CAPITALAND India Trust : CY6U 0% (Clint) is buying three industrial facilities in OneHub Chennai, located in India, on a forward-purchase basis from Casa Grande Group.

On Monday (Feb 5), its trustee-manager said the total transaction cost of 2.7 billion rupees (S$43.2 million) includes the partial funding for the lease of the project land, as well as full funding for the project’s development.

From February 2024, Clint will provide funding for the project of up to 1.9 billion rupees across three phases.

It will acquire the facilities upon completion of the construction of each phase, which is subject to a six-month stabilisation period for leasing.

Each phase of the project will be developed by separate special purpose vehicles (SPVs) established by Casa Grande. These SPVs will be acquired by Clint at purchase prices that also account for pre-agreed capitalisation rates, rentals and leasing levels.  

Spanning about 8 ha of leasehold lands with a renewable lease tenure of 99 years in total, the project is slated for completion in three phases over four years.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

Over the land’s total net leasable area of 790,000 square feet (sq ft), Phase 1 of the project covers 480,000 sq ft, while Phase 2 is made up of 160,000 sq ft. Another 150,000 sq ft of land comprises Phase 3 of the project.

Clint’s trustee-manager said the development of Phase 1 will commence in February 2024, with completion slated for the first half of 2025.

It expects the forward purchase of these facilities to increase Clint’s floor area of industrial, logistics and data centre asset classes to 14 per cent of the trust’s committed pipeline, from 12 per cent currently.

In the trustee-manager’s view, its forward purchase of the three facilities in OneHub Chennai is priced attractively considering current market capitalisation rates.

It expects the acquisition to improve Clint’s earnings and distributions for unitholders, while offering the trust further diversification into the industrial asset class.

Pro-forma profit

Assuming that the transaction was 45 per cent funded by debt and 55 per cent using equity, and also factoring in income generated from the project on a stabilised basis, Clint’s trustee-manager estimates a FY2023 pro-forma attributable net profit of S$2.1 million from the acquisition.

This would have lifted Clint’s FY2023 pro-forma distribution per unit to S$0.0648 from S$0.0645, with no effect on net asset value per unit, which would remain at S$0.0116.

Highlighting OneHub Chennai as an “established industrial township with plug-and-play infrastructure” Sanjeev Dasgupta, chief executive of the trustee-manager, said the acquisition would also enable Clint to offer its tenants “high-quality facilities” at the project.

“With our forward purchase agreements, we have a pipeline of industrial assets at strategic locations, allowing us to capitalise on the growing demand from global companies looking to set up industrial facilities in India.”

Units of Clint closed Friday S$0.03 or 2.8 per cent higher at S$1.09.