DLF to finalise two sale deals of non-core assets by Sep

Real estate giant DLF today said it expects to finalise at least two big-ticket deals for sale of non-core assets this quarter and expressed confidence that the company will achieve the target of raising Rs 7,000 crore in the next two- three years through divestment.

Although DLF did not disclose the size of the two likely deals, sources said that it could be around Rs 1,500 crore.  In a conference call to analysts, DLF Executive Director (Finance) Saurav Chawla said: "We are now in advanced stage of finalising at least two deals out of four transactions. We should close two deals within this quarter and some would flow in October".

The proceeds from sale of non-core assets, being described as those land where the company does not intends to launch projects in next two- three years, would go towards reducing debt that stood at Rs 21,524 crore as on June 30, 2011.

Chawla said the company has identified more non-core assets for sale, where it is open for joint venture, foreign investment as well as total sell-out. "We have adequate pipeline for future monetisation of certain projects," he said, adding that the divestment target of Rs 6,000-7,000 crore in the next two- three years would be met.

DLF, the country's largest real estate firm, has so far realised a little over Rs 3,200 crore from sale of such assets that include hotel plots. He said the company has decided to sell two IT Parks in Noida and Pune, which are in joint ventures, to third party as JV partners failed to buy-out each other. DLF has about 70% stake in both these IT Parks.

Chawla noted that the company's strategy to focus on sale of plotted development would continue for at least next 18-24 months. "Demand remains buoyant for such products despite the current economic environment".

The company is launching more plots in last 15 months as compared to group housing to improve cash flow and profit margins. Besides, the sale of plotted development is less construction intensive and have lower inflationary risks.