 1.53 b in H1 2024) signals lack of institutional-grade stock at scale, it said. Asia-based investors gained share, supported by lower home market yields and more flexible return expectations.
Previous funds
According to Bhuniya, the first two funds – Fund I and Fund II - have mostly opted for greenfield development because of higher rate of returns coming from such projects, as compared to acquisitions or take-over of ready assets. “In case, there is a similar return on investment (versus greenfield development) from an acquisition, we can explore it too,” he added.
Between the first two funds, Ascendas Firstspace is looking to develop 26 million sq ft of industrial and logistics space, across 15 ongoing projects. Nearly 12 million sq ft of space has been leased out (ready) and another 14 million sq ft is under construction. Some of the cities where these projects are located include Chennai, Bengaluru, Kolkata, NCR, MMR, Pune and elsewhere. The first fund has been fully deployed.