Ascendas India Trust has entered a definitive agreement to acquire Casa Grande – Phase 1, a 420,000 square foot industrial facility at Mahindra World City in Chennai, the REIT said in a filing to SGX Wednesday.
The deal follows a forward purchase agreement with the shareholders of Chengalpattu Logistics Parks (CLPPL), which the REIT entered into in March 2021, the filing said.
The definitive agreement has been executed, with Ascendas India Trust to acquire all of CLPPL, which owns Casa Grande – Phase 1, for INR2.12 billion, or S$38.6 million, the filing said. The transaction is expected to be funded by debt and internal cash resources, the trust said.
The facility is fully leased to a leading international electronics contract manufacturer, the REIT said. In March 2021, the REIT said the manufacturer was Pegatron, a Taiwanese company.
Sanjeev Dasgupta, CEO of the REIT’s manager, said the acquisition was the trust’s first investment in the industrial segment.
“This is a high-tech asset focused on assembly of cellphone products and components. The property is located at Mahindra World City, a leading industrial township and an established industrial micro market in Chennai. This acquisition validates our diversification strategy in the industrial and logistics segments,” Dasgupta said in the statement.
Under the original deal, announced in March 2021, Ascendas India Trust agreed to provide funding of INR1.4 billion, or S$25.5 million at the time, to complete the development and repay the project’s existing liabilities. That deal called for the trust to acquire the property once it was completed.
Ascendas India Trust also has the option to fund the development of Casa Grande – Phase 2, which includes two industrial facilities with a total net leasable area of around 310,000 square feet, the filing said.