Singapore-listed Ascendas India Trust (a-iTrust) has entered into an agreement with Arshiya Limited (Arshiya) to extend construction funding and subsequently acquire an additional warehouse in Mumbai for $31 million.
Ascendas India Trust had in November 2017 acquired six operating warehouses, with total leasable area of 832,249 sq ft, in Panvel FTWZ for $83 million.
The seventh warehouse, which has a total leasable area of approximately 325,503 square feet (sq ft), will be developed at the Arshiya Free Trade Warehousing Zone at Panvel near Navi Mumbai.
The additional warehouse acquisition is to meet incremental demand from existing and prospective tenants following the near full occupancy of its existing six operating warehouses in Panvel FTWZ, a-iTrust said, in a filing.
The FTWZ is currently occupied by multi-national companies including DHL Logistics, Rolex Logistics, a third-party logistics (3PL) provider for Cisco Systems, and Huawei.
The acquisition is expected to be completed by by June 30, 2020.
Ascendas IT Park Chennai Limited (AITPCL), a subsidiary of a-iTrust, has concurrently entered into a subscription agreement with Anomalous Infra Private Limited (AIPL) to subscribe to the latter’s non-convertible debentures to finance the construction of the new warehouse on a 5.5-acre site at Panvel FTWZ.
The total construction funding is expected to be in the region of $10.10 million. AIPL, a special purpose vehicle owned by Arshiya, will construct the new warehouse.
Following the completion of the acquisition in June 2020, AIPL will enter into a master lease agreement with the Arshiya unit to lease-back the new warehouse for six years. Arshiya arm will operate, manage, and pay rent to AIPL during the lease period.