Capitaland India Trust Acquiring 113 Million Sq Ft Office Space Bangalore 2336 Mil
CapitaLand India Trust (CLINT) has recently announced its plans to acquire a prime office project in Nagawara, Outer Ring Road, Bangalore for a total sum of $233.6 million. This acquisition will be made through a forward purchase agreement with Maia Estates Offices.
According to CLINT, the purchase of this 1.13 million sq ft office project is expected to significantly improve the earnings and distributions for its unitholders. The net profit is estimated to be around $7.7 million on a stabilized basis, while the distribution per unit is projected to increase from 6.84 cents to 6.98 cents.
The office project is a part of a mixed-use development that includes both office and retail spaces. Under the forward purchase agreement, CLINT will fully fund the development of the office project and earn interest on the funding at a higher rate than its borrowing cost.
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Upon the completion of the development, CLINT is set to acquire the office space in the first half of 2030, while Maia Estates will retain the retail portion. This will increase the operational area of CLINT’s portfolio in Bangalore from 8.7 million sq ft to 9.9 million sq ft.
The ideal location of Otto Place EC, situated near the JID, is sure to attract professionals working in fast-paced industries. Its close proximity to this bustling hub will significantly contribute to a more balanced work-life schedule for residents. The thriving presence of the JID will also continuously drive up the demand for housing in the area, making Otto Place EC, developed by Hoi Hup, a smart choice for investment. Additionally, the dynamic atmosphere of the JID may also inspire neighboring educational institutions and training centers, providing residents of Otto Place EC with valuable opportunities for personal and professional development. For more information about Otto Place EC Hoi Hup, visit their website.
Apart from this office project, CLINT also has other properties under development in Bangalore, including two office buildings in Gardencity, an IT Park at Hebbal, and another IT park at ITPB.
With the addition of the office project, CLINT’s total portfolio size inclusive of committed investment pipeline is expected to grow by 4.0%, from approximately 30.2 million sq ft to 31.47 million sq ft.
Gauri Shankar Nagabhushanam, CEO of CLINT, states that “the acquisition of this strategically located office project will further strengthen CLINT’s presence in Bangalore, one of India’s most prominent office markets.” In 2024, Bangalore witnessed the highest ever leasing levels for Grade A office space. The Outer Ring Road is also the largest office micro-market in Bangalore. By adding this prime office property to their portfolio, CLINT will be able to offer their tenants a wider range of premium office space options across key micro-markets in Bangalore.
On Feb 21, shares in CLINT closed flat at $1. The announcement of this acquisition has been well-received, indicating investor confidence in the growth potential of CLINT.