DLF To Invest Rs 5,000 Crore In New Commercial Project In Chennai
India's largest realty firm DLF Ltd. on Thursday announced an investment of Rs 5,000 crore to develop large commercial project here as part of its strategy to expand portfolio of rent yielding properties.
Tamil Nadu Chief Minister Thiru Edappadi Palaniswami laid the foundation stone of 'DLF Downtown' at Taramani in Chennai. The 27 acre project will be developed by DLF's joint venture firm with GIC named DLF Cyber City Developers Ltd. The total commercial area, largely office spaces to be constructed under the new project, is 6.8 million square feet in various phases.
"Tamil Nadu has always been a destination of choice for corporates and MNCs due to its talent pool and favourable business environment. We are investing Rs 5,000 crore in phases for developing our fourth project DLF Downtown, Taramani in Chennai," DLF Chief Executive Officer Mohit Gujral said. DLF would commence construction of 2.5 million square feet area in the first phase.
The project, to be completed in the next 5-6 years, would help additional 70,000 direct and 6,000 ancillary employment opportunities once operational. "Chennai continues to strengthen its position as an IT hub with increasing investment commitment from global companies, making it out second largest market after Gurugram," DLF Managing Director (Rental Business) Sriram Khattar said.
With this project, he said, the company would now have a 14 million sq ft of development in Chennai. "The company has identified a development pipeline of 20 million sq ft and a construction of 5.5 million sq ft is underway. This will augment our existing 35 million sq ft rental portfolio of office and retail properties," Khattar said.
The company plans to take the national commercial portfolio to over 50 million sq ft, he added. DLF earns an annual rental income of over Rs 3,000 crore from its commercial properties that are located in Gurugram, Chennai, Hyderabad, Kolkata and Chandigarh. Another 20 million sq ft commercial space is under development.
Also read: DLF Sales Bookings Up 16% In April-September
Unlike residential property market, commercial real estate, especially office market, is performing well. Office space leasing touched an all time high in 2019. To monetise its commercial assets, DLF in December 2017 entered into a joint venture with Singapore sovereign fund GIC when DLF promoters sold their entire 40 percent stake in DCCDL for nearly Rs 12,000 crore.
This deal included sale of 33.34 percent stake in the DCCDL to GIC for about Rs 9,000 crore and buyback of remaining shares worth about Rs 3,000 crore by DCCDL. In DCCDL, DLF currently holds nearly 67 percent stake, while GIC has the remaining stake. DLF has so far developed 153 real estate projects comprising 331 million sq ft. It has a land bank of 192 million sq ft.