SINGAPORE: CapitaLand India Trust (CLINT) has reportedly entered into a forward purchase agreement with Phoenix Group to acquire prime IT buildings in HITEC City, India, an area in Hyderabad that’s a magnet for major multinational companies.
The Edge Singapore reports that the total leasable area spans 2.5 million square feet (sq ft). This move by CLINT is expected to increase its earnings and boost returns for its Unitholders.
Once everything stabilises, acquiring these strategically positioned assets is set to boost CLINT’s pro forma net profit by a hefty S$4.5 million, with the projected distribution per unit inching up from 6.45 cents to 6.47 cents.
Under the forward purchase agreement, CLINT will fund INR 2.15 billion (S$34.68 million) to clear off the existing loan. In return, it’ll earn interest on the funding at a rate that beats its borrowing cost.
Additionally, CLINT will contribute funds for future building development and acquire them at a price set once each building is constructed and leased up to 90%.
What makes this acquisition even more enticing is its capitalisation rate, which surpasses the market’s average.
Mr Sanjeev Dasgupta, Chief Executive Officer of CapitaLand India Trust Management, said:
“The forward purchase allows us to secure prime assets that will further strengthen our presence in Hyderabad, which has strong leasing demand from multinational companies.
The buildings are situated within the city’s prime IT Corridor in HITEC City and CLINT is well established in this location with a portfolio of approximately 5.2 million sq ft with high levels of occupancy.”
This isn’t CLINT’s first partnership with Phoenix Group. CLINT has partnered with them since 2011, acquiring five buildings totaling around 2.1 million sq ft through a forward purchase agreement. /TISG
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