Delhi NCR-based listed real estate developer DLF is planning to grow its retail portfolio by constructing three malls spread across Delhi, Gurugram, and Goa, DLF’s Vice Chairman and MD (Rental Business) Sriram Khattar told Moneycontrol in an interview.
Khattar said that during the COVID-19 period, the company had stopped thinking about mall expansion plans, but in the last two-three years, the company’s focus has again shifted back to the expansion of its retail portfolio through shopping malls.
“We are constructing three new malls now. One mall each will come up at Moti Nagar in central-west Delhi, at DLF Phase-5 in Gurugram and Panjim in Goa,” Khattar told Moneycontrol.
At present DLF has around 5 million square feet of retail portfolio and after these malls are operational, the retail portfolio will increase to around 6.3 million square feet.
Khattar said that the Delhi and Gurugram malls will be high-street malls, while the one in Goa will be a full-fledged mall.
"The high-street plazas in Delhi and Gurugram will begin generating rental income between March 2025 and March 2026 and the development in Goa will begin by March-April 2026,” he said.
Khattar said that other than those three malls, DLF has also commenced construction of its flagship mall, named Mall of India in Gurugram, which will cater to the growing middle and upper-middle-class population in the city.
The mall is expected to open in 2028, he said.
DLF Limited on July 25 had reported a 23 percent YoY jump in its net profit at Rs 646 crore for the quarter ended June 30, 2024. Rental business also continued its steady performance during the period.
Q1FY25 consolidated revenue of DLF Cyber City Developers Limited (DCCDL) stood at Rs 1,553 crore, reflecting YoY growth of 10 percent. The consolidated profit for the quarter stood at Rs 470 crore, registering a YoY growth of 20 percent, DLF had said.
Data Centre Push
DLF started its first data centre around four years ago on one of its plot in Noida Sector 143 along the Noida-Greater Noida Expressway and the construction of a second facility is nearing completion, with DLF awaiting the OC. Additionally, the company has signed on for a third data centre, with an option to develop a fourth at the same site.
“We built and rent it out," he said.
The tenant there is a Singapore-based company, which will also have the option to ask the developer to lease them a fourth one on requirement basis.
These are small data centres or edge data centres that have a capacity of around 25 mega-watts (MW).
The construction of the third data center in Noida is likely to begin after a few months. The data centre project is located at around 45-50 minute drive from the upcoming Noida International Airport and is 700 metres from the nearest metro station.
Focus on Grade A++ space
Khattar also said that DLF is focused on expanding its presence in the Grade A++ office space segment.
"The real estate industry should now consider differentiating between Grade A and Grade A++ commercial spaces. Grade A++ properties are benchmarked against the world's best in terms of physical and social infrastructure, safety, sustainability, and scalability. At DLF, we aim to be in this category," Khattar told Moneycontrol.
Grade A++ are estimated to be 200-250 million square feet out of total commercial buildings of about 750 million square feet.
DLF's total office portfolio stands at approximately 45 million square feet, all classified as Grade A++, while its SEZ holdings account for around 14-15 million square feet. The company's retail portfolio spans an additional 5 million square feet.
Grade A++ office spaces have five key features -- they are at good locations and come from credible developers, they are sustainable and have safety built into them, and, also boast social infrastructure, Khattar said.
For example, in Gurugram, you cannot compare a Cyber City (office space) with something on the Sohna Road. Similarly, if you have something in BKC (Bandra Kurla Complex), in Mumbai, that's very different to having a building in Vashi, the Vice Chairman and MD (Rental Business) explained.
GCCs leasing more space
Khattar highlighted that leasing activity in India has improved a lot and Global Capability Centres (GCCs) and MNCs, flex space providers and at last the traditional segment of IT/ITeS are driving office demand.
He said that GCCs are taking more and more spaces and flexi space providers or manage space providers are aggregating the needs of the smaller tenants and also taking larger spaces.
He said that most of the international companies not only look out for Grade A++ spaces but also look at developers who have the ability to scale the space.
“They definitely look at properties which are scalable so that for their expansion requirements for the next five to seven years, they don’t have to go to other locations or buildings to look for that expansion,” he said.
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