Singapore-listed Ascendas India Trust has decided to purchase two buildings in an information technology special economic zone in Hyderabad, months after agreeing to buy five buildings in the same office park.
Ascendas Property Fund Trustee Pte. Ltd, which manages the trust, has signed a pact with Phoenix Ventures Pvt. Ltd for the buildings at the aVance Business Hub 2, the trustee said in a disclosure.
The two buildings, aVance A1 and A2, have a combined leasable area of 1.85 million square feet.
The aVance Business Hub 2 has a total of seven buildings. Ascendas had agreed to buy five of those in May. It had separately decided to buy two buildings in the aVance Business Hub.
As part of the latest agreement, Asendas said it will also provide construction funding to the buildings’ developers, Phoenix Infrasoft India Pvt. Ltd and Phoenix Infraspace India Pvt. Ltd.
The deal value is not likely to exceed Rs 1,400 crore ($204.5 million), inclusive of the construction funding. The final amount will be determined based on a pre-agreed formula which takes into account key factors such as rent, occupancy and capitalisation rate, Ascendas said.
Ascendas said the trust will first subscribe to non-convertible debentures issued by the co-developers amounting to Rs 795.8 crore. It will buy 100% shares of the co-developers when the buildings meet the required leasing criteria.
Phoenix Ventures is part of the Hyderabad-based real estate developer Phoenix Group. In 2017, VCCircle reported that Phoenix Group had raised funding from Motilal Oswal Real Estate for some commercial projects.
“The proposed acquisition of aVance A1 and A2 will allow us to further strengthen our presence in Hyderabad, which is currently witnessing robust rental growth arising from healthy demand from global IT companies,” said Sanjeev Dasgupta, CEO at Ascendas Property Fund Trustee.
According to the disclosure, the acquisition will increase the operating space in Ascendas India Trust’s portfolio to 20 million sq ft from 18.1 million sq ft.
Ascendas Property Fund Trustee is a unit of Singapore-based Ascendas-Singbridge Group. Ascendas India Trust was listed in August 2007. Its main aim is to own income-producing real estate used primarily as business space in India.
It has a portfolio of seven IT business parks and six warehouses in India. These include the International Tech Parks in Bengaluru and Chennai, CyberVale in Chennai and Arshiya warehouses near Mumbai.
In May, Ascendas India Trust had agreed to buy two office buildings at the Aurum IT park in Navi Mumbai.