Real estate major DLF, which announced its re-entry into the Mumbai property market on July 21, will launch close to nine lakh square feet (sq ft) of space in Andheri West by the end of this fiscal along with its partner Trident Group as part of the first phase of the project in the metropolis.
DLF will pump in close to Rs 400 crore as equity to develop the entire project that has a potential saleable area of 30 to 35 lakh sq ft, the company said in an investors call on July 24.
“We will be developing the first phase of free sale area totalling approximately 9 lakh sq ft of saleable area. This will be a pilot project to understand the market dynamics and apply these learnings to see how best we can apply our expansion strategy in this market,” the company said.
DLF will hold a 51 per cent stake in the special purpose vehicle (SPV) which will develop the project. Trident Group will hold the remaining 49 per cent, DLF CEO Ashok Tyagi told analysts. "We reflected for a long time before re-entering the Mumbai real estate market...We are investing Rs 400 crore as equity for the entire project that has a potential saleable area of 3-3.5 million square feet," he said.
The project is a Slum Rehabilitation Authority (SRA) project. Tyagi said this will be a pilot project for DLF in the Mumbai market, and based on the success the company will draw a long-term growth strategy.
Under the partnership DLF will manage the construction, sales and financial closure of this project, he said. "We hope to launch the project in Mumbai by the end of this fiscal or latest by July," Tyagi said.
Moneycontrol had reported on July 22 that the company may launch close to nine lakh sq ft of space in Andheri West. A detailed questionnaire was sent to the company.
The partnership
According to a regulatory filing, DLF Home Developers Ltd's (DHDL) wholly-owned arm, Pegeen Builders & Developers, will allot 9,800 equity shares of Rs 10 each at par to Delhi-based realty firm Trident Buildtech. DHDL has executed a securities subscription and shareholders' agreement in this regard. Following the allotment, the stake of DHDL, a subsidiary of DLF, in Pegeen will come down to 51 per cent.
Trident, through its wholly-owned subsidiary Sahyog Homes Ltd (SHL), is currently developing the SRA project in Andheri (West). Pegeen has agreed to enter into a development agreement with SHL to develop the project's first phase.
Q1 results
DLF, on July 21, reported a 12 percent year-on-year increase in consolidated net profit to Rs 527 crore in the first quarter of this fiscal. Total income rose marginally to Rs 1,521.71 crore in April-June of 2023-24 from Rs 1,516.28 crore in the year-ago period, according to a regulatory filing. The company's sales bookings remained flat at Rs 2,040 crore in the June 2023 quarter.
In 2012, DLF sold 17 acres of prime land in Mumbai to Lodha Group (Macrotech Developers) for about Rs 2,700 crore.
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