DLF To Invest 40% Of Annual Capex To Complete Commercial Chennai Projects
As per Sriram Khattar, managing director, DLF Rental Business, DLF intends to invest approximately 40% of its annual capex to complete its current commercial projects in Chennai, the company's second-largest market outside of Delhi-NCR.
The company spends Rs 12,00-15,00 crore per year on commercial property development in its existing markets.
"The firm plans to invest Rs 1100 crore in the first phase of development in Chennai; approximately Rs 700 crore has already been incurred," Khattar said. DLF is currently building its second-largest project in Chennai, with an estimated investment of Rs 5,000 crore.
DLF Downtown, a 6.8 million-square-foot office complex, is scheduled to open in 2026 or 2027.
"Phase 1 of DLF Downtown at Taramani is now nearing completion and will generate incremental revenue," he added.
DCCDL, the rental arm of India's largest real estate company DLF, announced today that it has completed 15 years of business operations in Chennai.
In the next four years, the company expects Chennai commercial properties to contribute roughly 25% of its rental income. The DLF portfolio and DLF Cyber City Developers (DCCDL) generate rental income from DLF's retail and commercial assets. DCCDL already operates a 7.4 million-square-foot IT SEZ in Manapakkam, Chennai, generating approximately Rs 600 crore in rental revenue.
DLF's rental arm, DCCDL, has begun the process of converting its rent-paying commercial assets into a Real Estate Investment Trust (REIT). "We are taking steps internally to be REIT ready," he said.
DCCDL has rent-yielding commercial assets, including offices and retail properties, of about 40 million square feet, and expects the entire portfolio to reach around 55 million square feet within four years.
"In DCCDL, we expect rental income of approximately Rs 4000 crore for the current fiscal year and are on track to achieve our guidance," said Khattar.
DLF Rental's portfolio of over 40 million square feet is US Green Building Council LEED Platinum and LEED Zero Water Certified, the highest in the world in terms of portfolio size. GRESB has awarded both DLF and DCCDL 5 Star ratings.
According to Colliers, by the end of 2022, office leasing in India will have surpassed 50 million square feet, with flex players accounting for 14% of the total, the highest of any year.
As the market approaches 2023, a looming global recession and ongoing layoffs by tech companies are likely to increase their space take up in flex spaces, which offer flexible lease terms and aid in cost control.