Recent acquisitions made by CapitaLand India Trust and ARA US Hospitality Trust

SINGAPORE-LISTED real estate investment trust (S-Reit) acquisitions continue into 2023 with ARA US Hospitality Trust : XZL 0%’s recent proposed acquisition of a Colorado Hilton-branded hotel in the US for US$29 million. This was after CapitaLand India Trust : CY6U 0% (Clint) had announced two more acquisitions and a memorandum of understanding (MOU) in December 2022 to end the year.

ARA US Hospitality Trust announced the proposed acquisition of Home2 Suites by Hilton Colorado Springs South for US$29 million on Jan 4, 2023. The property is a recently built select-service, extended-stay hotel with 119 rooms located at Colorado Springs, a popular tourist attraction at the centre of the Rocky Mountain recreation activities. Revenue per available room (RevPAR) in the Colorado Springs area has exceeded pre-pandemic levels, and the hotel’s RevPAR of US$137 outperforms properties in the area.

The acquisition is expected to be yield accretive and the pro forma distribution per stapled security is estimated to increase from 0.355 US cents to 0.784 cents, assuming the transaction was completed on Jan 1, 2021. The acquisition is expected to be completed in the first quarter of 2023.

In December, Clint announced that it was acquiring a freehold site in Chennai for S$14.1 million to develop its third data centre in India. Clint will invest an estimated S$328.8 million to acquire the site and develop a state-of-the-art data centre in phases over the next four to five years which will have a power capacity of 55 megawatts (MW) to host customers such as global technology giants and cloud service providers, and large domestic enterprise clients.

Clint also announced a proposed acquisition of International Tech Park Pune in India for S$221.9 million. The tech park has a total floor area of 2.3 million square feet (sq ft) spread across four buildings and is close to 100 per cent leased to prominent IT and IT-enabled services tenants such as Infosys, Synechron Technologies, and Tata Consultancy Services. The acquisition forms part of the planned pipeline of assets being developed by the sponsor and provides Clint with the ability to create further scale in its portfolio in India. It also deepens the trust’s presence in Pune, which provides it with significant operational advantages.

Aside from the two acquisitions, Clint also signed an MOU with the Telangana Government to develop a data centre at the trust’s International Tech Park Hyderabad, located at Madhapur. Leveraging CapitaLand Group’s data centre expertise, the data centre will have a built-up area of 250,000 sq ft and 36 MW of power capacity, as well as incorporate the latest technologies in cooling and security, allowing it to serve hyperscale players and large enterprises in the region. The project is estimated to entail an investment of S$210 million to be deployed over the next three to five years.

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The writer is a research analyst at SGX.

For more research and information on Singapore’s Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.