Ascendas signs pact to acquire IT SEZ in Hyderabad for Rs 506 crore

The proposed acquisition will be the fifth building acquired by a-iTrust from the Phoenix Group

Hyderabad: Hyderabad continues to witness big ticket real estate investments despite the Covid-induced economic slowdown. Latest in the series of such major deals is that of Ascendas Property Fund Trustee, the trustee-manager of Ascendas India Trust (a-iTrust), entering into definitive agreements with Phoenix to acquire an IT SEZ building aVance 6 at HITEC City for Rs 506 crore.

The definitive agreements were executed with the shareholders of Phoenix IT Infrastructure India to acquire the building with a total floor area of about 6,39,495 square feet for a gross consideration of about Rs 506 crore (SGD 92.03 million). It is pertinent to note that about 98.3 per cent of aVance 6 is leased to Amazon Development Center (India).

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The proposed acquisition will be the fifth building by Ascendas India Trust from the Phoenix Group since 2012. Listed on the Singapore Exchange Securities Trading, it is the first Indian property trust in Asia, which owns income-producing real estate. Its portfolio comprises seven world-class IT business parks and one logistic park in India. Of them, it owns International Tech Park, CyberPearl and aVance in Hyderabad.

Sanjeev Dasgupta, CEO, Ascendas Property Fund Trustee, said, “The proposed acquisition provides a-iTrust an opportunity to scale up our presence in HITEC City and will add Amazon as a tenant to our IT park portfolio. The improving connectivity and enhancement work being carried out at aVance, Hyderabad would benefit our tenants in the future. We have already started seeing some leasing traction, with a large US-based MNC, having executed a Letter of Intent to lease aVance 5 (which is under construction).”

Continuing trend

According to workplace solutions company Vestian, Hyderabad continues to be one of the most favoured office markets of the country, accounting for 18 per cent share of the total absorption in 2020. The office markets in West Hyderabad, comprising Madhapur, Gachibowli and other peripheral markets account for over 90 per cent of the city’s office absorption.

Hyderabad’s organised real estate sector saw about $1 billion of investments during 2019-2020 and is expected to see further growth in the coming quarters of this year. Industry experts say majority of the future investments will go into the development of commercial offices and residential skyscrapers.

This growth indicates that office occupiers are expected to further expand their operations owing to investor-friendly policies of the State government, connectivity and infrastructure in the city.

There is also continued growth momentum in the residential space. Recently, CBRE’s Capital Markets & Land division has facilitated a land deal for Rajapushpa Properties, which bought 25 acres of land in Narsingi in Western Hyderabad, with an investment of Rs 800 crore, touted to be the country’s largest deal in 2020. Last month, Brigade Group launched Rs 1,100-crore residential project at Moti Nagar, Hyderabad, spread over 11 acres comprising over 1,300 residential units.

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