Ascendas India Trust (a-iTrust), an Indian property trust managed by Singapore-based Ascendas Property Fund Trustee Private Limited, has signed an agreement with Phoenix Infocity Private Limited to acquire its portfolio of five buildings in Hitec City 2 Special Economic Zone, Hyderabad, in a deal valued at Rs 855 crore.
Of these, two of the buildings, with a total super built up area of 4 lakh sq ft completed and fully occupied, will be acquired with immediate effect for Rs 173.9 crore. The other three buildings, with a total area of 18 lakh sq ft, will be acquired as and when each is completed and is leased out. This is expected to be completed in next 4-5 years. The pricing of these three buildings, which is estimated at Rs 680.8 crore, will be based on the net property income achieved at the time of acquisition, an Ascendas statement said.
According to the deal, a-iTrust has the flexibility to acquire the buildings even when they are partially leased, by paying first for what has been leased, and paying for the balance space as and when it is leased.
The Trust will invest in the construction of the buildings, by subscribing to interest bearing convertible debentures during the construction of the buildings, subject to conditions of pre-leasing of the buildings and the trust’s ability to borrow within specified limits.
The Trustee-Manager will be actively involved in the development of the three buildings. The building design and specifications, as well as leases to be entered into, will be reviewed by the Trustee-Manager, the statement said.
Following this deal, a-iTrust’s presence in Hyderabad grows significantly, from the current 1.7 million sq ft owned to 3.9 million sq ft when all of the five buildings are acquired. The acquisition will strengthen a-iTrust’s position to capture the opportunities provided by the rapid growth of India’s IT industry.
“The acquisition is consistent with a-iTrust’s strategy to grow through acquisition and development. Since a-iTrust’s listing in August 2007, we have developed four buildings (two in 2008 and two in 2010), growing the portfolio from an initial 3.6 million sq ft to 5.9 million sq ft today. A fifth building of 0.5 million sq ft will be completed in mid-2011, bringing the portfolio’s completed space to 6.4 million sq ft,” Jonathan Yap, CEO of the Trustee-Manager, said.
“Upon acquisition of all five buildings, a-iTrust’s portfolio of operating space will increase by 34%, from 6.4 million sq ft to 8.6 million sq ft. On top of this, we own land that can yield another 2.5 million sq ft in Bangalore,” he added.
Upon closing the deal, Hitec City 2 SEZ will be renamed aVance Business Hub. The acquisition, subject to certain regulatory approvals and satisfaction of certain conditions by Phoenix, is expected to close over the next 3 months.
Ascendas, Asia’s premier provider of business space solutions, develops, manages and markets IT Parks, industrial parks (manufacturing, logistics and distribution centres), business parks, science parks, hi-tech facilities, office and retail space. Among its flagships are the Singapore Science Park, International Tech Park Bangalore, Ascendas-Xinsu in Suzhou and Dalian- Ascendas IT Park.
In India, a-iTrust is seeded by four IT parks in India, namely the International Tech Park Bangalore, International Tech Park Chennai, and CyberPearl and The V in Hyderabad.