DLF Ltd and GIC, the Singapore wealth fund, are considering an initial public offer for their joint venture DLF Cyber City Developers Ltd (DCCDL) instead of opting for a real estate investment trust (REIT), which has stricter regulations, sources revealed.
DCCDL, where DLF has a majority stake of 66.67 percent, is the rental business of the company with a portfolio of over 40 million square feet of operational commercial space and 19 million square feet under development, with 7 million square feet set to be completed this year.
While a REIT was previously discussed as a potential route for monetizing the venture, recent discussions indicate a preference for an IPO due to the perceived restrictions and compliance requirements associated with REIT regulations in India. These regulations mandate that at least 80 percent of a REIT’s assets by value should be completed and generating rental income, with a requirement to distribute at least 90 percent of net distributable cash flows to unitholders.
The partners, DLF and GIC, are currently in talks to finalize the best strategy for monetizing the joint venture, with an IPO emerging as a preferred option. GIC did not respond to requests for comment, and DLF did not provide a response to email inquiries.
DCCDL’s office assets are primarily located in the National Capital Region, specifically in Gurgaon, as well as in cities like Chennai, Chandigarh, and Hyderabad. The company has additional offices under development in Gurugram and Chennai, with high occupancy rates across its portfolio.
The company also holds retail assets, with upcoming retail plazas expected to start generating rental income in the next fiscal year. Occupancy rates for retail spaces are also high.
As of December 2024, DCCDL reported a net debt of ₹16,713 crores, slightly lower than the previous figure of ₹17,583 crores reported in March.
The partners are still in discussions to determine the best way forward for monetizing the venture, with an IPO currently favored as the potential route for DCCDL’s future.
