Ascendas India Trust to acquire 2 commercial bldgs in Hyd for

Ascendas Property Fund Trustee, the trustee manager of Ascendas India Trust (a-iTrust) today said it will acquire two commercial buildings owned by Phoenix Infocity located in Hitech City in Hyderabad for a consideration of around Rs 1,350 crore.

"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 here.

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 crore.

 

""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 crore," 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 seven buildings to be developed over 5-9 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 the likes of HCL, Cognizant, IBM and Amazon.

"To date, a-iTrust has acquired four buildings aggregating to 1.5 million sq ft. The Trust also has a right of first refusal to acquire four other buildings totalling 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, it is under construction and expected to be completed by the second half of 2019, and 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.