India's largest real estate firm DLF will establish its first REITs in the first 6 months of 2015-16.

Balmiki Halder, Guwahati

17th February 2015

Real estate News in Delhi

dlf

real estate investment trust

reits

cci

competition commission of india

ashok tyagi

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Replies (9)

True Spratim,
True Nikhil,
Now, i understand that why DLF adopt DevCo. The company had a net debt of Rs 20965 crore as on March 31, 2015 of which about Rs 14000 crore refered to rental business and the rest was towards DevCo.

Aveek Paul,

1st June 2015

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But the DLF has posted 22% fall in combined net profit at Rs 171.62 crore in the 4th qtr of 2014-15 fiscal, as against Rs 219.68 crore in the year-ago period.

But during the full 2014-15, net profit dropped by 16% to Rs 540.24 crore from Rs 646.21 crore in previous year.

Supratim,

1st June 2015

Hi Aveek & Supratim,
As per the latest news, India's largest realty firm DLF is looking at closing two private equity deals worth around Rs 1000 crore by September 2015 to part-finance its upcoming housing projects in Chennai and Gurgaon.

Farhan Iqbal, Delhi-NCR

1st June 2015

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Very Good Morning Iqbal,
In February' 2014, the co. had announced to raise over Rs. 3000 crore through divestment of stakes in certain housing projects to private equity players. They are targeting at least two deals in the first half of this fiscal worth Rs. 1000 crore.

Supratim,

1st June 2015

@Supratim,
If i am not wrong, due to sluggish housing sales in last few years, DLF has decided to raise private equity funds at project levels to boost cash flows, Private Equity fund will be the alternative for the cash flow which would have normally come from sales.

Farhan Iqbal, Delhi-NCR

1st June 2015

@Farhan,
May be you are right because DLF's sales bookings fell by over 5% to Rs 3850 crore in 2014-15 against Rs 4070 crore in the previous year. Even for the 2015-16 fiscal, DLF has recently given a sales bookings guidance of Rs 3500-4000 crore as the company feels that it would take at least 12 months for the sales momentum to start improving.

Supratim,

1st June 2015

CCI has not passed a judgement but only ordered an inquiry in the legal matter because they felt that the causes of power and the agreement, which they have suggest upon earlier, were prima facie valid.

Aneek Das,

19th February 2015

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But don't forget that the Competition Commission of India has ordered two inquiries into complaints against DLF for alleged abuse of dominant position in Gurgaon over the last two days, involving projects Regal Gardens and Skycourt.

These cases are similar to the ones against DLF's projects Belaire, Park Place and Magnolias, which were filed by residents in 2011 and in which the CCI had imposed a penalty of Rs 630 crore on the company.

Supratim,

18th February 2015

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Thanks for the information Supratim,
On the residential sales front demand is still muted but there are early signs of it coming back. They have done some fresh bookings worth Rs 800 crore in Gurgaon's DLF phase-5 in the last 2 months.

It is expected that they are going to launch a new building in the Cybercity area in Gurgaon in the next few months.

Aveek Paul,

17th February 2015

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Do you know Aveek?
DLF's net debt rose by around Rs 400 crore to Rs 20336 crore as on 31st December. The current net debt attributable to the company's development arm, DevCo, is Rs 6350 crore and that to the rental business, RentCo, is about Rs 14000 crore.

Supratim,

17th February 2015

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@Supratim,
At the same time company is planning to keep its net debt at the current level through "tactical divestments or JV's with strategic or financial investors of certain projects. Current value of deals in pipeline, at various stages of negotiations, due diligence, documentation exceeds Rs 3000 crore.

Aveek Paul,

17th February 2015

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@Aveek,
Company is hoping that the coming budget will provide clarity on tax-related issues for REITs. As per the Ashok Tyagi, CFO at DLF, even if the budget doesn't provide such clarity, DLF could still go ahead with the REIT plan on some of its assets.

Supratim,

17th February 2015

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Hi,
You will be glad to know that the groundwork on REITs is underway. Many strategic and financial investors for REITs are in touch with DLF. Company is planning to form 2 REIT platforms, one for office and another for retail, to smartly monetise its nearly 30 million sq-ft commercial assets to increase cash flows and reduce net debt.

Aveek Paul,

17th February 2015

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