DLF: Standing Tall
Its exposure across business segments and geographies mitigates down-cycle risks in the market
Photo Credit : Bloomberg
Under the able leadership of its Chairman Kushal Pal Singh or KP Singh, as he is popularly known, DLF, India’s largest real estate company has a proven track record of more than 70 years of sustained growth, delivery and innovations. In fact, DLF has consistently made it to the list of Most Respected Companies published by BW Businessworld. This year too, the Most Respected Companies have been ranked after an exhaustive process and due diligence done by an eminent jury panel. This year, the companies have been ranked on the basis of eight parameters including effective growth plan, financial return, innovative product/services, trustworthy leadership, CSR, work culture, amongst others.
In its seven decades of existence DLF has delivered over 300 million square feet (msf). DLF worked out new business models with earnings arising from development as well as rentals. Its exposure across business segments and geographies mitigates down-cycle risks in the market.
DLF is now present across several cities in India and has a development potential of 227 msf. At present, the company has nearly 6 msf under construction and approximately 17 msf of planned projects, says a company spokesperson.
Last year, a subsidiary of DLF, DLF Cyber City Developers (DCCDL) entered into a strategic partnership with GIC, the sovereign wealth fund of Singapore. This partnership will further develop DLF’s rental assets portfolio. The partnership resulted in the largest FDI inflow into the realty sector of Rs 9,000 crore, valuing DCCDL at an enterprise value of Rs 35,617 crore.
Following the transaction, the promoters infused Rs 9,000 crore into DLF and committed another Rs 2,250 crore, which reaffirms their faith in the strength and future of the development business of the company. As a result of FDI inflow and infusion by the promoters, DLF has been able to reduce its debt to quite an extent, and after a number of quarters it is now operationally cash-flow positive.
The largest concern to most individual customers in the last decade has been regarding residential projects. This was a consequence of developers, as a herd, going into the residential segment following drastic reduction in commercial and retail projects in the wake of the global meltdown of 2008. However, DLF exercised due restraint and caution at this juncture and launched a restricted number of projects, employing the best-in-class construction companies and designers. As a result, the company witnessed a steady stream of project completions. In fact, it had completed all its major projects before the end of 2017.
Environment friendly policies and construction practices are also an integral part of the company. This is exemplified by DLF Golf and Country Club which does not use ground water for maintaining its greens. Instead, it uses treated water from sewage treatment plants for irrigation and for many water features. The golf course has become the home of several migratory bird species in addition to being a big green lung for Gurugram. In a PPP with HUDA, the company invested Rs 650 crore for constructing a 16-lane signal-free expressway (Raghvendra Marg) from Cybercity to Sector 55/56 in Gurgaon, which is toll-free. It also pioneered the Rapid Metro in Cybercity, the first fully privately financed metro system in the world.
The 32 msf of commercial and retail portfolio of the DLF subsidiary DCCDL has the distinction of being the “only real estate company across the globe” to get 11 “Swords of Honour for Health and Safety Standards”, conferred by an independent jury of the British Safety Council. A lean and professional corporate structure constantly keeps DLF as an evolving business entity, hoping to meet the lifestyle needs of a rapidly growing and modernising nation. Many congratulations to DLF.