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Ascendas India Trust (a-iTrust) has entered into a forward purchase agreement with Casa Grande Group to acquire its first industrial facility at Mahindra World City, Chennai.
With a net leasable area of around 0.42 million sq ft, the project is an industrial facility that is pre-leased entirely to Pegatron Technology India Private Limited – a fully-owned subsidiary of Taiwanese-listed contract electronics manufacturer Pegatron Corporation.
“Pursuant to the deal structure, a-iTrust shall provide funding towards the development of the project. Upon completion of the project and fulfilment of other key conditions, a-iTrust shall purchase 100% of the shares of the entity developing the project,” said a-iTrust’s trustee manager.
“Further, a-iTrust has the option to provide additional funding to develop industrial facilities of approximately 0.37 million square feet, subject to leasing milestones and other conditions being met.”
Aside from offering a-iTrust diversification opportunity into the industrial space, the transaction also fits the investment strategy of its trustee-manager to invest in quality industrial and logistics assets.
“The project also offers an opportunity to have a leading manufacturer like Pegatron within our tenant portfolio and support their expansion in India,” said Sanjeev Dasgupta, CEO of the trustee-manager.
Moreover, the transaction is expected to improve earnings and distribution for unitholders, with the pro-forma impact on FY2020 distribution per unit expected “to be an accretion of 0.04 Singapore cents”.
The acquisition brings a-iTrust’s committed portfolio to around 23.2 million sq ft, up 1.9% from around 22.8 million sq ft.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
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