DLF-GIC JV eyes Rs 350 cr annual rent income from new commercial project at Gurugram

DLF Cyber City Developers Ltd, a joint venture between DLF and GIC, expects about Rs 350 crore annual rental income from its upcoming commercial project at Gurugram which will get completed by March next year, sources said.

Out of the 2.5 million sq ft leasable area in the new project 'Cyber Park', DLF Cyber City Developers Ltd (DCCDL) has already leased 1.8 million sq ft to big clients such as Bank of America, Gartner and co-working player WeWork, the sources said.

The remaining area would be leased in the next few months, they added.

This 12-acre green commercial project is being developed at a cost of about Rs 1,500 crore, they said, adding the annual rental income would be around Rs 350 crore with three towers in this complex currently commanding around Rs 120 per sq ft rent a month.

In 2016, DLF had given a contract to L&T to construct this project, being developed as per LEED platinum green certification norms.

A DLF spokesperson declined to comment on the matter.

DLF, the country's largest realty firm, has 66.66 per cent stake in DCCDL, while Singapore's sovereign wealth fund GIC owns the rest 33.34 per cent.

The DLF-GIC JV was formed last year when the promoters of the realty firm sold their stake in DCCDL to the Singapore investment firm.

Promoters sold 40 per cent stake in DCCDL for Rs 12,000 crore. This deal included sale of 33.34 per cent stake to GIC for Rs 9,000 crore and the remaining shares were bought back by DCCDL.

DCCDL currently earns a rental income of about Rs 2,700 crore from 27 million sq ft of leased commercial properties and the same would rise after the completion of this building.

DCCDL posted a profit of around Rs 1,400 crore on a total income of nearly Rs 4,950 crore during the last fiscal year. Its debt is around Rs 16,000 crore, of which Rs 14,500 crore is LRD (lease rental discount) loans against its leased commercial assets. The average coupon rate is 9 per cent.

That apart, the JV has receivables worth Rs 8,700 crore from DLF, which recently proposed to sell commercial assets worth Rs 6,000 crore to settle part of its dues.

Besides the Cyber Park project located on the national highway in Gurugram, DCCDL has about 25 million sq ft of area as land bank for future development. With this growth potential, DCCDL's portfolio could grow in mid-teens CAGR for next 10 years, DLF had said in an analyst presentation for the September quarter.