26 , February , 2023
In a recent announcement, the CEO of DLF, Ashok Tyagi has
announced that the company has no plans to launch public offer of REIT in the
next one year to monetise its rent-yielding commercial properties. DLF holds
bulk of its rental assets (offices and shopping malls) through joint venture
firm DLF Cyber City Developers Ltd (DCCDL). DLF holds 66.67 per cent stake in
DCCDL, while Singapore sovereign wealth fund GIC has 33.33 per cent
shareholding.
"We are not in a hurry. There is no plan to launch REIT
in the next one year," Tyagi told PTI when asked about the company's
strategy regarding proposed launch of REIT. The decision comes amid global
uncertainties and high interest rates regime.
In the last two years, DCCDL has completed all homework to
be ready to list its Real Estate Investment Trust (REIT) on stock exchanges by
launching an Initial Public Offering (IPO). DLF's top management has been
maintaining that the timing for REIT will be decided by the two joint venture
partners.
In January 2021, DCCDL had appointed Shardul Amarchand
Mangaldas & Co as legal advisor, Morgan Stanley as banker and KPMG as
financial/tax advisor to create right corporate and capital structures for the
proposed launch of REIT.
DLF's arm DCCDL has become REIT-ready now and will wait for
the conducive market conditions to launch the public offer.
"There is no change in the plan or the direction and I
think both GIC and we are reasonably committed to the entire thing, but given
the high interest rate scenario currently going on and the overall uncertainty,
this obviously is not the best time for a new REIT," Tyagi had told in an
investors call in December 2022.
DCCDL has rent-yielding office and retail properties of
around 40 million square feet with an annual rental income of around Rs 4,000
crore. In December 2017, DLF had formed a joint venture with GIC after its
promoters sold their entire 40 per cent stake in DCCDL for nearly Rs 12,000
crore. This deal included sale of 33.34 per cent stake in DCCDL to GIC for
about Rs 9,000 crore and buyback of remaining shares worth about Rs 3,000 crore
by DCCDL.
(WITH INPUTS TAKEN FROM PTI)
