India’s largest real estate company DLF Ltd plans to invest ₹20,000 crore to develop commercial properties, which include office, retail and hospitality in the medium term.

Around 60 per cent of the investment will be done by DLF Cyber City Developers Ltd, a joint venture between the Kushal Pal Singh promoted DLF and GIC of Singapore.

In a presentation made to the bourses, the company informed that significant capex is being committed for growth in the medium term for annuity business where developers build assets and lease out to earn rental income.

DLF’s investment in this space will be routed through the parent as well as JV firms such as DCCDL.

In its annuity business, the company has a sizable operational portfolio of around 43.3 million square feet of operational rental assets, which include 39 msf of office and 4.3 msf of retail footprint.

While the office space has occupancy levels of 93 per cent, the same in retail is 98 per cent. The portfolio is set to grow by 29 msf, split between 21 msf in office and 8 msf in retail to reach 73 msf in the medium term.

DCCDL holds the bulk of rental assets of the DLF Group which holds a 67 per cent stake in the JV firm.

The presentation mentioned that a high quality owned land bank, majority of which is in Gurgaon where the company has been a pioneer in residential as well as commercial development, is available for sustainable long-term growth with a visibility of20 years.

In the residential space, DLF said it has to put in around another ₹20,000 crore over the next few years to complete the construction of its already launched residential projects.

However, they are likely to generate around ₹43,000 crore of surplus cash from them.

Shapoorji borrowing

The plan of construction major the Shapoorji Pallonji group to raise debt has secured a strong response from financial institutions, Reuters reported.

The group, which is a significant shareholder in Tata Sons, the main holding company of the Tata Group, plans to raise $3.2-3.3 billion through a bond issue, with private credit funds expected to account for a bulk of the subscriptions.

Foreign private credit funds Ares Management and Farallon Capital Management are likely to be the largest investors for the issue, while Cerberus Capital Management, Davidson Kempner Capital Management, One Investment Management and Varde Partners are among other big investors.

The bond is expected to be secured by shares of Tata Sons that are held by the group through Sterling Investment Corp.

Deutsche Bank is the sole arranger for the deal. The proceeds will primarily be used to refinance existing debt.