Net debt of the rental branch of DLF, DCCDL, up 3% to Rs 19,640 cr; prepare the FPI
The DCCDL arm of real estate company DLF, which owns most of its office space and rental assets, reported a 3% increase in net debt to Rs 19,640 crore in the September quarter due to an increase in investments.
DLF Cyber City Developers Ltd (DCCDL) is a joint venture between DLF Ltd and the Singapore sovereign wealth fund GIC. DLF owns nearly 67% of the capital of the company JV, while GIC holds the rest.
According to an investor presentation, DCCDL’s net debt rose to Rs 19,640 crore as of September 30, 2021 from Rs 19,072 crore at the end of the first quarter of this fiscal year.
58 percent of DCCDL funding comes from banks, and about 78 percent of expected repayments are over 3 years.
The latest debt has been increased at interest rates below 7 percent.
“Level of debt to be maintained in the short term; significant reduction expected after registration with REIT (Real Estate Investment Trust), ”said DCCDL, adding that“ progress in preparing for DCCDL REIT remains on track ”.
In June, DLF said its rental arm DCCDL would be fully ready within the next year for the launch of REIT, but the timing of the public offering would be decided by the two JV partners based on market conditions.
DCCDL has rental business assets (office and retail) of approximately 35 million square feet, with approximately 3,500 crore in annual rental income.
It is currently constructing 4.5 million square feet of office buildings in Gurugram and Chennai, resulting in increased capital spending.
Speaking of rental operations, the DCCDL said rent collection has remained stable and the long-term outlook remains positive.
On the office market front, he said feelings improved after the second wave of the COVID pandemic.
“The collections remain 100% robust. Office footfall is still low and has an impact on sentiment,” said the presentation.
Regarding commercial assets, DCCDL said all shopping centers are operational.
“Consumption and attendance levels continue to witness a strong recovery. International luxury brands continue to outperform,” the presentation said.
DCCDL’s revenue grew 8% to Rs 1,123 crore while net profit rose 36% to Rs 231 crore in the second quarter of the current fiscal year.
In December 2017, DLF had formed a joint venture with GIC after its promoters sold their entire 40% stake in DCCDL for almost Rs 12,000 crore.
The deal included the sale of 33.34% of DCCDL’s shares to GIC for approximately Rs 9,000 crore and the repurchase of the remaining shares valued at approximately Rs 3,000 by DCCDL.
DLF has so far developed 153 real estate projects and developed an area of approximately 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 “Rent Business”).
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