Singapore-listed Ascendas India Trust will purchase two buildings in an IT park at Navi Mumbai as part of efforts to diversify its portfolio of office assets in the South Asian nation.
Ascendas Property Fund Trustee Pte. Ltd, which manages the trust, has signed a pact with Aurum Platz Pvt. Ltd for the buildings at the Aurum IT SEZ, the trustee said in a disclosure.
The deal value is not likely to exceed Rs 930 crore ($137.5 million). The final price 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 will also provide construction funding to Aurum as part of the deal.
The acquisition marks Ascendas’ foray into the IT park business in Navi Mumbai, said Sanjeev Dasgupta, CEO at Ascendas Property Fund Trustee. The acquisition will diversify the firm’s portfolio and is likely to contribute positively to its financial performance, he added.
According to the disclosure, Mumbai’s share in Ascendas’ India portfolio will rise to 16% from 7% after the deal concludes. The share of Bangalore will drop three percentage points while that of Hyderabad, Chennai and Pune will fall two percentage points each.
The two buildings have a built-up area of 1.4 million square feet. The acquisition will increase the operating space in Ascendas India Trust’s portfolio to 14.2 million sq ft from 12.8 million sq ft.
Giving details of the planned acquisition, Ascendas said the trust will first subscribe to non-convertible debentures issued by the developer amounting to Rs 501.2 crore. The acquisition will be completed by buying 100% shares of the developer based on certain leasing milestones or two years from the completion date.
The first building is likely to be completed by the second half 2018 and the second by early 2020, it said.
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.
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