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DLF Ltd is expanding its retail and office portfolios and several sources indicated that a REIT offering could again be in the works now and the process for it initiated this year.
In February, the company had said it was not launching a REIT this year due to the rising interest rate scenario and global uncertainty.
However, with India inflation cooling down, and after the Reserve Bank of India paused its rate hike cycle, there is a feeling that rates are likely to hold steady for now.
The company is also ready with the structure of the REIT. DLF declined to comment on the story.
Expansion
The company is planning to expand its retail portfolio by doubling its mall assets to 9 million square feet (msf).
The majority of the expansion, ranging from 2.5 to 3.6 msf, will be included in the books of its subsidiary, DLF Cyber City Developers (DCCDL), while the remaining 1.4 to 1.5 msf will be with DLF.
In the office segment, it has 5.4 msf of space under construction at DLF Downtown Gurgaon and DLF Downtown Chennai, of which about 63 per cent is pre-leased. Its current portfolio of rent yielding assets is at 40 msf, with an average occupancy of 90 per cent.
Performance
In FY23, the DCCDL reported ₹5,300 crore revenue, up 21 per cent on year while EBITDA at ₹4,000 crore, up 20 per cent. Net profit rose 38 per cent to ₹1,396 crore.
The mall portfolio being developed under DLF will be transferred to DCCDL after its completion and fully leased, officials said.
That is, however, a decision that has to be taken jointly with Singapore’s sovereign wealth fund GIC, which has 33.3 per cent stake in DCCDL. DLF officials said that the transfer would be worked out later.
The performance of listed REITs such as Embassy Office Parks REIT, Mindspace Business Parks REIT, and Brookfield Real Estate Trust and more recently the subscription to the initial public offering of Blackstone’s Nexus Select Trust is encouraging more real estate developers to monetise their commercial portfolio through a REIT listing.
Last month a senior executive of Prestige Estates Projects had told businessline that the company was building more office projects with a view to a REIT listing in the near future.
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