Ascendas has launched a $500 million fund to invest in integrated real estate projects in India. It will take a 26 per cent stake in Ascendas India

Ascendas has launched a $500 million fund to invest in integrated real estate projects in India. It will take a 26 per cent stake in Ascendas India Development Trust (AIDT), which has a target asset size of $1 billion.

JTC Corp subsidiary Ascendas describes itself as a ‘business space solutions provider’ but the new fund could see it establish itself in other property sectors.In a statement yesterday, it said: ‘Specifically, Ascendas will develop the business space within these projects, while participation in residential, commercial, retail, hotels, recreation and other supporting uses will be through and with other parties.’

Ascendas recently announced a $270 million expansion plan for its International Tech Park Bangalore, which has a mixture of IT business, residential and retail space.Ascendas president and chief executive Chong Siak Ching said yesterday: ‘AIDT offers an opportunity for our fellow investors to tap the rapid growth of the Indian real estate sector, riding on India’s strong economic performance.’

Investors in AIDT include Bahrain-based Arcapita and ING Private Banking.Arcapita’s head of real estate investment Asim Zafar said: ‘We believe this collaboration will be the start of a strengthening relationship between Ascendas and Arcapita as we look at other opportunities in India and elsewhere.’

Two Indian IT park development projects announced earlier by Ascendas will be carried out through AIDT. A project in Nagpur is estimated to cost about US$235 million, and another in Pune is pegged around US$140 million.

Ascendas said previously that these two parks will take Indian assets above US$850 million. Its other IT parks are in Bangalore, Chennai and Hyderabad.AIDT will be headed by Ascendas’s newly appointed CEO of India funds Jonathan Yap. He will also manage Ascendas’s first private Indian real estate fund, Ascendas India IT Parks Trust, and other India funds in the pipeline.

On the possibility of new real estate investment trusts, he said: ‘Some of the possible exit options for AIDT include the sale of completed assets, the sale of the company owning the assets and tapping the public market for listing.‘

Some of these properties could eventually go into the Ascendas Real Estate Investment Trust (A-Reit). The CEO of A-Reit manager Ascendas-MGM Funds Management, Tan Ser Ping, said: ‘We will evaluate in the future if such opportunities arise.’

Like CapitaLand’s CapitaMall Trust, which has a stake in CapitaRetail China Trust, A-Reit could take a stake in Ascendas’ property funds, though Mr Tan said: ‘There is no such plan at the moment.’

AIDT is constituted in Singapore as a private trust and has a term of eight years extendable by two years. It will be managed by Ascendas.

Source: The Business Times, 14 June 2007