Singapore-listed Ascendas India Trust (a-iTrust) has entered into an agreement with a unit of Arshiya Ltd to develop and acquire one more warehouse in Mumbai for as much as Rs 215 crore ($31.4 million).
The transaction amount includes up to Rs 70 crore in construction funding, the trust said in a statement.
Ascendas Property Fund Trustee Pte. Ltd, which manages a-iTrust, will acquire the warehouse located at the Arshiya Free Trade Warehousing Zone (FTWZ) in Panvel, Navi Mumbai. The warehouse has leasable area of 3,25,503 sq ft.
This is the seventh warehouse at Panvel FTWZ that the trust is buying from Arshiya. In February 2018, a-iTrust had bought six operating warehouses for $83 million.
As part of that acquisition, the trust had also acquired the rights to extend construction funding and acquire additional warehouses to be developed by Arshiya at the 143-acre site that has additional development potential of at least 2.8 million square feet.
The trust said that the latest deal will help it meet incremental demand from existing and prospective tenants following the near-full occupancy of the six operating warehouses.
The trust will lease the additional warehouse to a subsidiary of Arshiya for six years under a master lease arrangement. Arshiya will pay rent to a-iTrust and manage the warehouse.
“The proposed construction funding of the new warehouse, upon completion, will further enhance a-iTrust’s position in the fast-growing logistics sector in India. We are seeing increased tenant demand since our initial acquisition of the six operating warehouses at Panvel FTWZ,” said Ascendas Property Fund Trustee chief executive officer Sanjeev Dasgupta.
The trust was listed on Singapore Exchange in August 2007 as the first Indian property trust in Asia. Its main aim is to own income- producing real estate used primarily as business space in India. It may also develop and acquire land that can be used as business space.
Ascendas also owns seven IT business parks in Bengaluru, Chennai, Hyderabad and Pune.
Earlier this year, CapitaLand bought holding companies of the business of the Ascendas-Singbridge Group, which manages Ascendas Real Estate Investment Trust, Ascendas India Trust and Ascendas Hospitality Trust.