DLF-GIC to invest Rs 12.5 bn for housing project in central Delhi

DLF had entered into a joint venture with GIC for two projects, which will be called 'Midtown', having total development potential of about 7 million sq ft

Realty major DLF and Singapore's sovereign wealth fund GIC will invest about Rs 12.5 bn over the next four years to construct a housing project in the national capital.

In September 2015, the GIC had invested Rs 20 bn to buy 50 per cent stake in DLF's two upcoming housing projects at Moti Nagar in central Delhi.

DLF had entered into a joint venture with GIC for these two projects, which will be called 'Midtown', having total development potential of about 7 million sq ft.

The JV has started construction of the first phase of this project that involves 2.5 million sq ft of built-up area.

The investment on construction is estimated to be Rs 12.50 bn for the first phase, sources said.

A DLF spokesperson declined to comment on the matter.

As per the new business model adopted by the company, DLF will open sale of flats in this project after it gets occupancy certificate from the government authorities.

The company expects to sell apartments in this project for over Rs 20,000 per sq ft.

This project is part of the DLF's overall development of 38 acre land parcel at Moti Nagar, Delhi that it bought in 2007 from DCM Shriram and Lohia Group for Rs 16.75 bn.

The company, on its own, has developed and sold about 2,850 flats in three phases of 'Capital Greens' project. About 1,500 units for economically weaker section and a commercial building has also been developed on this site.

DLF had first launched this project in 2010 at a price of Rs 4,500 per sq ft and the current price in the secondary market for completed units is about Rs 17,000 per sq ft.

For further development on this prime land parcel, DLF had formed JVs with GIC.

In the national capital, there are only few housing projects from private developers.

DLF currently has completed inventories of Rs 135 bn, largely in Gurugram, which it expects to sell over the next 5-6 years.

Meanwhile, it will continue to build projects to create stock of completed units. After this JV for housing projects, DLF has formed a separate JV with GIC in the commercial segment.

In December last year, DLF promoters sold 33.34 per cent stake in rental arm DLF Cyber City Developers Ltd (DCCDL) for Rs 90 bn. DLF's stake in the JV firm DCCDL is 66.66 per cent.