Realty firm DLF’s rental arm will invest around ₹6,000 crore to construct 75 lakh square feet of prime office and retail spaces in Gurugram to tap demand for top-quality green commercial properties.
DLF Cyber City Developers Ltd (DCCDL) is a joint venture between DLF and Singapore’s sovereign wealth fund GIC.
DLF holds nearly 67 per cent stake in the JV firm.
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In its latest investors presentation for the third quarter of this fiscal, DLF informed that its rental arm DCCDL has commenced construction of 5.5 million (55 lakh) square feet of Grade A plus office spaces in the new phase of its ultra-premium commercial project ‘DLF Downtown, Gurugram.’
Besides, DCCDL has also commenced construction of DLF Mall of India in Gurugram, with a total area of 20 lakh square feet.
Already, 3.7 million (37 lakh) square feet area has been completed so far.
According to sources, the total investment in the construction of this office complex and a shopping mall would be around ₹6,000 crore.
The company spokesperson declined to comment.
DCCDL, which holds the bulk of the rent-yielding assets of DLF Group, has an operational rental portfolio of 40.4 million square feet, of which 36.4 million square feet area is office space and 4 million square feet of retail real estate.
On the Indian office market trend, DLF’s Vice Chairman and MD (Rental Business) Sriram Khattar said, “Global companies, especially technology firms, are attracted by high-quality human talent and world-class commercial spaces. These companies look for Grade A++ office spaces which are rated high on sustainability, green initiatives, social infrastructure and scalability”.
“DLF does it best to provide these and, at times, tailor-made solutions for their long-term space requirements,” he said.
Khattar noted that Global Capability Centers (GCCs) are driving office demand across major cities.
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On shopping mall expansion, Khattar said, “India is one of the fastest growing economies with a huge middle class and upper middle class aspiring to economically move up the chain. This coupled with the high influx into urban centres would result in robust growth in retail, especially organised retail.”
International brands continue to explore India as a growth destination, especially over the last 3 to 4 years, he said.
Khattar said the Group has developed many shopping malls and has a strong supply pipeline of retail spaces.
“We will complete about 1.3 million sq ft further this year and another 2-2.5 million square feet in about 3 years.
“We will continue to endeavour to create customer delight and be the port of first call for international and Indian brands wanting to expand where we have a presence,” Khattar said.
DCCDL’s growth
As per the presentation, the DCCDL’s rental income from office and retail spaces rose 10 per cent to ₹1,194 crore in the third quarter of this fiscal due to higher occupancy and rent appreciation.
Out of the total rental income, DCCDL’s office assets contributed ₹962 crore rent in the December quarter, up 10 per cent from ₹876 crore in the year-ago period.
According to various real estate consultants, India’s top seven major cities saw a record gross and net leasing of office spaces during the 2024 calendar year on high demand from domestic firms and multinational corporations (MNCs).
DCCDL’s rentals from retail real estate spaces also grew to ₹231 crore from ₹213 crore during the period under review.
On the financial front, the DCCDL’s revenue increased 9 per cent in the October-December period to ₹1,609 crore from ₹1,476 crore a year ago.
Its net profit jumped to ₹941 crore from ₹434 crore.
DLF is primarily engaged in the business of the development and sale of residential properties (the Development Business) and the development and leasing of commercial properties (the Annuity Business).
DLF is the country’s largest real estate firm in terms of market cap.
It has a strong presence in the Delhi-NCR and Tamil Nadu markets.
The company has developed more than 185 real estate projects and developed an area of more than 352 million square feet since inception.
The Group has 220 million square feet of development potential across residential and commercial segments.