DLF India Plans to Launch REIT
With the objective of monetising commercial assets in the next fiscal year, DLF, one of India’s largest realty companies has announced its plans of launching Real Estate Investment Trusts (REIT) s. It is also reportedly looking for global players to enter into partnership.
By the coming year, DLF India plans to launch another sizeable REIT platform focusing on retail and office and recycle its capital for the further growth and spin off the Rent Co attributable debt. DLF India earns an annual rental income of Rs.2100 crore annually from its present office and retail properties in which it has a strong portfolio.
The aim of creating REIT units and fees from the management of trust is aimed at creating a long-term free cash flow in the form of dividend flows. No comments or speculations however, have been made over the SEBI order that barred DLF from accessing the capital markets for 3 years. The REITs will be launched at a subsidiary level.
DF Executive Director of Finance, Saurabh Chawla told analysts is reported to have informed analysts of their plans of introducing global players for strategic and financial partnership for the REITs in the coming future.
It is expected that the launch for the REITs is likely to take place in the early part of 205-16 fiscal year and is expected to be a ‘game changer’ because the company shall be unlocking the value of commercial assets and also aid in spin-off debt thereby creating long term free cash flows in the form of dividends.
Objective of the launch: DLF is reported to have stated its objectives for launching the REIT as maximising the assets’ present value and capture the immense potential of growth that a growing Indian economy has to offer. In order to harness the growth that the market has to offer at present, the company is exploring its global partnership options both strategic and financial.
In late 2009, DLF had announced a merger of its subsidiary DLF Cyber City Developers with promoters firm Caraf Builders & Constructions. In this tie-up, 60 per cent was at stake with DLF Cyber City while the remaining 40 per cent economic interest would be held by shareholders of Caraf.
Source: Financial Express
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