India Investment Property » Group Company

DLF looks for distress sale

Sat, 08 Nov 2008 05:32:14 +0000

DLF Vice-chairman Rajiv Singh says the company would try and fill the gap in its portfolio by acquiring suitable assets which come up for distress sale in a depressed real estate market.

“We will be prepared to look at opportunities, but won’t pick up something just because it’s cheap. However, there are some gaps in our portfolio, which we would like to fill. If there are some significant assets, which are hard to replace in a market like NCR or Mumbai, we will certainly look at it,” said Mr Singh.

He said a challenging external environment had forced his company not to move “at a pace we would have liked to” and asked the government to bring down interest rate for home buyer as well as developers.

“We pay 3% more interest on loan compared to any firm similar to us in another industry,” Mr Singh said. DLF recently borrowed at 16% interest rate. The company reported a 4% decline in net profit at Rs 1,935 crore for the September quarter, compared to the corresponding quarter last year. In comparison to the first quarter of the current fiscal, DLF’s revenue remained flat at Rs 3,840 crore, even as customer advances fell 8.6% to Rs 1,585 crore.

As global economic turmoil unfolds, several MNCs have been taking a relook at their space requirements. Mr Singh says no client so far has backed out, but most of them have been “reluctant to commit space in the past 2 months.” Office space contributes major chunk of DLF’s revenue.

Sales to promoter group company DLF Assets (DAL) contributed 37% to DLF’s sales and 47% to the company’s profits in September quarter. The receivables from DAL though have been piling up, raising analysts’s apprehension on its ability to pay back. DAL currently owes Rs 4,800 crore to DLF. Mr Singh agrees raising equity would be difficult in current situation, but says DAL will be able to raise enough debt on the strength of its rentals and pay back entire amount due to DLF by the end of this fiscal. Properties held by DAL are expected to generate a rental of over Rs 600 crore by March ‘09.

On company’s retail foray, Mr Singh said, “Our intention is to bring high-quality retailer to our malls and that’s why we keep engaging with them. But we have no intention to compete with our other tenants.”

Lots Of Projects In Chembur

Tue, 19 Aug 2008 11:00:43 +0000

The huge project is being developed and executed in Chembur, Mumbai by GA Builders, an “RNA Corp Group” company that would provide “New Homes” to more than 1950 tenants, according to a media release. The Subhash Nagar Colony, built by MHADA, is about 55 years old and comprises 57 buildings that house 36 members each. On completion of the mass housing project, the tenants would be re-housed in flats with an area of 320 square feet plus 65 square feet in the form of a flowerbed, niche or dry area with all necessary amenities. After obtaining all the requisite approvals for the redevelopment of the project and after setting up the transits for tenements, the company is all set to make its mark in Mumbai real estate sector.
“We have so far built 744 flats for the residents in five buildings, and have finalized plans to build eight more buildings for 546 families who have signed for redevelopment.” Mr. Manoj John, spokesman for RNA Corp said. He added that more than 1300 families out 1950 have accepted their plan to turn Subhash Nagar into mini-township. Mr. John further said “Considering the sheer scale of this project, we have undertaken extensive infrastructure enhancement drive that includes setting up of drainage and sewerage infrastructure, underground water lines, recreation grounds, playgrounds, internal roads. Underground and overhead tanks will ensure uninterrupted water supply with an added provision for piped gas connection.”
Besides the amenities, RNA also provides for a “Zero Maintenance Cost” for the society by ways of issuing fixed corpus to each member of the society. A Fixed deposit of the aggregate of the corpus funds generates monthly interests to take care of the maintenance and also meets other costs to be borne by the society, the release added. Additionally, RNA will also help the tenants during the transit period by providing them with the cost towards brokerage for rental accommodation, the rentals and shifting charges. With over two decades in the construction industry, RNA Corp’s expertise and knowledge of local partners coupled with its strong focus on customer satisfaction, has resulted in gaining an impeccable reputation and setting up a successful track record of performance.

Goldman Sachs Picked Pinority Stake In Sterling & Wilson

admin — Tue, 17 Jun 2008 06:27:35 +0000

Goldman Sachs, the global financial powerhouse, has picked up a minority stake in Sterling & Wilson, a Shapoorji Pallonji group company, for $50 million. No further financial details were available.

Sterling & Wilson is one of the leading mechanical, electrical and plumbing (MEP) contracting companies in the country. It is one of those few companies in India that offer this kind of services, people acquainted with the industry said.

The fund infusion by Goldman Sachs would supplement the existing support from the Shapoorji Pallonji group and enable the company to increase its growth plans both domestically and internationally, a top company official said. Avendus Capital was the financial advisor for the transaction.

While realty industry as a whole is estimated to grow at an annual rate of about 20% for the next few years, there’s a growing trend towards consolidation and organized structure.