March 13 2020, India – Ascendas Property Fund Trustee Pte. Ltd., the Trustee-Manager of Ascendas India Trust (“a-iTrust”), is pleased to announce the signing of definitive agreements for the acquisition of an income producing warehouse with a total floor area of approximately 0.2 million square feet from Arshiya Northern FTWZ Limited (“Vendor”). The transaction closing is subject to the completion of certain conditions precedent.
Located in Khurja, NCR1, the warehouse is part of a Free Trade Warehousing Zone (“FTWZ”) spread over approximately 127.0 acres of freehold land. With good quality infrastructure and facilities, the warehouse has attracted multinational customers, including ZTE, Corning, CFM Aircraft Engines etc.
Within the FTWZ facility, the Vendor has two existing warehouses and substantial land bank to build additional warehouses. The future development potential of the site is estimated at approximately 3.6 million square feet. To provide a future pipeline of warehouses for acquisition, a-iTrust has entered into an agreement with the Vendor with an option to acquire the existing warehouses and fund the construction of future warehouses within the FTWZ, and to acquire these warehouses when completed, subject to the fulfilment of certain terms and conditions.
Sanjeev Dasgupta, Chief Executive Officer of the Trustee-Manager said, “The logistics sector caters to domestic consumption and industrial demand and provides diversification to our business parks portfolio. The proposed acquisition also enables a-iTrust to grow its warehousing footprint in North India. We would benefit from key infrastructure projects like Jewar International airport and Dedicated Freight Corridor coming up in the vicinity.”
The purchase consideration for the warehouse comprises of an upfront payment of approximately INR 229.9 million (SGD 4.5 million2) and an additional deferred consideration of up to INR 721.6 million (SGD 14.1 million2) to be paid over the next four years, linked to the achievement of certain performance milestones by the Vendor.
Upon acquisition of the warehouse, an affiliate of the Vendor will enter into an agreement with a-iTrust to lease the warehouse for a period of six years. The Vendor will continue to operate and manage the warehouse and pay pre-agreed rentals to a-iTrust.