BENGALURU: India's largest real estate developer DLF has explored options to monetize some commercial assets worth about $500 million or Rs 3,000 crore, with a clutch of global investors to allay concerns about the company's fund-raising flexibility in the face of a regulator ban, multiple sources directly aware of the matter said.
GIC of Singapore, Blackstone and IT park developer Ascendas are among the investors who were approached as potential suitors for some of DLF's tenanted offices. However, sources cautioned that discussions were tentative even as the developer is fighting a Sebi ban on raising funds from Indian capital markets for three years.
DLF has a rent-yielding office portfolio of around 30 million sqft spread across cities, making it the country's biggest landlord of commercial assets. The Gurgaon-based company could offload part of its portfolio, outside the National Capital Region, to investors who are keen on buying Indian office buildings, sources added.
TOI last week reported that foreign investors bought in to Indian office property worth over $2 billion this calendar, a four-fold jump in their appetite for commercial assets with stable yields.
"DLF is exploring various options to boost confidence of their investors and bankers. The preliminary moves to monetize some commercial assets may be part of this exercise. The talks depend on the progress of their appeal against the regulator ban," said an investor who did not wish to be named as talks are private.
In response to an e-mail query from TOI, a DLF spokesperson replied through a text-message that read, "Your information is completely speculative and as a company policy we do not comment on market speculation."
Sources said DLF was exploring the prospect of hiving off leased and under development IT parks located in South India. The company has large operational office campuses in Chennai and Hyderabad totalling to over 5-million sqft. In Pune, DLF already sold one of its IT parks to Blackstone for Rs 800 crore a few years ago, while another IT campus is under development.
According to DLF's 2014 annual report, the company's lease portfolio of office and retail space stood at 29.4 million sqft that yielded an income of Rs 1,950 crore.
In October, Sebi banned DLF and its top directors from accessing the capital markets for three years, as the regulator claims that the company curbed information during its public float seven years ago, among other issues. DLF is contesting the ban order with the Securities Appellate Tribunal, the hearing for which is underway. As of March this year, DLF had a net debt of Rs 18,526 crore as compared to Rs 21,731 crore in the same period a year ago.