News: DLF expects its rental income to increase more than Rs 1,500 crore over the next four years-17-03-2022
DCCDL has rent-yielding commercial assets, both offices and retail properties, of about 35 million sq ft, the majority of which are in Delhi-National Capital Region. With the office segment’s recovery riding on the economic recovery, the segment is witnessing a steady uptake, especially from international and domestic IT companies.
Real estate developer DLF expects its rental income to increase more than Rs 1,500 crore over the next four years, led by its additional commercial development in Chennai, said a company executive. DLF currently generates rental income of about Rs 3,500 crore across its retail and commercial assets under DLF Cyber City Developers (DCCDL) and the DLF portfolio. “A development like DLF Downtown in a location like Taramani should generate an additional income of Rs 700-750 crore when fully functional,” Sriram Khattar, managing director, DLF Rental Business, told ET. “We have already leased 1 million sq ft to Standard Chartered Global Business Services and that is expected to be delivered by 2024. We are in talks with other clients.” DLF Downtown Taramani is a joint venture between the developer’s rental business arm, DCCDL, and the Tamil Nadu Industrial Development Corporation.
DLF is currently building its second largest project in Chennai with an investment of about Rs. 5,000 crore. DLF Downtown, a 6.8-million sq ft office complex in Chennai, is expected to be finished by 2026. The first phase of 2.2 million sq ft will start yielding rentals in the first quarter of 2023, while an additional 1 million sq ft built to suit the office campus for Standard Chartered Bank will be operational by mid-2024. DCCDL operates a 7.2 million sq ft IT special economic zone at Manapakkam in Chennai, and those assets generate rental revenue of about Rs 600 crore. Singapore’s sovereign wealth fund, GIC, is a key shareholder in DCCDL. DCCDL currently has about 8.5 million sq ft of commercial and retail assets under construction across Chennai, Delhi, Gurgaon and Goa. "We will focus on the existing cities for expansion rather than looking at newer cities,” said Khattar. The rental arm has started the process of structuring its rent-yielding commercial assets into a Real Estate Investment Trust (REIT). However, the timing of the public issue would be decided by both the joint venture partners, DLF and GIC, based on market conditions, according to the company. DCCDL has rent-yielding commercial assets, both offices and retail properties, of about 35 million sq ft, the majority of which are in Delhi-National Capital Region. With the office segment’s recovery riding on the economic recovery, the segment is witnessing a steady uptake, especially from international and domestic IT companies.
The Indian office sector ended 2021 with a net absorption of 11.56 million sq ft for the December quarter, the highest in the past eight quarters, and up 86% sequentially. During the quarter, Bengaluru, Hyderabad, and Delhi accounted for 61% of the total space. Based on the number of people hired in the IT industry recently, Knight Frank India believes the top five IT companies will need more office space in the next one to two years.
