CapitaLand Investment’s (CLI) wholly-owned subsidiary Ascendas India Development VII and its joint venture partner Maharashtra Industrial Development Corporation (MIDC) have signed different agreements CapitaLand India Trust (CLINT) in which Ascendas India Development VII and MIDC will transfer the respective 78.5% and 21.5% shares in the Ascendas IT Park (Pune) to CLINT.
Ascendas India Development VII is a wholly-owned subsidiary owned by CLI India, which is earlier called CapitaLand India. Ascendas IT Park (Pune) is the owner of International Tech Park Pune in Hinjawadi (ITPP-H) in India.
The sale of CLINT to CLINT will be accompanied by a cost of about INR13.5 billion ($221.9 million). The amount of consideration for sale is an increase of 9% to CLI’s estimate of ITPP-H at the end of December 2021.
ITPP is an IT special economic zone (IT SEZ) that has an area of 2.3 million square feet of 99 year leasehold property. The park is comprised of four buildings, and is more than 100% let to prominent IT and information technology-enabled service (ITES) tenants like Infosys Ltd., Synechron Technologies Pvt. Ltd. as well as Tata Consultancy Services Ltd.
The structures in the park have been awarded Leadership in Energy and Environmental Design (LEED) Gold certification as well as Indian Green Building Council (IGBC) Platinum certification for Green Campus.
After the divestment CLI is expected to continue to offer property as well as lease administration services for ITPP H to CLINT.
The divestment proposed is part of the pipeline of assets that are being developed through CLI India, CLINT’s sponsor. It’s also believed to help CLINT with the capacity to further expand the portfolio of its assets in India and expand it’s presence Pune that will provide substantial operational benefits for the REIT.
“CLI’s plan to sell ITPP-H CLINT is in line with our plan to offer high-quality, stable assets to help grow the value of our trusts that we sponsor. The addition of a top-quality IT park in CLINT’s impressive range of 8 IT parks will allow CLI to be part of CLINT’s expansion in India as one of the core markets for CLI. The proposed divestment will raise the funds under management as well as fees-related profits,” adds Jonathan Yap, CEO, listed funds at CLI.
“With this deal, CLI has announced gross divestments of $2.9 billion for the year, just shy of our annual capital recycle goal at $3 billion. Nearly 90% are divestments of our listed funds as well as private vehicles, proving that these platforms are major growth engines for CLI. CLI has pipelines of approximately $10 billion worth of quality properties in our balance sheet that could be offered to our fee-generating private vehicles and listed funds,” he adds.
“The proposed acquisition is the highest-quality asset created by the Sponsor to the CLINT portfolio. Tenant profiles that are marquee that has a the highest occupancy level will provide significant scale to the CLINT portfolio,” says Sanjeev Dasgupta Director of Operations of The REIT trustee-manager.
The proposed divestment is an interest person transaction (IPT) in accordance with listings rules. It is subject to the unitholders’ consent of CLINT during an extraordinary general assembly (EGM). The EGM is expected to be completed by February 2023.
The shares of CLI ended the day with a flat closing price of $3.67 and units of CLINT ended the day with a flat price of $1.13 on Dec . 28.