CapitaLand Investment’s (CLI) wholly-owned subsidiary Ascendas India Development VII and its joint venture partner Maharashtra Industrial Development Corporation (MIDC) have entered into separate agreements with CapitaLand India Trust (CLINT) where Ascendas India Development VII and MIDC will divest their respective 78.5% and 21.5% shareholding in Ascendas IT Park (Pune) to CLINT.
Ascendas India Development VII is a wholly-owned subsidiary of CLI India, which is formerly known as CapitaLand India. Ascendas IT Park (Pune) owns International Tech Park Pune in Hinjawadi (ITPP-H) in India.
The divestment to CLINT comes at a consideration of approximately INR13.5 billion ($221.9 million). The total sale consideration represents a premium of around 9% to CLI’s valuation of ITPP-H in December 2021.
ITPP-H is an information technology special economic zone (IT SEZ) that has a total floor area of 2.3 million sq ft on 99-year leasehold land. The park comprises four buildings and is close to 100% leased to prominent IT/information technology enabled services (ITES) tenants such as Infosys Ltd., Synechron Technologies Pvt. Ltd. and Tata Consultancy Services Ltd.
The buildings in the park have obtained Leadership in Energy and Environmental Design (LEED) Gold certification and Indian Green Building Council (IGBC) Platinum certification for Green Campus.
After the divestment, CLI will continue to provide property and lease management services for ITPP-H to CLINT.
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The proposed divestment forms part of the planned pipeline of assets being developed by CLI India, CLINT’s sponsor. It is also said to provide CLINT with the ability to create further scale in its portfolio in India and deepens its presence in Pune which provides significant operational advantages to the REIT.
“CLI’s proposed divestment of ITPP-H to CLINT is in line with our strategy to provide quality, stable-performing assets to support the growth of our sponsored trusts. Adding another top-class IT park to CLINT’s strong portfolio of eight IT parks enables CLI to participate in CLINT’s growth in India, which is one of CLI’s core markets. The proposed divestment would increase our funds under management and fee-related earnings,” says Jonathan Yap, CEO, listed funds at CLI.
“With this transaction, CLI has announced gross divestments of $2.9 billion year-to-date, close to our annual capital recycling target of $3 billion. Almost 90% are divestments to our listed funds and private vehicles, demonstrating these platforms as key growth drivers for us. CLI has a pipeline of about $10 billion of high-quality properties on our balance sheet, which we can potentially offer to our various fee income-generating listed funds and private vehicles,” he adds.
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“The proposed acquisition adds a high-quality asset developed by the Sponsor into the CLINT portfolio. The marquee tenant profile with high level of occupancy will add substantial scale to the CLINT portfolio,” says Sanjeev Dasgupta, CEO of the REIT trustee-manager.
The proposed divestment constitutes an interested person transaction (IPT) under the listing rules and is subject to CLINT’s unitholders’ approval at an extraordinary general meeting (EGM). The EGM is targeted to be completed by February 2023.
Shares in CLI closed flat at $3.67 while units in CLINT closed flat at $1.13 on Dec 28.
