CapitaLand India Trust Management Pte. Ltd., has entered into a forward purchase agreement to acquire a 1.0 million sq ft IT Park located at Outer Ring Road, Bengaluru. CLINT will provide funding for the development of the project as part of the forward purchase arrangement.
The project comprises two buildings with an aggregate net leasable area of approximately 1.5 million sq ft of the project. CLINT proposes to fund the development of the project and subsequently acquire a net leasable area of 1.0 million sq ft ‘Building 1’. The remaining net leasable area of approximately 0.5 million sq ft (‘Building 2’) will be retained by the landowners. The landowners have appointed CapitaLand Services (India) Private Limited (‘CSIPL’) to oversee the design, development and leasing of the project.
During the construction period, CLINT’s investment in the construction of the project will be through debt and internal resources. The forward purchase acquisition will be executed after completion of the construction of Building 1 and is subject to the receipt of the occupancy certificate for Building 1 and the fulfilment of other key conditions.
Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager said, “The proposed acquisition will provide an opportunity to establish our presence in Outer Ring Road, India’s largest office micro-market, which has demonstrated resilient performance during the COVID-19 pandemic. With this acquisition, we will be able to offer our tenants even more office space options across the key markets in Bengaluru.
Pursuant to the deal structure, CLINT will provide funding towards the development of the Project linked to construction milestones over the estimated timeline from 1Q 2023 to 4Q 2025. Over the next 12 months, the funding will be financed through internal resources and the Trustee-Manager expects to utilise debt only from 1H 2024. Upon completion of construction of Building 1 and fulfilment of other key conditions, CLINT will acquire 100% of the issued share capital of Ebisu Techpark Private Limited, the entity which owns and will develop Building 1. The total purchase price for Building 1 is expected to be Rs 12,261 million / S$201.0 million, which includes the funding for the project.
Upon completion, the transaction will increase CLINT’s area under operation in Bangalore from 6.9 million sq ft to 7.9 million sq ft. The project complements CLINT’s existing portfolio in Whitefield (International Tech Park Bangalore) and Hebbal (Gardencity) to offer tenants options across micro-markets and leverages its deep market knowledge and occupier relationships in Bangalore. The Trustee-Manager believes that the transaction will improve the earnings and distributions for unit holders.
As a result of the acquisition of Building 1, CLINT’s portfolio size (inclusive of committed investment pipeline) will increase by 3.6% from approximately 28.0 million sq ft 6 to approximately 29.0 million sq ft.
