New Delhi: Realty major DLF's total rental income will rise by 12 percent to about Rs 2,900 crore this fiscal on better realisation from existing commercial assets and addition of new properties in Chennai and Delhi.
DLF, the country's largest real estate firm, earned a rental income of around Rs 2,600 crore last fiscal.
The company informed analysts that total rental income will rise to Rs 2,900 crore in the 2017-18 fiscal.
When contacted, DLF's Managing Director (Rental Buisness) Sriram Khattar said that the rentals will rise as the company has renewed its existing stock at a higher value after the expiry of 9-year leasing agreement with the occupiers.
Moreover, he said, about one million sq ft area will get added this fiscal in Chennai and the national capital.
"Given the quality of our office buildings and shopping malls as well as our focus on safety, compliance and sustainability, an overwhelming majority of our tenants renew their leases on term expiries at market rates," Khattar said.
"In addition, about 8 lakh sq ft in Chennai and about 1.9 lakh sq ft in Chanakya Puri, Delhi will be the new assets that will add to the rental income," he said.
In an analyst conference, DLF's group CFO Ashok Tyagi had said that the company's total income is expected at Rs 2,900 crore this fiscal.
According to investors presentation, DLF's gross leasing stood at 4.03 million sq ft during the last fiscal. "Net leasing of 0.88 million sq ft post lease terminations/expiry of 3.15 msf during FY17."
Unlike housing segment which is facing a huge slowdown in demand, the commercial real estate is doing well.
In October 2015, DLF had announced that its promoters would sell their entire 40 per cent stake in DLF Cyber City Developers Ltd (DCCDL), which holds the bulk of the commercial assets of the group.
The promoters -- billionaire K P Singh and family -- had in March this year entered into an exclusivity pact with GIC for the deal, estimated at about Rs 13,000 crore.
The promoters would invest a significant amount from this proposed transaction into DLF Ltd, which will use it for reduction of debt that has crossed Rs 25,000 crore.
DLF expects an agreement with the GIC in the next few weeks and deal to be concluded by October this year after receiving regulatory and all other approvals.
The company has about 30 million sq ft of commercial area and out of that, DCCDL holds about 22 million sq ft of commercial space.