Ascendas India Trust entered a construction funding and forward purchase deal with an Arshiya Ltd. subsidiary to develop a warehouse at the Arshiya Free Trade Warehousing Zone, Panvel, near Navi Mumbai (Panvel FTWZ), the trust said in a filing to SGX Thursday.
Total construction funding isn’t expected to exceed 700 million rupees, or S$13.7 million, with the total consideration estimated at 2.15 billion rupees, or S$42.1 million, the trust said, adding the deal will be funded with existing cash resources in India.
“The proposed construction funding of the new warehouse, upon completion, will further enhance a-iTrust’s position in the fast-growing logistics sector in India,” Sanjeev Dasgupta, CEO of the trustee-manager, said in the statement. “We are seeing increased tenant demand since our initial acquisition of the six operating warehouses at Panvel FTWZ.”
After the completion, the trust will lease the warehouse to a subsidiary of Arshiya for six years under a master lease agreement, the filing said.
The warehouse, which is expected to be completed in 12 months, will have a total leaseable area of 325,503 square feet, the filing said.
In early 2018, Ascendas India Trust completed the acquisition of six operating warehouses at Panvel FTWZ and the rights to extend construction funding and acquire future warehouses developed by Arishiya there, the filing said.
The six warehouses are already near full occupancy, and it entered the deal for an additional warehouse to meet demand from existing and prospective tenants, the trust said.
Current tenants of Panvel FTWZ include multi-national companies such as DHL Logistics, Rolex Logistics and Huawei, the filing said.
Panvel FTWZ is located near Jawaharlal Nehru Port Trust, India’s largest container port, and has “good access” to Mumbai, Veashi and Thane industrial centers, the filing said.
Ascendas India Trust’s portfolio includes seven IT business parks and six modern warehouses in India, the filing said.
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