“The timing of launch of REIT will be decided by the two shareholders — DLF and GIC. The management has taken a decision to be REIT-ready. We have hired banker, legal firm and tax consultant to prepare ourselves for the REIT,” DLF’s MD (Rental Business) Sriram Khattar told analysts in an investors call.
The timing of launch of REIT will depend on many factors including interest rate and cap rates, he said.
DLF’s whole time director Ashok Tyagi said the consultants have been appointed to restructure the business and be ready to launch the REIT whenever the two shareholders decide.
In an investors presentation, DLF listed out that there are favourable market indicators for REIT listing such as enough liquidity in capital markets, low interest rate regime, efficient listing framework by the regulator and successful listing of two REITs.
DCCDL has appointed Shardul Amarchand Mangaldas & Co as legal advisor, Morgan Stanley as banker and KPMG as financial/tax advisor.
“Deliberations being done on key points: corporate structure, capital structure and asset perimeters. Completion expected in around 12 months,” the presentation said.
The DCCDL has rent-yielding commercial assets of around 35 million sq ft, with about Rs 3,500 crore annual rental income.
DLF had formed a joint venture with GIC in December 2017 after its promoters sold their entire 40 per cent stake in the DCCDL for nearly Rs 12,000 crore. This deal included sale of 33.34 per cent stake in DCCDL to GIC for about Rs 9,000 crore and buyback of remaining shares worth about Rs 3,000 crore by the DCCDL.
In India, there are two listed REITs — Embassy Office Parks REIT and Mindspace Business Parks REIT.
The first REIT of Rs 4,750 crore issue size was listed in April 2019 by Embassy group and Blackstone backed Embassy Office Parks. In August last year, K Raheja and Blackstone backed Mindspace Business Parks launched the country’s second REIT to raise Rs 4,500 crore.
Global investment firm Brookfield is launching next week the country’s third REIT to raise Rs 3,800 crore.
Real estate investment trust (REIT), a popular instrument globally, was introduced in India a few years ago aimed at attracting investment in the real estate sector by monetising rent-yielding assets. It helps unlock the massive value of real estate assets and enable retail participation.