DLF to launch REITs next fiscal, plans Rs 3600cr CMBS
The aim is to monetise its commercial properties and it is in discussion for partnerships
Nov 15, 2014
Source : Business Standard


New Delhi: DLF, the country’s largest real estate company, plans to launch Real Estate Investment Trusts (Reits) in the next financial year. The aim is to monetise its commercial properties and it is in discussion for partnerships.

Its net debt grew by Rs 817 crore during the second quarter of this financial year to Rs 19,944 crore. It also plans to raise Rs 3,600 crore through an issue of securities backed by commercial assets, to replace costlier debt.

“We are in the process of internally setting up platforms by next year — it will be either one or a couple of platforms in office and retail space. We are in discussions with a number of players, strategic and financial. REIT will happen early next fiscal and will happen in our subsidiaries,” executive director (finance) Saurabh Chawla told analysts in a conference call. earns about Rs 2,100 crore a year from its rental business, expected to grow to Rs 2,600-2,750 crore by March 2017.

In September, the Securities and Exchange Board of India had notified the norms for listing of business trust structures. REITs with tax incentives will enable more funds to flow into the realty and infrastructure sectors.  DLF is also seeking to create long-term free cash flows in the form of dividends, as holders of REIT units and fees from the management of these.

“To achieve this, the company is exploring partnership with other global players, both strategic and financial partners, who might have an interest in participating with DLF in this foray. This could include encashing the company’s part investment in the RentCo business,” the company said. On Thursday, DLF reported a nine per cent rise in consolidated net profit at Rs 109 crore for the quarter ended September, on account of higher sales and lower expenses. According to an analyst presentation, net debt was Rs 19,944 crore, against Rs 19,127 crore at the end of June.

Of the total debt, the development (housing) business contributed about Rs 6,000 crore and rental business Rs 14,000 crore. It intends to keep the former’s net debt aroundof the development business range-bound by Rs 1,000 crore across the medium term, through tactical divestments to or joint ventures with investors.

DLF is also readying a large (commercial mortgage-backed securities) offering of Rs 3,600 crore. In May, it had launched the country’s first CMBS, to raise Rs 525 crore against a shopping mall, the DLF Emporio in Delhi. In June, it raised another Rs 375 crore through a CMBS backed by ‘DLF Promenade’ mall.

DLF is also contesting a heavy penalty imposed by the Competition Commission of India. It has deposited Rs 50 crore in court and will pay the balance by November 25 to comply with the Supreme Court’s direction to first deposit the entire Rs 630 crore fine. The penalty came in a case filed by buyers in a Gurgaon housing project.

Latest Realty News

'BDA to Meet Housing Needs of City'
Nov 15, 2014
BHUBANESWAR: Vice Chairman of Bhubaneswar Development Authority Krishan Kumar said, the State Capital Region Development Fund (SCRDF), a corpus set up by the development body, has, so far, managed to mobilise `100 crore
Alembic launches realty project in Bengaluru
Nov 15, 2014
Ahmedabad: Alchemy Real Estate, real estate arm of the 107-year-old Vadodara-based Alembic Group of companies is all set to enter the Bengaluru real estate market with the launch of luxury apartment project ‘Urban Forest’
DB Realty inks pact with ABIL for Bandra East MIG project
Nov 15, 2014
Mumbai: Real estate player DB Realty Limited signed a joint development agreement with Pune based-Avinash Bhosale Group (ABIL) for Bandra East MIG project
Building dept circulars must go online: HC
Nov 14, 2014
MUMBAI: The Bombay high court directed the BMC to be entirely transparent and place online all circulars issued by its building proposal department
Tenders to be floated soon to develop two smart cities: Government
Nov 14, 2014
MUMBAI: The Centre has identified two places — Dholera in Gujarat and Shendra-Bidkin in Maharashtra — for developing them as smart cities
Indiabulls AMC planning to raise Rs 1,000 crore via realty fund
Nov 14, 2014
MUMBAI: Indiabulls AMC Ltd is planning to raise a total of Rs 1,000 crore through a real estate fund
Land curb heat on Mamata - Babul fires reforms salvo
Nov 14, 2014
Calcutta: Central minister Babul Supriyo said the Bengal government’s failure to bring in reforms, such as scrapping land ceiling rules, was to blame for central funds drying up for urban development projects
Govt to relax exit option for FDI in real estate
Nov 14, 2014
New Delhi: In order to give a thrust to its ambitious plan of ‘homes for all by 2022’, the Government is planning to make exit easy for foreign investors
Puravankara Projects' arm to foray into Mumbai
Nov 14, 2014
MUMBAI: Provident Housing, the affordable housing arm of Bengaluru-based Puravankara Projects, plans to foray into bigger property markets including Mumbai, National Capital Region, Pune and Hyderabad
Official land rate touches Rs 20,000 per sq ft in Bengaluru
Nov 14, 2014
BENGALURU: Residential land prices in Bengaluru are set to go north with an increase in guidance value

Latest Realty News Of State

Realty Talk's