CapitaLand India Trust (CLINT) has announced plans to acquire a prominent office project in Nagawara, Outer Ring Road, Bangalore, for an estimated cost of $233.6 million. This strategic move is being made through a forward purchase agreement with Maia Estates Offices.
The addition of this 1.13 million sq ft office project to CLINT’s portfolio is expected to significantly boost earnings and distributions for unitholders. On a stabilized basis, the project is expected to generate a net profit of $7.7 million, while distribution per unit is projected to increase from 6.84 cents to 6.98 cents.
This office project is a part of a mixed-use development that comprises both office and retail spaces. Under the terms of the forward purchase agreement, CLINT will fully fund the development of the office project and receive interest on the funding at a higher rate compared to its borrowing cost.
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Upon completion of the development, which is estimated to be in the first half of 2030, CLINT will acquire the office space while Maia will retain the retail portion. This will result in a 9.9 million sq ft operational portfolio in Bangalore for CLINT, up from its current 8.7 million sq ft.
Apart from this office project, CLINT has other properties under development in Bangalore, including two office buildings in Gardencity, an IT Park at Hebbal, and an IT park at ITPB.
With the addition of this office project, CLINT’s portfolio size, including its committed investment pipeline, is estimated to increase by 4.0% from approximately 30.2 million sq ft to approximately 31.47 million sq ft.
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According to Gauri Shankar Nagabhushanam, CEO of CLINT, “The acquisition of this strategically located office project will further strengthen CLINT’s position in Bangalore, one of India’s most prominent office markets. In 2024, Bangalore witnessed record leasing levels for Grade A office space, with ORR being the largest office micro-market. With this prime office property, we will be able to offer our tenants a wider range of premium office space options across key micro-markets in Bangalore.”
On Feb 21, units in CLINT closed at $1, experiencing no change from the previous day.