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Real estate major DLF is set to launch Real Estate Investment Trusts (REITs) next year and is looking for strategic and financial partnership with global players.
‘Reviewing options’ The company, in its analyst presentation after the second quarter financials, said it is reviewing all strategic options so that it maintains its leadership position in the market.
It will “create one or more sizeable REIT platform next year — one for Office and the other for Retail to recycle capital for further growth and spin-off the RentCo (rental business) attributable debt.”
It will also create long-term free cash flows for the company in the form of dividend flows as holders of REIT units and fees from the management of the same.
To achieve the same, the company is exploring partnership with global players, both strategic and financial partners, who may have an interest in participating with DLF in this foray, the company said in the presentation. This could include encashing the company’s part investment in RentCo business.
Debt In August, SEBI had cleared new norms for setting up and listing of REITs and InvITs.
According to the presentation, DLF’s net debt stands at ₹19,944 crore as on September 30. The company said the current attributable net debt to development housing business (DevCo) contributed about ₹6,000 crore and rental business (RentCo) ₹14,000 crore.
It also said that it is “getting ready for a large commercial mortgage-backed securities offering of ₹3,600 crore approximately, adding that indicative ratings by two rating agencies are in place and it is awaiting final rating evaluation letters to further improve the quality of debt.”
The company aims to keep the net debt of the DevCo range bound (+/-) ₹1,000 crore across medium-term through tactical divestments to or joint ventures with strategic or financial investors.
The company currently has a land bank of 294 million square feet.
Remits ₹50 cr fine On the COMPAT order, DLF said it has deposited ₹50 crore with the Supreme Court and will pay the balance by November 25 to comply with its direction to deposit ₹630 crore fine slapped by Competition Commission of India.
With respect to the SEBI order barring the company and its six executives from accessing the capital market for 3 years, DLF said, “The company has filed an appeal with the Securities Appellate Tribunal (SAT), against the order of SEBI. SAT has provided an interim relief to the company for redeeming mutual funds to the tune of ₹1,806 crore. The final hearing is scheduled for December 10.”
Based on the advice of independent counsels, the management believes that there is a reasonable strong likelihood of succeeding in various judicial forums, the company said, adding that DLF and its legal advisors believe that it has not acted in contravention of law in any of the legal matters pending before various judicial forums.
On Friday, the shares of DLF ended at ₹141.80, up 2.09 per cent, on the BSE.
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