BENGALURU and MUMBAI: Ascendas India Trust (a-iTrust), an Indian property trust managed by Singapore-based Ascendas Property Fund Trustee, is close to buying 15.86 acres of land from Kansai Nerolac Paints in Chennai in a deal valued at Rs 440 crore.
Nerolac had used the land in Perungudi on the Old Mahabalipuram Road to house its manufacturing operations at one of five such factories across the country, people familiar with the development said. The company had shifted its manufacturing base to Hosur near Bengaluru after the unit closed down over a decade ago.
"The land falls under the industrial zone. Ascendas is the highest bidder as the base bid of Rs 430 crore," said one of the people involved in the deal, who did not wish to be identified.
An email query sent to Kansai Nerolac Paints did not elicit any response until late evening on Monday.
"Ascendas continuously reviews and assesses potential new acquisitions in line with its stated growth strategy in India. We do not comment on market speculation and will, at the appropriate juncture, announce any material development," an Ascendas spokesperson said in an email response.
Other builders, who were in the race for this deal, include RMZ and a Chennai-based local developer. "The highest bidder is expected to submit the money by Friday. The property is likely to be bought by Ascendas unless another bidder submits a higher bid," said another person.
Ascendas is planning to build a mixed development project, including IT and residential components on this plot.
Nerolac Paints is a subsidiary of Japan-based Kansai Paints, which is engaged in the business of industrial, powder and automotive coating. The Mumbai-headquartered company is the largest industrial paint company and second-largest decorative paint company in the country.
Ascendas has over 38 per cent of its assets in Bengaluru's IT city, followed by Hyderabad, Chennai and Pune. The fund recently acquired Pune-based IT SEZ Blue Ridge, phase-II for Rs 640 crore that will help it achieve nine-million square feet of asset portfolio.
Global funds have been actively scouting and investing in projects in India's growing real estate market by forming joint ventures with builders or investing in real estate funds. In the largest real estate private equity transaction since the beginning of the year, Canada Pension Plan Investment Board, which makes big-ticket private equity investments, is expected to buy Shapoorji Pallonji's business park in Chennai for Rs 1,500 crore. Blackstone and Brookfield Asset Management together acquired assets worth Rs 12,500 crore last year.
According to a recent report by global real estate consultants Cushman & Wakefield, India was among the top 20 investment destinations in 2014, with a total of $5 billion (about Rs 31,000 crore at current exchange rate).
The country recorded the third-highest growth in investments, an increase of over 140 per cent in total investment over that of 2013. Private equity investments in real estate, more than doubled in 2014 to Rs 15,410 crore, indicating renewed interest among domestic and foreign investors.