DLF reachs

The office rental income of DLF reachs to Rs 2,500 cr by FY15

NEW DELHI: Real estate major DLF today said it expects 20 per cent annual growth in office rental income that would touch Rs 2,500 crore by 2014-15 fiscal with likely appreciation in rent value and new leasing.

DLF earned an office rental income of about Rs 1,500 crore in 2011-12 fiscal. It currently has Grade 'A' office leasing portfolio of 27 million sq ft, of which 15 million sq ft is in Gurgaon and rest is in the National Capital, Chennai, Hyderabad, Kolkata, Pune and Chandigarh.

"Our office leasing business is growing by 20 per cent year-on-year. We expect that our rental income will reach Rs 2,500 crore by the end of 2014-15 fiscal," DLF National Director (Office Business) Amit Grover told PTI.

The growth would come from expected rise in rental value and increase in size of office leasing portfolio to 33 million sq ft over the next three years from the current 27 million sq ft, he added.

The country's largest realty firm has a debt of Rs 21,200 crore and the company has recently said that it targeting to reduce it to Rs 18,000 crore by the end of this fiscal from sale of two big non-core businesses -- luxury hospitality chain Amanresorts and wind energy.

Going forward, the company has plans to cut debt to below Rs 15,000 crore level so that the finance cost gets covered by its rental income.

Elaborating more on the office leasing business, Grover noted that rents of DLF office space has increased despite slowdown in commercial real estate business. He cited example of Gurgaon where the rentals of its office spaces have risen by 15 per cent in the last one year.

"We provide Grade 'A' office space with value-added services like safety and infrastructure. Therefore, we have an advantage," he explained.

DLF has been adding about 2 million sq ft of office stock every year. It expects that demand for its office space would largely come from MNCs and big domestic companies.

"There is growth coming from large sets of existing corporate clients, which are roughly 750 in number and include Accenture, IBM, Google, Cognizant, TCS, Barclays, Citi and GE," Grover said, adding that the company is adding to this client list with the growth in outsourcing business.

DLF has developed 128 acre integrated business district like DLF Cybercity in Gurgaon. The company is putting lot of focus on developing infrastructure in Gurgaon, which is a key market for the company.

"We are developing 16-lane toll free road, multi-level car parking, fire station and captive power plant in Gurgaon," Grover said. From The Economics Times