The total price is expected to hit $277.5m.
Ascendas India Trust (a-iTrust) will acquire two buildings in HITEC City, Hyderabad from construction firm Phoenix Ventures, an announcement revealed. Both buildings have a combined leasable area of about 1.85 million sq ft.
Based on the deal, a-iTrust will also provide construction funding for the co-developers of aVance A1 and A2.
“The location within the city’s prime IT Corridor in in Hi-Tec City is contiguous to aVance Business Hub where we own 1.501 million sq ft,” Ascendas Property Fund CEO Sanjeev Dasgupta commented. “This would help our tenants to gain economies of scale whilst offering their employees access to transportation and proximity to retail and residential hubs.”
According to the purchase agreement, a-iTrust and its affiliates will first need to subscribe for debentures issued by the buildings’ co-developers worth $157.8m. The firm will complete the acquisition via a purchase of 100% of the shares in the co-developer entities once the required leasing criteria is being met in the buildings.
The purchase price will be based from a pre-agreed formula which considers factors such as rent, occupancy and capitalisation rates. The total purchase consideration, inclusive of the construction funding, is not expected to exceed $277.5m.
In the event that the actual completion date is delayed beyond June 2021 or if other events as defined in the transaction documents occur, a-iTrust will have the right to redeem the debentures.
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