Ascendas Property Fund Trustee Pte. Ltd, the trustee-manager of Ascendas India Trust (a-iTrust), has struck a deal to buy a warehouse in Delhi-NCR from Arshiya Group.
The transaction amount includes Rs 22.9 crore and an additional deferred payment of Rs72.1 crore, linked to the achievement of certain performance over the next four years, Ascendas said in a statement.
The income-producing warehouse is located in Khurja, Delhi-NCR and has a total floor area of roughly 0.2 million sq ft. The warehouse is part of a Free Trade Warehousing Zone (FTWZ) which is spread over 127.0 acres of freehold land.
The asset has attracted companies such as ZTE, Corning, CFM Aircraft Engines, etc.
Upon acquisition, an affiliate of Arshiya Group will sign an agreement with a-iTrust to lease the warehouse for six years. The vendor will continue to operate and manage the warehouse and pay pre-agreed rentals to a-iTrust, the statement said.
The development marks the third deal between Ascendas and Arshiya Group and the addition of another asset to its portfolio. Earlier, it had struck an agreement with a unit of Arshiya Ltd to develop and acquire a warehouse in Mumbai for Rs 215 crore. Before that, it had bought six operating warehouses for $83 million at Panvel FTWZ.
Arshiya has two existing warehouses and substantial land bank to build additional warehouses. The future development potential of the site is estimated at approximately 3.6 million square feet.
“To provide a future pipeline of warehouses for acquisition, a-iTrust has signed an agreement with an option to acquire the existing warehouses and fund the construction of future warehouses within the FTWZ, and to acquire these warehouses when completed, subject to the fulfillment of certain terms and conditions,” the statement added.
Sanjeev Dasgupta, chief executive officer of the Trustee-Manager, said the logistics sector caters to domestic consumption and industrial demand and provides diversification to company’s business parks portfolio.
“The proposed acquisition also enables a-iTrust to grow its warehousing footprint in North India. We would benefit from key infrastructure projects like Jewar International airport and Dedicated Freight Corridor coming up in the vicinity,” he said.
As a result of the acquisition, a-iTrust’s current portfolio size will increase by 0.9% from approximately 22.6 million square feet to approximately 22.8 million square feet.
In January last year, Singapore’s CapitaLand struck a deal to buy the holding companies of the business of the Ascendas-Singbridge Group, which manages Ascendas Real Estate Investment Trust, Ascendas India Trust, and Ascendas Hospitality Trust, for cash and stock from Temasek for about $4.4 billion.