News: DLF to be REIT ready in few months : CEO-19-05-2022
Real estate developer will be REIT ready in the next couple of months after completion of a majority of the preparatory work, senior executives of the company told investors during the Q4 analyst call.
Most of the key decisions in terms of downstream, mergers and all, in principle, have been frozen, the asset perimeter has been frozen. We will, I think, sometime in the next four weeks have a Cybercity board meeting. So those issues are now hopefully behind us and we should be completely ready in the next few months, "said Ashok Kumar Tyagi, Whole Time Director & CEO of DLF Limited.
DLF had hired three top advisory firms – Morgan Stanley, KPMG, and Shardul Amarchand Mangaldas & Co – to help it prepare its rental-yielding commercial assets for a REIT listing in February of last year.
"Then it's a question of a multiplicity of factors, including the interest rate, the timing and comfort of the two shareholders, and the improving vacancy levels, which will drive the timing of them. I would hate to conjecture on a speculative timeline, but as far as readiness is concerned, I think we are making good progress, "Tyagi said.
DLF Cyber City , the rental arm of the company, was on a recovery path with occupancy at 88% at the end of the fiscal and retail business income increasing 67% year on year (Y-on-Y).
Rental income increased by 10% year on year.
"The preparations are at an advanced stage. There's been a fair number of discussions with the bankers, tax advisers etc. And our preparation should be ready in the next couple of months. Thereafter it is for the shareholders to decide when they would like to do it," Sriram Khattar, MD-rental business at DLF, told investors while talking about REIT.
The company's total revenue for the year was Rs 4,533 crore, which is 3% more than the Rs 4,385 crore it made the year before.
"This has been a pretty robust year on the sales front and the resilience that our commercial leasing business has shown. The market continues to be robust and, that's the reason we are scaling up, "Tyagi told investors.
India’s first REIT was listed in April 2019 by the Embassy Group and Blackstone-backed Embassy Office Parks.
"On the commercial leasing side, our office business, despite some extremely tough times, demonstrates phenomenal resilience in collections," Tyagi said.
DLF is India’s biggest office space operator, with about 38 million sq ft of completed offices. The company's leadership believes that office demand will be robust in the coming months.
