DLF rental arm DCCDL’s office rental income rises 7% in FY24

May 19, 2024

DLF’s joint venture firm DCCDL‘s rental income from office buildings increased 7 per cent annually to ₹3,460 crore in the last fiscal, driven by rent appreciation and expansion of the asset portfolio.

DLF Cyber City Developers Ltd (DCCDL) is a joint venture between DLF Ltd and Singapore’s sovereign wealth fund GIC.

DLF holds nearly 67 per cent stake in the JV firm.

DCCDL has an operational rental portfolio of 41.9 million square feet, of which 37.9 million square feet area is office space and 4 million square feet retail real estate.

Rental income growth

According to an investor presentation of DLF, the DCCDL’s rental income from office buildings increased to ₹3,460 crore in 2023-24 from ₹3,232 crore in the preceding year.

The rental income from retail assets (malls and shopping centres) rose 18 per cent to ₹865 crore last fiscal from ₹735 crore in 2022-23.

Service and other operating income grew 14 per cent last fiscal to ₹1,489 crore from ₹1,311 crore in the preceding year.

“DLF’s rental business continues to do well. The occupancy levels are healthy, and vacancy is low. With the regulatory clarity of floorwise denotification in SEZs, vacancies in SEZs will also go down.

“We also achieved growth in rentals from our existing commercial assets. We have performed better than the industry in most parameters,” DLF’s Vice Chairman and MD (Rental Business) Sriram Khattar told PTI.

Khattar also informed that the development of new assets, office and retail properties, is moving at a good pace.

“The rental business continues to create new benchmarks in sustainability and offers global quality workspace solutions and malls at a fraction of the cost compared to the developed countries,” Khattar added.

On the financial performance front, DCCDL consolidated revenue increased 9 per cent to ₹5,903 crore from ₹5,419 crore in the preceding fiscal.

Its net profit grew 18 per cent to ₹1,690 crore in 2023-24 from ₹1,429 crore a year ago.

DCCDL’s consolidated net debt stood at ₹17,903 crore at the end of the last fiscal.

The occupancy levels across DCCDL’s non-SEZ office space portfolio remain at 97 per cent, while the occupancy level in SEZ assets stood at 86 per cent.

Out of the total operational office portfolio of 37.9 million square feet, the non-SEZ is 21.5 million square feet and 16.4 million square feet is in SEZ properties.

“We expect a steady recovery across the SEZ segment over the next few quarters given the announcement on floor-wise denotification,” DLF said.

Outlining the priorities for the rental business, DLF said in the presentation that “new office products continue to witness healthy demand momentum; focus on enhancing ecosystems”.

“New retail pipeline builds out on track; (and have) positive outlook towards retail segment and its growth,” it added.

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