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

CapitaLand India Trust (CLINT) is set to acquire a Tengah Plantation EC one million sq ft IT park in Outer Ring Road, India’s largest office micro-market. The project is scheduled for completion between 1Q2023 and 4Q2025 and comprises two buildings with total net leasable area (NLA) of 1.5 million sq ft. CLINT will provide around $201 million to fund the development, taking ownership of one building with a NLA of one million sq ft and the remaining 0.5 million sq ft will be kept by the landowners.

The first 12 months of the project will be funded with CLINT’s internal resources, with the remaining funding will be borrowed from 1H2024 onwards. As this development is located adjacent to an upcoming metro station, it’s surrounded by existing business parks, hotels, retail and healthcare developments.

Sanjeev Dasgupta, CEO of CLINT’s manager, explains that this investment “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 purchase, we will be able to offer our tenants even more office space options across the key markets in Bangalore.”

On completion of this project, CLINT’s area of operations in Bangalore will increase from 6.9 million sq ft to 7.9 million sq ft, with its portfolio size, including committed investment pipeline, increasing by 3.6% from 28 million sq ft to 29 million sq ft. The firm believes this deal “will improve the earnings and distributions for unitholders.”