Ascendas India Trust has announced that it will acquire two commercial buildings in HITEC City in Hyderabad, having a combined leasable area of 1.8 million sq ft.
Ascendas Property Fund Trustee, the trustee manager of Ascendas India Trust (a-iTrust), said that it will acquire two commercial buildings owned by Phoenix Infocity, located in HITEC City in Hyderabad, for a consideration of around Rs 1,350 crores. “Ascendas Property Fund Trustee has entered into a forward purchase agreement with Phoenix Infocity (together with related companies) to acquire two buildings, aVance 5 and 6, with a combined leasable area of 1.8 million sq ft, in aVance Business Hub,” the company said, in a statement.
For this acquisition, a-iTrust, along with its affiliates, will provide construction funding through inter-corporate deposits and debentures issued by the master developer, amounting to Rs 887.40 crores. “a-iTrust will complete the acquisition by buying 100 per cent of the shares in the master developer, once the property achieves 90 per cent leasing. The total purchase consideration, inclusive of the construction funding, is not expected to exceed Rs 1,350 crores,” it said.
In addition to aVance Business Hub, Phoenix has plans to develop aVance Business Hub 2, which sits on 14.4 acres of land and comprises of seven buildings, to be developed over five to nine years and a-iTrust has entered into a separate agreement with the company, to acquire five out of these. “These five buildings will be acquired individually when completed, subject to required leasing levels being met, among other conditions,” it said. aVance Business Hub comprises 10 buildings, with total leasable area of 4.6 million sq ft, of which nine buildings with 3.4 million sq ft have been completed and leased to leading IT companies like HCL, Cognizant, IBM and Amazon.
“To date, a-iTrust has acquired four buildings aggregating 1.5 million sq ft.
“The Trust also has a right of first refusal to acquire four other buildings totaling 1.2 million sq ft,” it said. Commenting on the acquisition, Sanjeev Dasgupta, CEO of the trustee manager said, “This acquisition will allow us to deepen our presence in Hyderabad, which is currently witnessing robust rental growth, arising from healthy demand from global IT companies.” He further said the Trust portfolio will increase to 16 million sq ft, once it completes the acquisition of Aurum IT SEZ and aVance 5 and 6.
“The opportunity to acquire an additional five buildings in future, will allow the Trust to enjoy even greater economies of scale in Hyderabad and further strengthen its competitiveness in the market,” Dasgupta added.
While aVance 5 having a leasable area of 1.16 million sq ft is under construction and is expected to be completed by the second half of 2019, aVance 6 with 6.4 lakh sq ft leasable area is completed and 98 per cent leased to Amazon. “Both buildings will be acquired together, after the completion of aVance 5, subject to required leasing levels being met, among other conditions,” the company said. PTI
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