India's DLF to outline development plans for large land bank

MUMBAI • India's largest property developer DLF will share details of plans to develop its land parcels, as it seeks to allay concerns about the slow pace of monetisation of assets.

The company will provide investors guidance on new residential projects and the cash flow expected from these developments after announcing earnings for the March quarter, chief financial officer Saurabh Chawla said in an interview in Gurugram, near New Delhi.

"We have to communicate to the market our monetisation plan of our large land bank."

Equity analysts have been asking for more visibility into plans to develop holdings of about 235 million sq ft.

Morgan Stanley in a note to clients this month said DLF needs to provide a road map to unlock value in its "large but concentrated" land bank, which includes parcels in Delhi and Mumbai.

Mr Chawla said DLF will soon begin construction work on a 7 million sq ft residential project in central Delhi - an equal venture with Singapore's sovereign wealth fund GIC, which last year acquired the company's rental portfolio for US$1.4 billion (S$1.8 billion) from its founders.

The transaction allowed DLF to substantially reduce its debt.

Work will also begin on a 4.76ha plot in Gurugram and a 2.25ha parcel in the southern city of Chennai, which will be used to develop commercial properties.

The developer is expanding into the cities of Chennai, Hyderabad and Goa to cut dependence on the National Capital Region (NCR), or the cluster of cities around New Delhi, Mr Chawla said.

About 57 per cent of DLF's holding is in NCR, which "could restrict scale-up in operations", according to Morgan Stanley.

Asked if there are any plans to list the rent-yielding assets, Mr Chawla said: "The venture with GIC has just been formed and this dialogue of exit we would have may be seven to 10 years down the road. It is only when GIC wants to exit, we will look at the public listing of the venture. It will be a joint decision by GIC and us.

"It's a very powerful platform - we will add 20 million sq ft in the next seven to 10 years to the 27 million sq ft at present."

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A version of this article appeared in the print edition of The Straits Times on April 19, 2018, with the headline 'India's DLF to outline development plans for large land bank'. Print Edition | Subscribe