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New Delhi: Realty Head DLF Said on Saturday that there are no plans to launch immediately REIT For its commercial portfolio as the market conditions are currently not conducive for bringing public issue. The bulk of DLF’s rental properties are DLF Cyber City Developers Ltd (DCCDL), which is preparing itself to launch REIT since last two years.
DCCDL is a joint venture between DLF Limited and Singapore-based sovereign wealth firm GIC. While DLF holds 66.67 per cent stake in the joint venture, GIC holds 33.33 per cent.
“There is no change in planning or direction and I think both GIC and we are committed to the whole thing, but given the ongoing high interest rate scenario and the overall uncertainty, this is clearly the best time. No. New REIT,” DLF CEO Ashok Tyagi Told investors.
Hopefully market conditions will improve and both the shareholders will take a decision, Tyagi said, adding, “We will bring it to market but it is not in the immediate short term.”
In January last year, DCCDL appointed Shardul Amarchand Mangaldas & Co as legal advisor, Morgan Stanley as banker and KPMG as financial/tax advisor to create the right corporate and capital structure for the proposed launch of the REIT.
DLF says the timing of the launch of the REIT will be decided by the two shareholders (DLF and GIC).
DCCDL has rental commercial properties (office and retail) of about 40 million square feet.
In December 2017, DLF had formed a joint venture with GIC after its promoters sold their entire 40 per cent stake in DCCDL for around Rs 12,000 crore.
The deal includes sale of 33.34 per cent stake in DCCDL to GIC for about Rs 9,000 crore and buyback of the remaining shares by DCCDL for about Rs 3,000 crore.
In India, there are three listed REITs – Embassy Office Park REIT, Mindspace Business Park REIT and Brookfield India Real Estate Trust.
The first REIT worth Rs 4,750 crore was listed by Embassy Group and Blackstone-backed Embassy Office Park in April 2019.
In August 2020, K Raheja and Blackstone-backed Mindspace Business Park launched the country’s second REIT to raise Rs 4,500 crore.
Global investment firm Brookfield has listed the country’s third REIT after raising Rs 3,800 crore through IPO.
real estate investment trust REITs, a popular instrument globally, were introduced in India a few years back to attract investment in the real estate sector by monetizing rental property.
This helps to unlock the massive value of real estate properties and enable retail participation.
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