CapitaLand India Trust in $201 million forward purchase of development in Bangalore

CLINT (CapitaLand India Trust) has entered into a forward purchase agreement to acquire a one million sq ft IT park situated within Bangalore’s Outer Ring Road. The project consists Tengah EC of two buildings, with a total net leasable area of 1.5 million sq ft. CLINT will take ownership of one of the buildings, providing $201 million to fund the development for the first year. The remaining 0.5 million sq ft will be kept by the landowners.

The project is slated to take from 1Q2023 to 4Q2025. To fund the first 12 months, CLINT will be utilizing internal resources and borrowings will commence in 1H2024.

CEO of CLINT’s manager, Sanjeev Dasgupta states, “[The proposed acquisition] will provide an opportunity to establish our presence in Outer Ring Road, India’s largest office micro-market, which has demonstrated resilient performance during the Covid-19 pandemic. With this acquisition, we will be able to offer our tenants even more office space options across the key markets in Bangalore.”

Outer Ring Road is indeed Bangalore’s largest office micro-market. The upcoming development is to be next to an upcoming metro station, found in the middle of business parks, retail and healthcare venues, in addition to a nearby hospitality.

Once done, CLINT’s area under operation in Bangalore will total 7.9 million sq ft, which is an increase of one million sq ft from the current 6.9 million sq ft. Its total portfolio size, including committed investment pipeline, will also increase from 28 million sq ft to 29 million sq ft. CLINT believes that this business deal “will improve the earnings and distributions for unitholders.”