|MUMBAI: In addition to their commercial leasing business engagement, Singapore sovereign wealth fund GIC and realty developer DLF are working on a high-rise residential project with saleable area of 7 million sq ft near central Delhi.|
The project will be located in Moti Nagar area where DLF had bought two separate land parcels from DCM Shriram Consolidated and Lohia Group in 2007. The developer had paid Rs 1,582 crore for the 38-acre property known as Swatantra Bharat Mills and DCM Silk Mills.
DLF has already developed three phases of its residential project Capital Greens and a commercial tower on part of this land.
The project will be DLF’s first residential project under the newly initiated business model of selling ready-to-move-in homes.
DLF and GIC had earlier agreed to set up two joint ventures for developing residential and commercial projects on these plots, and GIC was expected to invest Rs 1,990 crore between these two ventures.
“The project is right now in approval process. We will build and sell the entire project in phases. The first lot of apartments to be sold in this project will come out in the next 3-4 years,” said a senior finance executive at DLF.
Marking a major shift in its business strategy, the company has recently taken a decision to sell only ready-to-move-in apartments from now on. “The company will focus on selling the completed inventory valued at about Rs 15,000 crores (net of pending construction payments) on its books over the next 3-4 years,” DLF said in its investors’ presentation released following the announcement of its earnings for the quarter ended December.
Promoters of DLF have sold their 33.34% stake in its rental arm DLF Cyber City Developers Ltd (DCCDL) to GIC for Rs 8,956 crore. The transaction was concluded on December 26, and the company now holds the balance 66.66% in DCCDL.
The DCCDL platform in joint venture with GIC has been designed to take the form of a business trust, a private Real Estate Investment Trust (REIT). Under the agreement with GIC, DLF can sell completed, yielding commercial projects to this joint venture or buildto-suite yielding commercial assets for this entity. It can also sell land parcels earmarked for commercial development in the near future to this joint venture.
DLF has already identified certain assets and land parcels for transfer to DCCDL and it is currently in early talks with GIC for the same, while it is aiming to complete the process in the financial year 2018-19.