DLF Ltd, India’s largest-listed real estate firm, is seeing a demand revival in the housing segment but a full-fledged recovery was still
some time away, a senior official said on Tuesday.
Group executive director Rajeev Talwar said debt reduction was still high on the agenda, but there were no plans for further capital raisings before the fiscal year ends in March. The developer’s founding family raised $780 million by selling shares to institutions in May.
DLF has been hit by a crash in India’s once-soaring property market. Prices fell by as much as 50 per cent during the global financial meltdown, and are estimated to have recovered about 20 per cent from their lows.
“You are now hitting an upside cycle, but you are not really at the crest itself,” he said at the Reuters India Investment Summit.
In property, he expected housing would be the first to see demand recover, followed by commercial real estate and then the retail segment.
“If the economy is firmly in the saddle and running, in early 2010/11 you will see a huge revival in commercial real estate and little later year in retail. Maybe in the third quarter of the next financial year, you will see a huge revival in retail.”
DLF has put its wind energy business on the block as part of a move to exit non-core assets, and had “renewed interest” from 3-4 parties but was yet to finalise a buyer, Talwar said, adding a sale would fetch about $200 million.
DLF has said it aimed to raise Rs 10,000 crore ($2.2 billion) over three years by selling non-core assets.
FUNDING PLANS
Heavy debt and a lack of investor interest in Indian real estate projects saw the founders of the 63-year-old company sell shares to institutions in May to raise funds.
A long-planned Singapore-listing of a property trust, DLF Assets Ltd (DAL), would also help raise capital, but Talwar said the company was yet to decide whether to go ahead with it.
In April, DLF said its board was “reviewing strategic relationship” with DAL, and analysts have said it may take over the trust.
“We are keeping all options open,” Talwar said.
DLF’s profit has fallen for five straight quarters, and September quarter profit was almost half that of a year earlier.
The company had net debt of Rs 12,135 crore in its books at the end of the September quarter.
Media reports have said DLF was examining various options to fully or partly exit its international luxury hotel chain Amanresorts, which it bought in late 2007.
Talwar said there was no such plan yet though it could be an option if the business’s financials do not improve.
Leave a Reply