Ascendas, the Singapore government-owned industrial park developer, which has so far been focusing only on the IT sector in India, would soon invest a total of Rs 3,000 crore in two massive projects?one near Mumbai and another adjacent to Chennai?to develop townships, start high-value engineering and electronics industries as well as special economic zones (SEZ).
Speaking to FE on the sidelines of a conference here on Saturday, Pang Yee Ean, senior vice-president (India Operations), Ascendas, said, ?At the Indian government’s invitation, we are looking at investing Rs 1,500 crore each near Mumbai and Chennai. This initial investment will go into industrial development and creating townships. The sectors that we are looking at are high-value engineering and electronics. Some part of these projects will be in new SEZs.?
Ean said the Rs 3,000 crore investment is significant, as companies from Japan, Europe, Taiwan and China have evinced keen interest in being part of the projects. Without disclosing the names of the companies, Ean said, ?these companies are quite optimistic about the Indian economy and are keen to tap the huge domestic market here.?
Asked if Ascendas was concerned about the recent slowdown in manufacturing and overall industrial production as well as in the realty sector, Ean said, ?though we are a little bit worried about it, our investment is part of our long-term commitment to India. We will develop these properties and then lease it out. We are confident that we will get good returns.?
One of the new projects that the company is envisaging near Mumbai could be part of the prestigious Delhi-Mumbai Industrial Corridor.
On the financing aspect, Ean said, ?we have private funds. When the properties mature and become income-yielding, we can explore the REIT (real estate investment trust) option.? He said the company was also examining picking up significant stakes in SEZs that are doing well.
The total asset under management in India of Ascendas is to the tune of $1.05 billion and the total area under management in India is 6 million sq ft. The company has been in India for the last 13 years. In June last year, it had launched a $354.5 million private development fund called Ascendas India Development Trust (AIDT).
The fund with a target asset size of $710 million is aimed at making investments in integrated development real estate projects the country, including complementary land for residential, commercial and retail use. Then in August 2007, the company launched Ascendas India Trust (a-iTrust) as Singapore?s first listed Indian property trust.
This new investment is significant as Ascendas, until now, limited itself to investment, development and management of IT Parks. Currently, the company has over 265 acres of development spread across six cities in the country including four IT SEZs projects. In April this year, AIDT entered into a 50:50 joint venture with IREO, a leading foreign investor in Indian real estate with an asset portfolio of about $2.0 billion, to develop an integrated project, comprising an IT SEZ, in Coimbatore, in over 53 acres. In the same month, AIDT announced the proposed development of a 62-acre integrated residential and commercial space project including an IT SEZ in Gurgaon, in partnership with Dr. Fresh Healthcare Services.
