In a significant move to bolster its presence in India's real estate market, CapitaLand India Trust (CLINT) has inked a forward purchase agreement with Phoenix Group, securing a substantial acquisition of IT buildings spanning a total leasable area of 2.5 million square feet in HITEC City, Hyderabad.
The strategic acquisition is poised to elevate CLINT's standing in the region, with pro forma net profit from the acquired buildings forecasted to soar to approximately S$4.5 million on a stabilized basis. This expansion is expected to reflect positively on the distribution per unit, with an anticipated increase from 6.45 cents to 6.47 cents.
Under the terms of the forward purchase arrangement, CLINT will provide funding amounting to Rs 2.15 billion (equivalent to S$34.68 million) to refinance the existing loan, thereby facilitating the acquisition process. In return, CLINT stands to receive interest on the funding at a rate surpassing its borrowing cost.
Moreover, this agreement positions CLINT to extend financial support towards the development of the buildings in the future. The trust is poised to acquire the buildings incrementally, with the purchase price to be determined upon the completion and leasing of each building, potentially securing up to 90% ownership.
This strategic move underscores CLINT's commitment to expanding its portfolio and strengthening its foothold in India's burgeoning real estate landscape. The acquisition is set to further solidify the trust's position as a key player in the region's commercial property market.
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