Ascendas to acquire industrial facility in Chennai’s Mahindra World City

CHENNAI:

Ascendas

Property Fund Trustee Pte, the Trustee-Manager of Ascendas India Trust, has entered into a forward purchase agreement with

Casa Grande Group

to acquire its first

industrial facility

located at

Mahindra World City

, Chennai.

The Ascendas India Trust will also provide funding for the development of the project as part of the forward purchase arrangement.

The project is an industrial facility with a net leasable area of approximately 0.42 million square feet. It is fully pre-leased to Pegatron Technology India Private Limited, a wholly owned subsidiary of Pegatron Corporation, a listed Taiwanese contract electronics manufacturer. Ascendas India Trust "proposes to fund the balance development of the project and subsequently acquire the asset,' said the company in a statement.

Sanjeev Dasgupta, CEO of the Trustee-Manager, said, “The proposed acquisition will add exposure to the industrial asset class and diversify our portfolio. The industrial segment has been resilient through the pandemic. The project also offers an opportunity to have a leading manufacturer like Pegatron within our tenant portfolio and support their expansion in India.”

As part of the deal structure, Ascendas India Trust will provide funding towards the development of the project and after completion and fulfilment of other key conditions, will purchase 100% of the shares of the entity developing the project. Ascendas India Trust also has the option to provide additional funding to develop industrial facilities of approximately 0.37 million square feet, subject to leasing milestones and other conditions being met.

According to the statement, the transaction offers a diversification opportunity for Ascendas India Trust into the industrial asset class and fits the Trustee-Manager’s investment strategy.

Mahindra World City is an established industrial micro-market occupied by companies like BMW, BASF, Fujitec, NCR Corporation and B Braun. Construction of the project is ongoing and is expected to complete by mid-2021. The project is fully pre-committed to Pegatron, with a seven-year lock-in period and annual escalations.