DLF to build 2 mn sq ft office building in Gurugram; mulls developing new malls

Talking about its under-construction commercial project DLF Downtown in Gurugram comprising around 1.5 million square feet, Khattar said the company has fully pre-leased the first tower and expects to complete leasing of the second tower shortly.

Realty firm DLF on Friday announced plans to develop 2 million square feet office building in Gurugram to encash revival in demand for premium workspace from corporates and coworking operators. The company is also considering to develop two large malls as well as small shopping centres on a lease model. In a conference call with analysts, DLF's Managing Director (Rental business) Sriram Khattar said: ''There is early but clear sign of recovery of office demand.'' The vacancy level in its office portfolio has reduced by 20-30 basis points at nearly 14 per cent and is expected to fall to a single digit by June next year. DLF's rental assets are primarily under the DLF Cyber City Developers Ltd (DCCDL), a joint venture between DLF and Singapore's sovereign wealth fund GIC. DLF has nearly 67 per cent stake in the DCCDL, while GIC has the rest. The annuity portfolio is around 35 million square feet. Talking about its under-construction commercial project DLF Downtown in Gurugram comprising around 1.5 million square feet, Khattar said the company has fully pre-leased the first tower and expects to complete leasing of the second tower shortly. ''We are quite enthused by the leasing activities in DLF Downtown project. Therefore, we have decided to construct fresh tower of 2 million square feet,'' he said. The construction is expected to start in the January-March quarter next year. The total development potential at its 'Downtown' mixed use project is 11 million square feet. Khattar said the construction of its 'Downtown' project in Chennai is also progressing well. The balance capital expenditure on the under construction projects in Chennai and Gurugram is estimated at around Rs 1,500 crore over the next 15 months. Khattar said the leasing velocity has definitely improved but it will be difficult to predict the timeline to reach pre-Covid level. On retail real estate business, Khattar said the footfall and sales have recovered significantly except cinema and food & beverages segments. Asked about rental income, he said the rental run rate is expected to rise to Rs 4,700 crore by 2022-23 fiscal from Rs 4,200 crore in the current fiscal. DLF has so far developed 153 real estate projects and developed an area of approximately 330 million square feet. The company currently has 215 million square feet of development potential across residential and commercial segment. DLF is primarily engaged in the business of development and sale of residential properties (the 'Development Business') and the development and leasing of commercial and retail properties (the 'Annuity Business).

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)