DLF plans to sell ready-to-move-in res­i­den­tial flats in three-four years

HT Estates - - HTESTATES - Press Trust of In­dia ht­es­tates@hin­dus­tan­times.com

Ch­hat­wal said IHCL plans to scale up its room in­ven­tory to around 23,000 rooms by 2022, mostly through man­age­ment con­tracts or an as­set light model.

At present, the com­pany op­er­ates around 16,992 rooms across the world. It would be open to build­ing al­liances with the other com­pa­nies in “rel­e­vant seg­ments” to in­crease rev­enues.

“We think, in a global world, we will not be able to do ev­ery­thing on our own. We will be build­ing al­liances... may be with a rental rental (com­pany) or shop­ping com­pany or within the Taj group...that’s like build­ing al­liances both in­ter­nally as well as ex­ter­nal part­ners to lever­age each other,” he said.

Ch­hat­wal added that IHCL plans to mon­e­tise some of its real es­tate as­sets in­clud­ing land banks, apart­ments owned by the com­pany and other non per­form­ing as­sets.

“We have a lot of land banks... and many such op­por­tu­ni­ties where we can mon­e­tise and de­velop them. We will un­lock some of them through part­ner­ships with cap­i­tal in­vestors, pri­vate eq­uity com­pa­nies, in­surance or our own in­ter­nal Tata sources,” he said.

“Its im­por­tant to spread them­selves (IHCL) in dif­fer­ent bas­ket. While you cre­ate new brands, you can­not re­move time tested brands and his­tor­i­cally proven brands. One has to be present across the spec­trum. In the last few years, most of the new as­sets are in the Vi­vanta and Gate­way. Soit’s equally im­por­tant to make en­try and cre­at­ing pres­ence felt in mid end and lower end of the mar­ket and at the same time high-end brands has to re­main,” said Gu­lam Zia, ex­ec­u­tive di­rec­tor (ad­vi­sory, re­tail and hos­pi­tal­ity) , Knight Frank In­dia, a prop­erty ad­vi­sory firm. NEW DELHI Realty ma­jor DLF will fo­cus on sell­ing ready-to­move-in flats worth Rs15,000 crore over the next 3-4 years and launch new projects for sale only af­ter reach­ing ad­vanced stage of con­struc­tion.

Out of Rs15,000 crore worth of hous­ing units, around Rs9,000-10,000 crore in­ven­to­ries are in Gur­gaon. The real es­tate sec­tor, par­tic­u­larly hous­ing, is fac­ing multi-year de­mand slow­down, re­sult­ing in slug­gish sales and un­sold in­ven­to­ries.

In an in­vestor pre­sen­ta­tion, the coun­try’s largest realty firm said the com­pany has mod­i­fied its busi­ness model for res­i­den­tial seg­ment. It will “sell com­pleted prod­uct or prod­ucts which are at an ad­vanced stage of com­ple­tion in­stead of sell­ing off a plan”. The new busi­ness model will help the com­pany in achiev­ing higher re­al­i­sa­tion be­sides mit­i­gat­ing reg­u­la­tory risks and de­lays be­yond its con­trol, DLF said.

“Em­pir­i­cally, it has been ob­served that the price of the fin­ished/com­pleted prod­uct is val­ued sig­nif­i­cantly higher than what it is priced at the time of the launch,” the pre­sen­ta­tion said.

In the re­vised model, DLF said the in­crease in work­ing cap­i­tal costs would be mar­ginal as con­struc­tion fi­nance is avail­able at at­trac­tive rates, cur­rently at about 9.25%.

“The com­pany will fo­cus on sell­ing the com­pleted in­ven­tory val­ued at about Rs15,000 crore ( net of pend­ing con­struc­tion pay­ments) on its books over the next 3-4 years,” the pre­sen­ta­tion said.

DLF said the com­pany would start de­vel­op­ment of new projects to cre­ate com­pleted in­ven­to­ries, which would be open for sales in pace with the de­mand for its cur­rent com­pleted stocks.

The realty firm has ini­ti­ated the process to start con­struc­tion of its hous­ing project at Moti Na­gar in cen­tral Delhi. This project, with a to­tal saleable are of about 7 mil­lion sq ft, is in joint ven­ture with GIC, the Sin­ga­pore’s sov­er­eign wealth fund. GIC had in­vested nearly Rs2,000 crore to ac­quire about 50% stake in this project.

In com­mer­cial seg­ment, DLF has al­ready formed a JV with GIC. In the joint ven­ture firm DLF Cy­ber City De­vel­op­ers Ltd (DCCDL), DLF has 66.66% stake while GIC has the rest 33.34% share­hold­ing. GIC ac­quired stake in DCCDL from DLF pro­mot­ers for nearly Rs9,000 crore.

DCCDL holds bulk of rent yield­ing com­mer­cial as­sets of DLF group.

DLF pro­mot­ers have al­ready in­fused Rs9,000 crore in the com­pany and plans to pump in Rs2,500 more. This has helped DLF in re­duc­ing debt sub­stan­tially. At present DLF’s debt stands at about Rs5,500 crore, while the net debt of JV firm DCCDL is around Rs16,000 crore. It’s over­all net debt stood at nearly Rs27,000 crore as on 30 Septem­ber, 2017.

DLF HAS STARTED CON­STRUC­TION OF ITS HOUS­ING PROJECT AT MOTI NA­GAR IN CEN­TRAL DELHI

MINT/FILE

IHCL plans to scale up its room in­ven­tory to around 23,000 rooms by 2022

MINT/FILE

DLF will fo­cus on sell­ing ready­to­move­in flats

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