DLF plans to double its rental portfolio, eyes Rs 10,000 crore rental revenue by FY30

DLF plans to double its rental portfolio, eyes Rs 10,000 crore rental revenue by FY30

Delhi-NCR based listed real estate developer DLF Ltd plans to double its rental portfolio and generate Rs 10,000 crore in rental revenue by FY30, backed by a Rs 20,000 crore investment and expansion into new geographies.

As part of its expansion plan, the company will add around 21 million square feet (msf) of office space in the next few years, taking it to 60 msf from the current 39 msf, the company's executives said in an investor presentation.

DLF also plans to increase its retail portfolio to 12 msf over the next 5 years from the existing 4 msf. Almost 8 msf is already under execution and several of the projects are in the last stages and will get delivered next year itself.

“If I were to look at the next 5 years and all our projects come out on time, we are looking at almost Rs 10,000 crore of rental revenue by FY30 plus minus 6 months. We are looking at doubling our portfolio of rental business in the next 5 years with the projects in the pipeline,” DLF’s Chief Financial Officer, Badal Bagri said in a corporate presentation last month.

The company's revenue from rental plus services and the hospitality business was around Rs 7,000 crore in FY24.

He said that to make this portfolio viable, the company will have to invest in capital expenditure.

“We are looking at almost investing Rs 20,000 crore over the next five years. Out of Rs 20,000 crore, Rs 12,000 crore will go in the DCCDL (DLF Cyber City Developers Ltd) portfolio and Rs 8,000 crore across rental and hospitality business in the DLF portfolio,” Bagri said.

Rajiv Singh, Chairman, DLF Ltd, said that in terms of the rental business, apart from Gurugram, the company is already present in Chennai in a reasonable way and in Hyderabad in a semi-reasonable way. He added that in future the rental business may seek new geographies.

“Hyderabad has grown greatly, so maybe today we are not that reasonably present there, but we are there. Bengaluru, we are not there. Mumbai, we are not there. These are obvious markets for opportunity. But yes, I think the rental business will certainly seek geographies where our clients wish to be. So in the rental business, we may follow our clients (to explore new geographies),” Singh said.

The company said the occupancy level is almost 93 percent on a weighted average basis across retail and office portfolios.

“Our office portfolio has almost 93 percent occupancy and excluding the SEZ portfolio, it would be almost close to 97 percent. Retail is healthy at 98 percent. All the new projects are almost 95 percent pre-leased,” the company said.

In its annuity business, DLF manages a strong operational portfolio of about 44 million square feet of rental assets, with a high occupancy rate of 93 percent. This portfolio is projected to expand to 73 msf in the medium term.

The company’s annuity business includes the rental operations of DLF, DCCDL, and Atrium Place (a joint venture with US based Hines), along with DLF's hospitality business and the group's services and asset management operations.