Singapore-listed CapitaLand Investment Trust (CLINT) has entered into a forward purchase agreement to acquire Phoenix Group’s IT buildings in Hitec City as part of which it will provide refinancing to the tune of ₹250 crore to the Hyderabad-based builder.
Hitec City in Hyderabad with a leasable area of 2.5 million square feet is a major IT and office hub tenanted by leading global multinationals. CLINT will refinance the builder’s existing loan and receive interest on the funding at a rate higher than its borrowing cost, the real estate asset manager said.
This acquisition will increase its earnings and in turn, the distribution to its unitholders. It said that pro forma, the net profit from the buildings is expected at $4.5 million and the distribution per unit is expected to rise to 6.47 cents from 6.45 cents now.
Apart from the refinancing, CLINT will also provide funding in future towards development of the buildings and acquire the buildings at a price to be determined as and when each building is constructed and leased up to 90 per cent, it said. “The acquisition is attractive as its capitalisation rate is higher compared to the market’s capitalisation rates,” it added.
““The forward purchase allows us to secure prime assets that will further strengthen our presence in Hyderabad, which has strong leasing demand from multinational companies”, said Sanjeev Dasgupta, Chief Executive Officer of CapitaLand India Trust Management.
A subsidiary of CapitaLand Investment Ltd, CLINT owns three business parks in Hyderabad and is currently developing a data centre that will be completed next year.