Ascendas Property Fund Trustee, the trustee-manager of Ascendas India Trust has entered into a forward purchase agreement with Phoenix Ventures to acquire two buildings in Hyderabad with a combined leasable area of around 1.85 million sq ft.
The total purchase consideration, inclusive of the construction funding, is not expected to exceed Rs 1,400 crore, Ascendas said in a statement.
“The proposed acquisition of aVance A1 & A2 will allow us to further strengthen our presence in Hyderabad, which is currently witnessing robust rental growth arising from healthy demand from global IT companies,” Sanjeev Dasgupta, CEO, the Trustee-Manager.
The two buildings are in aVance Business Hub 2 located in HITEC City, Hyderabad. a-iTrust will also provide construction funding to the co-developer entities of the two buildings as part of the agreement.
aVance Business Hub 2 comprises 7 buildings to be developed on around 14.4 acres of land. In May 2018, a-iTrust had entered into a master agreement with the vendor to acquire five out of the seven future buildings.
“The location within the city’s prime IT Corridor in Hi-Tec City is contiguous to aVance Business Hub where we own 1.501 million sq ft. This would help our tenants to gain economies of scale while offering their employees access to transportation and proximity to retail and residential hubs,” said Dasgupta.
Ascendas said that the transaction comprises a two-stage process. According to the company, a-iTrust along with its affiliates will first subscribe for debentures issued by the co-developer entities of the two buildings amounting to Rs 795 crore.
It further added that a-iTrust will complete the acquisition via a purchase of 100% of the shares in the co-developer entities once the required leasing criteria is being met in the buildings.
On acquiring aVance A1 & A2 in aVance Business Hub 2, a-iTrust’s current portfolio will increase 10.2% from around 18.1 million sq ft to around 20 million square feet. This Includes, the proposed acquisition of two buildings in AURUM IT SEZ and acquisition of aVance 5 and 6 in aVance Business Hub both announced in May and development pipeline in existing projects.
Source: Economic Times