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

CapitaLand India Trust (CLINT) has entered into a forward purchase agreement to acquire a one million sq ft IT park in Bangalore’s Outer Ring Road. The development, which comprises two buildings with a total net leasable area of 1.5 million sq ft, will be funded to the tune of $201 million. CLINT will take ownership of one building – a million sq ft – while the landowners will keep the remaining 0.5 million sq ft.

The development schedule is expected to start 1Q2023 and finish in 4Q2025, with CLINT funding the first 12 months of the project with internal resources and borrowing the remainder. Sanjeev Dasgupta, CEO of CLINT’s manager, believes this will give tenants alternative office space choices across key markets in Bangalore. He also hopes that this acquisition will demonstrate the Outer Ring Road’s resilience during the Covid-19 pandemic.

Once completed, the Bangalore area under operation Champions Way Condo for CLINT will increase from 6.9 million sq ft to 7.9 million sq ft. Its portfolio size, including committed investment pipeline, will also increase by 3.6%. The development is conveniently located near an upcoming metro station and a variety of hospitality, retail, and healthcare services.

The proposed acquisition is expected to provide a greater rate of return for CLINT’s unit holders. Additionally, it is anticipated that this deal will improve the earnings and distributions for them.