CapitaLand India Trust acquires pair of Chennai assets for 1.8 billion rupees

CAPITALAND India Trust : CY6U 0% (Clint) has acquired two industrial facilities in Mahindra World City, Chennai, for 1.8 billion rupees (S$28.7 million) – or below their total open market value of 1.9 billion rupees as at Nov 30, 2023.

On Tuesday (Dec 19), Clint’s trustee-manager said that it expects the transaction to be fully funded by debt and internal cash resources.

“This investment underscores Clint’s further expansion of its portfolio to include high-quality industrial and logistics assets,” said Sanjeev Dasgupta, chief executive of the trustee-manager.

“Going forward, Clint will continue to tap into the rising demand from international and regional firms that are increasingly expanding their manufacturing activities in India.”

Clint’s portfolio in Chennai now comprises two business parks, three industrial facilities, and a data centre under development in Ambattur which is expected to be completed in 2025.

The business trust’s latest acquisition comes after Clint entered into an amended share purchase agreement with the asset vendors, following a forward purchase agreement inked for the assets in July 2022.

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Under the forward purchase agreement, Clint would provide funding for the development of the properties known as Casa Grande – Phase 2. The business trust would then fully acquire the project’s developer, Chengalpattu Warehousing Parks, upon completion of the Phase 2 project.

At the time, the trustee manager of Clint – then known as Ascendas India Trust – said its proposed acquisition of Casa Grande – Phase 2 could improve the trust’s earnings and distributions to unitholders. It was also expected to increase Ascendas India Trust’s portfolio size to about 25.3 million square feet (sq ft) from 25 million sq ft.

Clint’s trustee-manager said that with the recent acquisition, the business trust’s completed floor area for its industrial and logistics assets has risen to about 10 per cent of its portfolio.

Its completed floor area for the entire portfolio has also increased to 19.6 million sq ft, from 19.2 million sq ft previously.

Both of Clint’s newly-acquired industrial facilities are fully leased and collectively take up 330,000 sq ft, of which the majority (310,000 sq ft) is leased to what the trustee-manager refers to as a “leading international electronics manufacturer”.

The remaining 20,000 sq ft is leased to a “global energy solutions provider”.

The acquisition of Casa Grande – Phase 2 marks Clint’s second forward purchase transaction with the Casa Grande Group, after it completed its first forward purchase transaction of a fully leased industrial facility known as Casa Grande – Phase 1 in May 2022.

Units of Clint ended Monday S$0.02 or 1.7 per cent lower at S$1.14.