CapitaLand India Trust (CLINT) has entered into a forward purchase agreement with Phoenix Group to acquire IT buildings with a total leasable area of 2.5 million square feet in HITEC City, India. HITEC City is a major IT and office hub in Hyderabad where many large multinational companies are located.
The acquisition of the assets is expected to increase CLlNT’s earnings and distributions for Unitholders. Pro forma net profit from the buildings is forecast to be approximately S$4.5 million ($3.3 million) on a stabilized basis. Pro forma distribution per unit is expected to increase from 6.45 cents to 6.47 cents.
As part of the forward purchase arrangement, CLINT will provide funding of INR2.15 billion ($24 million) to refinance the existing loan and receive interest on the funding at a rate higher than its borrowing cost. CLINT will also provide funding toward development of the buildings and acquire the buildings at a price to be determined as each building is const
