SINGAPORE - Ascendas India Trust (a-iTrust) has agreed to buy BlueRidge Phase II, a special economic zone in Pune focused on information technology (IT).
The price is not expected to exceed 6,405 million rupees ($133 million), its trustee manager, Ascendas Property Fund Trustee, said in a statement to the Singapore Exchange on Monday.
This price will be based on rents, rental escalation and the leasing level of BlueRidge Phase II as at the time of sale.
BlueRidge Phase II is under construction in Hinjewadi in Pune, the "Silicon Valley" of India. The development is expected to be completed by the second half of 2015 and will comprise three buildings with approximately 1.5 million square feet of built-up area.
The acquisition is a two-step process. First, a-iTrust will subscribe for non-convertible debentures worth 2,600 million rupees ($54 million) issued by the co-developer of BlueRidge Phase II. The timing of the subscription is tied to BlueRidge Phase II's construction funding requirements.
Then, on Dec 31, 2016, a-iTrust will complete the acquisition by buying 100 per cent of the shares in the co-developer if the minimum leasing threshold of 65 per cent is met. If the co-developer fails to meet that threshold, a-iTrust will have the right to call for repayment of the debentures.
Mr Sanjeev Dasgupta, chief executive of the trustee-manager, said: "The acquisition would mark a-iTrust's entry into Pune, an important market for its existing and potential clients."
A-iTrust's portfolio currently comprises five IT business parks in India with 7.5 million sq ft of operating space.