CapitaLand India Trust launches S$150 million private placement to fund two office building projects
The issue price will be between S$1.208 and S$1.237 per new unit – a discount of 2.6 to 4.9%
[SINGAPORE] CapitaLand India Trust (Clint) is set to issue new units to raise gross proceeds of at least S$150 million, its manager said on Tuesday (Feb 24).
The new units, expected to be listed on Mar 5, will be issued at a price between S$1.208 and S$1.237 per unit. This represents a 2.6 to 4.9 per cent discount to the volume weighted average price of S$1.2701 per unit as at Monday.
To ensure fairness to existing unitholders, the manager intends to declare an estimated “advanced distribution” of S$0.0144 per unit for the period from Jan 1 to the day before the new units are issued.
Factoring in this payout, the issue price represents a slightly narrower discount of between 1.5 and 3.8 per cent to the adjusted volume weighted average price of S$1.2557.
“The private placement will enable Clint to provide funding to execute the development and construction of (two office buildings) to drive income growth and portfolio enhancement,” said the trust’s manager.
On a pro forma basis for FY2025, the transaction is expected to be distribution accretive, added the manager. Distribution per unit would have risen 5.1 per cent to S$0.0828 had the placement been completed in 2025, it said.
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Clint’s gearing ratio would have also dropped by 2.8 percentage points to 36.8 per cent on a pro forma basis upon deployment of the private placement proceeds. This pro forma drop, however, assumes that net proceeds from the trust’s divestment of a 20.2 per cent interest in three data centre assets on Dec 31 were used to repay debt on the same day.
The new units to be issued will increase the total number of units by at least 121.3 million units, or about 8.9 per cent of the total number of units currently in issue.
This offer will be made to eligible institutional, accredited and other investors. The issuance will also not require fresh shareholder approval as it is permitted under a general mandate approved at Clint’s April 2025 annual general meeting.
“The increase in the total number of units in issue and enlarged unitholder base is expected to improve the overall trading liquidity of the units,” said Clint’s manager.
Use of proceeds
S$100 million of the proceeds will be used to partially fund the ongoing development and construction of the 1.2 million square-foot office property Building 1, Ebisu in Bengaluru, India – set to be completed in the second half of this year.
In return, Clint will receive an annual coupon rate of at least 11.5 per cent under an existing agreement with the developer. As at Dec 31, the remaining funding commitment in relation to the project was about 8.6 billion Indian rupees (S$123 million), said the trust’s manager.
About S$47.4 million of the proceeds will partially fund the ongoing development and construction of the 1.1 million square-foot office building The Beacon at Nagawara in Bangalore, India – in return for at least 11.5 per cent coupon.
The building is set to be completed in the second half of 2028. Its remaining funding commitment in relation to the project was some 10.7 billion rupees as at Dec 31.
“Clint’s unique forward purchase strategy provides an attractive structure to lock in quality development projects while benefiting from an income stream from interest coupons of at least 11.5 per cent during the development period,” said the manager.
Once the properties are completed and stabilised, Clint expects to formally acquire them with an estimated rental yield ranging from 9 to 10 per cent, based on historical transactions. The addition of the two developments will ultimately contribute 2.3 million square feet to the trust’s portfolio, increasing its Bangalore footprint by 7 percentage points to 34.6 per cent of its total floor area.
The remaining S$2.6 million will be used for expenses and fees related to the private placement.
The manager also noted that if the development of either building fails to materialise, it retains absolute discretion to redirect the net proceeds towards other purposes, such as funding other committed pipeline projects or repaying existing debt.
Units of Clint rose 0.8 per cent to close at S$1.27 on Monday, before a trading halt was called on Tuesday.
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