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Ascendas India Trust (a-iTrust) said on Monday (21 May) that it has entered into a forward purchase agreement to acquire two buildings at aVance Business Hub in HITEC City, Hyderabad for up to INR 13,500 million (S$270 million).
The properties, known as aVance 5 and 6, collectively measure 1.8 million sq ft. Both will be acquired from Phoenix Infocity, the master developer of aVance Business Hub, which comprises 10 buildings with a combined leasable space of 4.6 million sq ft.
Only aVance 5 (1.16 million sq ft) is still under construction, while all the rest of the buildings have been completed, including aVance 6 (0.64 million sq ft), which is 98 percent occupied by e-commerce giant Amazon.
As for the other eight properties, four totalling 1.5 million sq ft are already under the control of the trust, while it has right of first refusal over the remaining four totalling 1.2 million sq ft.
Under the deal, a-iTrust will provide construction funding by providing inter-corporate deposits and subscribing to debentures issued by the master developer amounting to INR 8,874 million (S$177.3 million).
Subsequently, aVance 5 and 6 will be purchased together once their occupancy level reaches 90 percent by acquiring the master developer’s entire stake in them for up to $270 million, inclusive of the construction funding provided.
But if aVance 5’s completion is delayed beyond March 2020, or due to other occurrences stipulated in the deal, a-iTrust will have the right to call for the redemption of the debentures.
At the same time, the trust inked a separate deal with Phoenix Infocity to buy five upcoming buildings in the neighbouring special economic zone of aVance Business Hub 2, which houses a total of seven properties. These five will be bought individually when completed, subject to certain occupancy rates being achieved, amongst other conditions being met.
“The proposed acquisition of aVance 5 and 6 will allow us to deepen our presence in Hyderabad, which is currently witnessing robust rental growth arising from healthy demand from global IT companies,” said Sanjeev Dasgupta, CEO of Ascendas Property Fund Trustee.
“The trust portfolio will increase to 16 million sq ft once we complete the acquisition of AURUM IT SEZ and aVance 5 and 6,” he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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