The manager of Ascendas India Trust (a-iTrust) has announced that it has entered into a forward purchase agreement with Gardencity Realty Private to acquire two buildings located in an IT park in Hebbal, Bangalore, India. The two buildings have a total net leasable area of up to 1.65 million square feet.

As part of the agreement, a-iTrust will also provide funding for the development of the project, which comprises three buildings spread across two land parcels, with an aggregate net leasable area of approximately 2.26 million square feet.

The forward purchase acquisition of the two buildings will take place after completion of the construction and is subject to the receipt of the occupancy certificate for the project and other key conditions.

The trust shall provide project development funding of approximately INR8.28 billion ($154.1 million). Post-completion, a-iTrust shall purchase 100% of the shares of the two entities developing the Project.

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The manager states that the total purchase consideration for the transaction would depend on certain factors, including final rentals achieved, and is currently estimated to be INR14.41 billion.

Following the acquisition of these two IT buildings, a-iTrust’s portfolio size (including pipeline projects) will increase by 7.2% from approximately 23.2 million square feet to approximately 24.9 million square feet. 

Sanjeev Dasgupta, CEO of the trustee-manager, says that the proposed acquisition will allow the trust to establish a presence in Hebbal.

“The proposed acquisition will provide an opportunity to establish our presence in Hebbal, one of Bangalore’s upcoming IT/ITES micro-markets, which is currently witnessing stable demand and rent,” he says.

Shares in a-iTrust closed flat at $1.47 on March 26.