In accordance with agreements, they will sell their respective 78.5% and 21.5% stakes in CapitaLand India Trust (CLINT)
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CapitaLand Investment’s (CLI) wholly-owned subsidiary Ascendas India Development VII and its joint venture partner Maharashtra Industrial Development Corporation (MIDC) have signed distinct agreements with CapitaLand India Trust (CLINT) in which Ascendas India Development VII and MIDC will sell the respective 78.5% and 21.5% stake in the Ascendas IT Park (Pune) to CLINT.
Ascendas India Development VII is an entirely-owned subsidiary of 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 to CLINT will be accompanied by a cost of about INR13.5 billion ($221.9 million). The amount of consideration for sale is an additional 9% to CLI’s estimate of ITPP-H as of December 2021.
ITPP is an IT special economic zone (IT SEZ) that has the total floor space of 2.3 million square feet of 99 year leasehold property. The park is comprised of four buildings, and is nearly 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 within the park have received Leadership in Energy and Environmental Design (LEED) Gold certification as well as Indian Green Building Council (IGBC) Platinum certification for Green Campus.
Following 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 which is being designed through CLI India, CLINT’s sponsor. It’s also believed to give CLINT with the capacity to further expand the portfolio of its assets in India and strengthen the presence of CLINT in Pune which will bring substantial operational benefits for the REIT.
“CLI’s plan to sell ITPP-H CLINT is consistent with our mission to provide high-quality, reliable assets to help grow the value of our trusts sponsored by us. The addition of another world-class IT park in CLINT’s impressive range of 8 IT parks will allow CLI to take part in CLINT’s expansion in India as one of CLI’s primary markets. The proposed divestment will raise the amount of funds we manage and fee-based earnings.” 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 that is $3 billion. Around 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 that is approximately $10 billion in top-quality properties in our balance sheet that we could offer to our diverse fee-income-generating private vehicles and listed funds,” he adds.
“The proposed acquisition will add an asset of high-quality that was developed by the Sponsor to the CLINT portfolio. A marquee-tenant profile that has a an extremely high occupancy rate will provide significant scale to the CLINT portfolio,” says Sanjeev Dasgupta director of operations for The REIT trustee-manager.
The proposed divestment is an interest person transaction (IPT) according to the 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.
CLI shares CLI were with a flat closing price of $3.67 while shares in CLINT ended the day in the same spot at $1.13 on December 28.