DLF to raise Rs 2,000 cr via sale of land to existing or new JV partners

Realty major DLF is looking to raise Rs 2,000 crore through monetisation of certain commercial land parcels to its existing joint venture partners or new partners.

The monetisation of land parcels would help the company in reducing its net debt, which stood at Rs 4,866 crore at the end of December quarter.

In its investor presentation, DLF said the company is committed to further deleveraging in the near future.

The company intends to monetise select commercial land parcels through its existing joint venture arrangements and/or new alliances.

DLF already has a joint venture with Singapore's sovereign wealth fund GIC for rental business.

"Exploring further monetization of certain identified land parcels for rental development by way of its existing JV arrangements and/or new alliances; potential raise of around Rs 1,750-2,000 crore," DLF told investors.

Apart from that, the company said that "certain identified recoveries including from certain land entitlements of Rs 700-800 crore to be transferred to existing JV arrangements will further help in deleveraging".

The operating cash flow surplus will help in reduction of the remaining debt by around 50 per cent, while the residual debt would be serviced through financing against rental assets at an attractive interest rates.

To monetise its commercial assets, DLF in December 2017 entered into a joint venture with GIC when DLF promoters sold their entire 40 per cent stake in DLF Cyber City Developers Ltd (DCCDL) for nearly Rs 12,000 crore.

The deal included sale of 33.34 per cent stake in DCCDL to GIC for about Rs 9,000 crore, and buyback of remaining shares worth about Rs 3,000 crore by DCCDL.

DLF has a rental portfolio of about 36 million sq ft, of which around 32 million sq ft is office space and rest is retail properties. It earns an annual rental income of over Rs 3,000 crore from these leased assets.

Earlier this month, DLF reported a 24 per cent increase in consolidated net profit at Rs 414.01 crore for the quarter ended December as against Rs 335.15 crore in the year-ago period.

Total income fell 36 per cent to Rs 1,533.34 crore in the third quarter of 2019-20 from Rs 2,405.89 crore in the corresponding period of previous year.

DLF to invest Rs 13,000 cr to develop office spaces in Gurugram, Chennai

Real estate developer DLF is planning to construct nearly 20 million sq ft of office space with an outlay of Rs 13,000 crore. The project likely to be completed in a period of 6-7 years will mostly be based out of Gurugram in Haryana and Chennai.

Speaking on the sidelines of a foundation laying ceremony by Chief Minister K Palaniswami, DLF's CEO Mohit Gujral said that of the proposed 20 million sq ft space, 11 million sq ft will be in Gurugram and around 7 million sq ft will be at Chennai. The project will see an investment of Rs Rs 7,500-8,000 crore in the Haryana district and Rs 5,000 crore in Chennai.

During Phase-I, the company will invest around Rs 1,200-1,500 crore to develop 2.5 million sq.ft and the company hopes to finish the remaining work in less than six years, said Sriram Khattar, managing director, DLF Rental Business.

Commenting on revenue generation prospects, Khattar, who was "cautiously optimistic", said DLF Cyber City at Manapakkam near Chennai is spread over around 7 million sq.ft and it generates annual rental of around Rs 550 crore in revenues, so it can be a benchmark.

Palaniswamy on Thursday laid the foundation stone for DLF's new IT/ITeS 'DLF Downtown' being developed at a cost of Rs 5,000 crore. In his address, Palaniswami said, "due to the constant efforts of my government, many new investment projects are being commenced successfully in Tamil Nadu".

The MoU for the project was signed with the Tamil Nadu government about ten years ago, however, it did not take off for various reasons including issues with land allocation. With the new project at Taramani, Chennai will become the second-largest market for DLF after Gurugram.

DLF has office spaces spread over 32 million sq.ft of area across Delhi NCR, Chennai Hyderabad, Kolkata, and Chandigarh.

After Gurugram, DLF eyes Chennai; to invest Rs 5,000 cr in and around city

DLF is planning to invest around Rs 5,000 crore to build commercial projects in Chennai. The company will be developing 6.8 million sq ft space.

The new project is DLF's fourth project in the city, said Mohit Gujral, CEO, DLF.

Around 2.5 million sq ft of built up area will be delivered in the first phase, he said at the project's foundation stone laying function.

Tamil Nadu Chief Minister Edapaddi K Palaniswami laid the foundation stone of DLF Downtown located in Taramani, which has emerged as a major commercial area.

DLF in a joint venture with Tidco is developing a campus spread over 27 acres. DLF Taramani will add additional 70,000 direct and 6,000 ancillary employment opportunities once fully operational, he said.

The city will become the company's second largest market after Gurugram.

Sector watch: Nifty Realty index nears 52-week high; DLF hits 22-month high

Shares of real estate companies were in focus on Friday with Nifty Realty index rising 2 per cent, hitting an over five-month high led by DLF and Oberoi Realty.

At 02:35 pm; Nifty Realty index was up 1.8 per cent at 287.50 points, as compared to 0.91 per cent in the benchmark Nifty 50. The realty index hit an intra-day high of 288.55, its highest level since July 5, 2019. The index is 2.4 per cent away from its 52-week high level of 295.50.

DLF was trading higher for the third straight day, up 3 per cent at Rs 231 on the NSE. The stock real estate developer hit 22-month high and trading at its highest level since February 2018. The market value of DLF has zoomed 62 per cent from its October lows of Rs 142, against 8 per cent rallied in the benchmark index. The stock was included in the MSCI Global Standard Index with effect from November 26, 2019.

DLF posted positive pre-sales trajectory for a second consecutive quarter across the development portfolio, settlement of DLF Cyber City Developers Limited (DCCDL) dues and strong lease rental momentum.

While announcing Q2 results on November 7, the management said the development business has been performing well, and achieved net sales of Rs 725 crore in Q2, and expects this momentum to sustain. Pursuant to the settlement of inter-company payables, the net debt for the company stood at Rs 4,461 crore at the end of the quarter. We are committed to reducing it in the near term, it added.

“DLF’s luxury portfolio is expected to see increased momentum in 2HFY20E. With strong balance sheet, robust lease momentum and residential pre-sales expected to pick-up in 2HFY20, DLF is well placed,” according to analysts at HDFC Securities. The brokerage firm maintains ‘buy’ rating on the stock with 12-month target price of Rs 258 per share.

Meanwhile, Christopher Wood, global head of equity strategy at Jefferies has replaced his investment in Godrej Properties with DLF. 

As regards to Oberoi Realty, analysts at Antique Stock Broking maintain a ‘BUY’ rating with target price of Rs 630 per share, keeping in mind the impending new project launches in Thane and Goregaon and substantial progress in underconstruction annuity assets. The brokerage firm believes company is poised for strong growth in volume once the Thane/ Goregaon projects are launched. The stock was trading 4 per cent higher at Rs 528 on the NSE on Friday.

DLF operating revenue falls 20% to Rs 1,716 crore in September quarter

Real estate major DLF reported a 19.8 per cent year-on-year drop in consolidated operating revenue for the July-September quarter, to Rs 1,716 crore. Expenses towards cost of land, plots, constructed properties and developmental rights dropped 28 per cent, to Rs 885 crore.

During the quarter, it utilised Rs 1,036 crore (of the Rs 2,250 crore it had got against exercise of warrants in June) towards repayment of bank loans. And, another Rs 149.5 crore for working capital requirement, including loans to subsidiaries. It had invested another Rs 288.4 crore, DLF informed the markets regulator.

Cost of finance came down by 16 per cent. Consolidated profit before tax remained flat at Rs 517.6 crore.

On a standalone basis, profit before tax jumped 464 per cent to Rs 1,967 crore, as it received Rs 1,939.4 crore as dividend from DLF Cyber City Developers, a JV group company.

Standalone total revenue also grew over last year, with the dividend received. After taking the latter

into account, it reported total income of Rs 2,556 crore for the quarter, 166 per cent higher than in the same period last year.

DLF sells 9 acre land to American Express for Rs 300 cr in New Gurugram

Realty major DLF has sold a 9 acre land parcel in New Gurugram to American Express for about Rs 300 crore in one of the costliest land deals in this area, sources said.

The selling price comes out to be around Rs 32 crore per acre.

American Express will develop a large campus on this land parcel, which is located in Sector 74A, known as New Gurgugram, they added.

When contacted, DLF's MD (Rental Business) Sriram Khattar and DLF group CFO Ashok Tyagi confirmed the development.

"This transaction creates a benchmark of value of the land in the area around Southern Peripheral Road (SPR) and NH-8 where the Haryana government has made a lot of effort to develop infrastructure," he added

Khattar said the company would extend all help to the government for the development of New Gurugram as it did for Gurugram.

DLF is already developing a number of projects in this part of the IT city.

Promoters infuse Rs 2,250 crore in DLF against issuance of new equity share

Promoters of realty major DLF have infused Rs 2,250 crore in the company against issuance of new equity shares. The fresh infusion through two holding entities — Rajdhani Investments & Agencies and DLF Urva Real Estate Developers & Services — takes the promoters’ collective stake to 74.95 per cent in the company.

The Gurugram-headquartered company on Thursday informed the BSE that the current trench of capital invested concludes the induction of capital of Rs 11,250 crore by the promoter/promoter group as planned in December 2017.

In 2017, the DLF board had chalked out a ‘game-changer’ plan, encompassing stake sale in its rental arm DLF Cyber City Developers (DCCDL) and infusing the capital in the company. In December 2017, the group had sold its entire 40 per cent in DCCDL to raise Rs 11,900 crore. This deal included the sale of a 33.34 per cent stake in DCCDL to Singapore’s sovereign wealth fund GIC for Rs 8,900 crore and buyback of remaining shares worth Rs 3,000 crore by DCCDL.

Chart Soon after, the promoters had infused Rs 9,000 crore in DLF through issuance of compulsorily convertible unsecured debentures. They had also issued warrants, which required them to infuse another Rs 2,250 crore later.

To finish the capital infusion process, the DLF board has now allotted 138.1 million equity shares – at Rs 217.25 each — against the convertible debentures. Earlier in May, the board had issued 130 million shares at the same rate.

With the current infusion, the promoters have 268.1 million new equity shares in their possession since March 31. This raised the promoters’ holding in the firm to 74.95 per cent from 71.91 per cent at the end of the last financial year.

Now, the paid-up equity share capital of the company stands at Rs 495.06 crore comprising 247.53 crore equity shares with face value of Rs 2 each.

As on March 31, DLF had a net debt Rs 4,483 crore, though the company had said it had reduced its debt by Rs 2,741 crore in the preceding December quarter in 2018-19 by raising funds against share sell to institutional investors.

In its third major fundraising exercise since it got listed in 2007, DLF had in March raised Rs 3,173 crore by selling shares to institutional investors through a qualified institutional placement (QIP) offer. Major institutional investors who participated in QIP offer include Oppenheimer, UBS, HSBC, Marshall Wace, Myriad, Key Square, Goldman Sachs, Indus, Eastbridge, Tata Mutual Fund, and HDFC Mutual Fund.