Net proceeds from this divestment, if assumed to repay debt will strengthen the trust’s balance sheet, will help lower gearing to 36.8% from 38.5%.
The deal is expected to be DPU and NAV neutral, with both metrics staying the same pre-and-post the transaction.
From the perspective of DBS, the divestment signals CLINT's renewed focus on portfolio reconstitution, by divesting legacy and older assets close to optimal values and reinvesting the proceeds towards higher-yielding or assets with longer runway of growth, such as data centres.
DBS notes that following the divestment, CLINT will still retain sizeable platforms in Chennai and Hyderabad anchored by international tech parks and upcoming data centres, keeping exposure to growth clusters while pruning smaller/non-core properties.
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"Our estimates are maintained for now, pending completion," says DBS, whose target price is $1.50.
CLINT units changed hands at $1.18 as at 11.50 am, up 0.85%. Year to date, it is up 10.19%.
