DLF DCCDL rental arm net debt up 3% to Rs 19,640 cr in September qtr; Preparing the REIT

DCCDL, the major property arm of DLF, which owns the bulk of its office and rental assets, reported a 3% increase in net debt to Rs 19,640 crore in the September quarter due to the increase in investments. DLF Cyber ​​City Developers Ltd (DCCDL) is a joint venture between DLF Ltd and Singapore sovereign wealth fund GIC. DLF holds almost 67% of the capital of the JV company, while GIC holds the rest.

According to an investor presentation, DCCDL’s net debt increased to Rs 19,640 crore as of September 30, 2021 from Rs 19,072 crore at the end of the first quarter of this financial year.

58% of DCCDL’s funding comes from banks and about 78% of scheduled repayments are over 3 years.

The last debt was raised at interest rates below 7%.

“Debt levels to be maintained in the near term; significant reduction expected after REIT (Real Estate Investment Trust) listing,” DCCDL said, adding that “progress to prepare DCCDL REIT remains on track.”

In June, DLF said its DCCDL rental arm would be fully ready in the coming year for REIT launch, but the timing of the public offering would be decided by the two JV partners depending on market conditions.

DCCDL has commercial rental assets (offices and retail) of around 35 million square feet, with annual rental income of around Rs 3,500 crore.

It is currently constructing 4.5 million square feet of office buildings in Gurugram and Chennai, resulting in increased capital expenditure.

Speaking of rental business operations, DCCDL said rent collections have remained stable and the long-term outlook remains positive.

In the office market, he said sentiment has improved after the second wave of the COVID pandemic.

“Collections remain 100% robust. Office footfall is still low and impacting sentiment,” the presentation reads.

On retail assets, DCCDL said all malls are operational.

“Consumption and footfall levels continue to experience a strong recovery. International luxury brands continue to outperform,” the presentation reads.

DCCDL’s revenue increased by 8% to Rs 1,123 crore while net profit increased by 36% to Rs 231 crore in the second quarter of the current financial year.

In December 2017, DLF formed a joint venture with GIC after its promoters sold their entire 40% stake in DCCDL for almost Rs 12,000 crore.

This agreement included the sale of a 33.34% stake in DCCDL to GIC for approximately Rs 9,000 crore and the repurchase of the remaining shares worth approximately Rs 3,000 crore by the DCCDL.

DLF has so far developed 153 real estate projects and developed an area of ​​about 330 million square feet.

The company currently has 215 million square feet of development potential in the residential and commercial segments. The group has an annuity portfolio of over 35 million square feet.

DLF is primarily engaged in the development and sale of residential properties (the “Development Business”) and the development and leasing of commercial and retail properties (the “Annuity Business”).

Ann J. Cox