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DLF has nearly 70 years of track record of sustained growth

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DLF has nearly 70 years of track record of sustained growth, customer satisfaction, and innovation. The company has 284 msf of planned projects with 41 msf of projects under construction.

DLF’s primary business is development of residential, commercial and retail properties. The company has a unique business model with earnings arising from development and rentals. Its exposure across businesses, segments and geographies, mitigates any down-cycles in the market. From developing 22 major colonies in Delhi, DLF is now present across 15 states-24 cities in India.

 In an interaction with C&A, Mr. Rajeev Talwar, CEO, DLF Ltd. Shares his overview on Real estate sector of India

“We expect a much better and rewarding 2016 for the real estate sector”

To begin with, please share your thoughts on current real estate scenario?

According to me, the real estate scenario is going to improve this year. During the course of last year, the government took a slew of measures including relaxing norms for foreign investment in the construction sector and introduction of REITs that allows the real estate players to monetize their projects. Hence we already see demand for commercial real estate ticking up which is a good sign and hopefully we will see improvement in the condition of residential real estate sector. According to a report by consulting firm Bain & Company, demand for organized real estate in India will reach around 1.35 billion sqft by 2020, up from around 880 million sqft currently, and 85% of this will be for residential real estate.

  1. In your assessment when will things start to pick in full pace?

According to my recent observation, there is a definite optimism towards the long term prospects for India, that might not be in a full pace and might be slow but would be visible very soon.

  1. Tell us about some of your project taking place in different parts of India?

DLF has invested in several projects at the moment but the eye catching one is the new mall in Noida that would be ready for operations by February 2016, and will be the Country’s largest mall. We are expecting Rs 200-250 crore rental income per year from this mall, which has a leasable area of about 2 million sq ft.

  1. How has the revenue mix been so far in recent times?

All Figures of FY2014 – 2015

DevCo:-
2.25 msf gross sales of Rs 3,850 crore booked in FY15
DLF 5 Gurgaon – 1.23 msf (Rs 3,240 crore )
New Gurgaon – 0.08 msf( Rs 60 crore)
Delhi / Rest of India – 0.94 msf( Rs 550 crore )
Project under Construction : 46 msf
Approx. 13.46 msf handed over during FY15 (Gurgaon, Chennai, Delhi, Bangalore, Chandigarh, )

RentCo:
1.46 msfNet leasing in Offices during FY15 with Annuity Income of ~ Rs 2,200 crore for FY15

  1. What is in store for near future – Expectation from 2016?

In 2015, the government took a slew of measures including relaxing norms for foreign investment in the construction sector and introduction of REITs that allows the real estate players to monetize their projects. Also, RBI sharply brought down interest rates to spur growth in the economy; with banks passing on the interest rate cuts in the form of reduction in home loan rates, we are already seeing buyers coming back to the sector for purchase of housing and commercial properties.

As the impact of these long term measures unfold and more buyers make a comeback to the property market, we expect a much better and rewarding 2016 for the real estate sector. Given the prevailing low level of inflation, we also expect RBI to usher in at least one more round of rate cut. That will give a further boost to confidence of retail buyers and encourage them to buy their own house. We also believe that setting up of a real estate regulator will only add to this momentum as we will have standardized set of norms and guidelines that will give comfort to both developers and buyers.

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