Realty major DLF will invest around Rs 750 crore for construction of a new commercial project in Gurugram as it seeks to encash rising demand of office and retail space from end users as well as institutional investors, according to sources.
The company has decided to build a new commercial project with 2.5 million sq ft area in Gurugram. It will sell office and retail space in this commercial project, and not adopt lease model, sources said.
DLF has completed and sold a 2.5 million sq ft commercial project ‘DLF Corporate Greens‘ located at Southern Peripheral Road in Sector 74A, Gurugram.
Adjacent to the Corporate Greens project, the company has more land parcels where it will build the new commercial property. The construction work would start in few months with an estimated cost of around Rs 750 crore, sources said.
The company spokesperson declined to comment on the matter.
DLF, the country’s largest realty firm in terms of market capitalisation, mostly develops commercial project on lease model to earn rental income. However, some of its projects are on sale model as well.
It has more than 30 million sq ft of leased commercial properties with a rental income of over Rs 3,000 crore.
The bulk of its rent-yielding commercial assets are in the joint venture firm DLF Cyber City Developers Ltd (DCCDL). While DLF owns 66.66 per cent stake in DCCDL, Singapore’s sovereign wealth fund GIC holds the remaining 33.34 per cent.
To monetise commercial real estate, DLF promoters had in late 2017 sold their entire 40 per cent stake in DCCDL for Rs 11,900 crore.
This deal included sale of 33.34 per cent stake in DCCDL to GIC for Rs 8,900 crore and buy-back of remaining shares worth Rs 3,000 crore by DCCDL.
Post this big ticket deal, DLF is looking to develop more commercial projects directly as well as through JV firm with GIC as it is left with limited stock.
DCCDL is developing a 12-acre green commercial project ‘Cyber Park’, with a leasable area of 2.5 million sq ft, in Gurugram at a cost of about Rs 1,500 crore and more such projects are in the pipeline in and around Cyber City and Cyber Hub.
DLF had recently announced development of an office complex on a land parcel that it bagged through an auction from Haryana government. It has tied up with the US-based realty firm Hines for this project.